Last year was a significant one for antitrust in Argentina. After many years of effort by practitioners and authorities, on 24 May 2018 the National Congress enacted the new Antitrust Law No. 27,442 (the Antitrust Law), bringing significant changes to antitrust enforcement in Argentina.
The Antitrust Law prohibits certain acts relating to the production and exchange of goods and services if they restrict, falsify or distort competition, or if they constitute an abuse of a dominant position, and provided that in either case they cause or may cause harm to the general economic interest. The majority of these conducts are not unlawful as such, nor must they cause actual damage; it is sufficient that the conduct is likely to, or may potentially, cause harm to the general economic interest. Additionally, in order to enhance cartel prosecution, the Antitrust Law now presumes that there are certain behaviours (hardcore cartels), which are absolute restrictions to competition, and thus, anticompetitive per se.
The provisions of the Antitrust Law apply to all individuals and entities that carry out business activities within Argentina, and those that carry out business activities abroad to the extent that their acts, activities or agreements may affect the Argentinian market (the effects theory).
There is also a merger control proceeding set out by the Antitrust Law by means of which companies that meet certain requirements (jurisdictional thresholds) must seek the approval of an economic concentration.
Regarding the authority in charge, the Antitrust Law creates a new antitrust authority, the National Competition Authority, which will be a decentralised and autarchic body within the Executive Branch. This new regulator will be organised in three divisions: the Antitrust Tribunal, The Anticompetitive Conduct Secretariat and the Merger Control Secretariat. However, the members of the new Antitrust Authority have not been appointed yet. In the meantime, the current two-tier regulatory system will remain in force, composed by the Antitrust Commission, responsible for preparing technical reviews on mergers and investigations, and for issuing recommendations to the Secretary of Trade, the ultimate ruling body. For the purposes of this chapter, all references to the Antitrust Commission will encompass the Secretary of Trade unless expressly stated.
i Prioritisation and resource allocation of enforcement authorities
The Antitrust Law provides the Antitrust Commission with several standard enforcement powers, such as:
- the ability to summon witnesses for hearings;
- examinations of books and documents;
- the issuance of requests of information to other regulators;
- the initiation of investigations ex professo; and
- the execution of dawn raids with a court order.
During 2018, the Antitrust Commission focused its analysis on abuse of dominance and conduct investigations.
As regards merger control proceedings, owing to the implementation of the new Antitrust Law the Antitrust Commission has accelerated its review time frame of merger control cases. The new Antitrust Law set up a summary proceeding that is foreseen for certain concentrations (fast-track), for which the review time frame for approval is approximately three months; this has been applied for conglomerate transactions with no overlapping products. Even though the regulator has not traced a clear path on this matter yet, deals that may raise a competitive concern will not likely benefit from this proceeding and will be reviewed in the regular time frame, which at present ranges between six and 12 months.
ii Enforcement agenda
The enforcement agenda of the Antitrust Commission can be mainly summarised as follows:
- The appointment of the members of the National Competition Authority, which is expected to occur during the first quarter of 2020. At the time of writing, a new decree has been issued regarding the selection procedure for the appointment of the members of the National Competition Authority, which is expected to take place during the year.
- A greater interest in the detecting and prosecuting of anticompetitive conducts. In that regard, as will be analysed below, the Antitrust Commission has continued several market investigations and initiated some others with the intent of determining whether there are any anticompetitive actions taking place in such markets. Furthermore, anticompetitive conduct investigations are expected to be triggered by the leniency programme introduced by the new Antitrust Law.
- The intervention on the Notebook case, a recent corruption scandal that was unveiled in 2018 entailing an organised corruption scheme, which included the delivery of bribes to several people and locations, including politicians and many business people who benefited from large public contracts between 2005 and 2015. This proceeding is being carried out through a criminal investigation, but the Antitrust Commission is likely to initiate an investigation on bid-rigging allegations that have arisen in the depositions.
- The elimination of the cumbersome merger control review methods that had taken place prior to 2016 by using a more practical approach regarding transactions under analysis, especially with regard to non-material cases. Pursuant to the statements of the Antitrust Commission, it has reduced the delay in the review from an average of 3.2 years to approximately six to 12 months.
- The Antitrust Commission has initiated a more open approach with other authorities and supra-national entities in order to carry out joint exercises and training programmes with authorities such as the Federal Trade Commission and the European Union.
- The Antitrust Commission has published a draft version of the Guidelines for Analysis of Cases of Abuse of Dominance for public consultation and is currently working on a draft version for Guidelines for the Leniency Programme. These are expected to be released during the course of 2019.
i Significant cases
Cartel cases in Argentina have generally involved the following:
- the arrangement of prices or production quotas;
- the distribution of market shares;
- agreements between different bidding parties in public bids; or
- the transfer of competitively sensitive information with the sole purpose of restricting competition.
According to the Antitrust Law, in the event that an infringement is proved, the cessation of the infringing conduct will be ordered and a fine could be imposed on the perpetrators that can be of: (1) up to 30 per cent of the volume of business related to the products or services involved in the unlawful conduct committed, during the last fiscal year, multiplied by the number of years that the conduct has lasted, which may not exceed the national consolidated volume of business registered by the economic group of the parties during the last fiscal year; or (2) up to twice the economic benefit produced by the unlawful conduct committed. In the event both of them are applicable, the highest amount will be imposed. On the contrary, if none of them is applicable, the fine could be of up to 200,000,000 Adjustable Units, as will be analysed below.
Between 2000 and 2005, the Antitrust Commission showed an interest in prosecuting cartels and heavy sanctions were imposed (most notably in the Cement2 and Liquid Oxygen3 cases), but from thereon until recently, no major collusion cases have been fined in Argentina.
Credit Cards case4
In September 2016, the Antitrust Commission served notice to Prisma Medios de Pago SA (Prisma), the holder of the Argentine licence of VISA, and its 14 shareholder banks, of an investigation in which it set out three main types of anticompetitive conduct.
The first alleged conduct entailed the setting by Prisma of high interchange and discount rates, and Prisma deliberately keeping them at the upper levels of the allowed percentages, namely 3 per cent for credit cards and 1.5 per cent for debit cards. The second alleged conduct entailed a centralisation of promotional activities regarding the VISA brand, by means of which banks would not compete against each other, but rather had financing decisions centralised on a Prisma level. The third allegation consisted in downstream discriminations and refusal to supply by Prisma to its competitors in the offline interface market, gateway and payment facilitator channels, through its position in the acquisition market, which its downstream competitors must go through. In September 2017, the Antitrust Commission accepted the divestment commitment submitted by Prisma.
During 2018, the Antitrust Commission continued to monitor Prisma's compliance with said commitment. In order to comply with the commitment, Prisma tried to sell its shares but faced several setbacks. Finally, in January 2019, the proposed divestment reached an end and Advent acquired 51 per cent of Prisma's shares.
ii Trends, developments and strategies
Per se anticompetitive practices
Under the new Antitrust Law certain collusive conducts are considered as anticompetitive per se, and harmful to the general economic interest without further analysis, specifically, Section 2 of the Antitrust Law provides that the following are absolute restrictive behaviours:
- price fixing;
- the setting of production or commercialisation quotas, or the restriction of said activities with the same intention;
- market, client or supply allocation; and
- bid rigging.
The Antitrust Law sets out that these types of conducts will be deemed as anticompetitive, and thus will be considered as null.
This inclusion seeks to address two main issues: the lack of an efficient prosecution of cartels (which is further enhanced by the creation of the leniency programme, as analysed below) and the elimination of having to resort to conscious parallelism theories that have been rejected by the courts.
Furthermore, the Antitrust Commission has issued new guidelines for the prevention of anticompetitive conducts by business associations, chambers and professional associations. This reflects the growing interest of the Antitrust Commission in the activities carried out by these groups which have often been the facilitating vehicle for the commission of anticompetitive conducts. On 2017, the Antitrust Commission had issued guidelines in this regard within a resolution regarding market investigation on milk. However, in 2018, the Antitrust Commission released specific guidelines which deal with: (1) measures and recommendations on price fixing and market allocation; (2) exchange of information between competitors; (3) measures on the entry and exit of members; (4) measures on standardisation; (5) measures on publicity; and (6) recommended practices.
One of the most important developments introduced by the new Antitrust Law is the incorporation of a leniency programme in order to facilitate the prosecution of cartels. The Antitrust Law now incorporates a leniency programme, setting out two different scenarios for infringing parties, namely an exemption scenario and a reduction scenario, both based on a 'race-to-the-door' structure.
Pursuant to the Antitrust Law, infringing parties must comply with the following requirements to obtain an exemption from the sanctions set out therein:
- they must be the first party, among the participants of the conduct, that provides the Antitrust Commission with information and evidence, either in the event that the Antitrust Commission has not initiated an investigation, or if it has initiated an investigation but has not been able to gather sufficient evidence;
- they must immediately cease the performance of the infringing conduct, unless the Antitrust Commission requests otherwise in order for it to be able to continue an investigation;
- they must collaborate until the end of the investigation; and
- they must not destroy, forge or hide evidence of the anticompetitive conduct, nor make public the fact that they have filed for the leniency programme, unless such communication is to another antitrust regulator.
Parties that are not the first to apply for the leniency programme may request a reduction of the sanctions, if they are able to meet the remaining requirements and provide the Antitrust Commission with useful information for the investigation. The reduction may range from 20 to 50 per cent of the sanction. The reduction ratios are to be determined by the Antitrust Commission by taking into account the chronological order of the filing.
The Antitrust Law also includes a 'leniency plus' provision, by means of which those parties that would not be able to request an exemption regarding anticompetitive conduct, but that could provide information on a second instance of anticompetitive conduct, can obtain an exemption on the latter, and a one-third reduction in the former. Additionally, the Antitrust Law specifically sets out that there cannot be a joint enforcement by two parties of the leniency programme, the sole exception being if a company and its directors or other members of its staff request the enforcement of the leniency programme.
Finally, the Antitrust Law sets outs that in the event of follow-on litigation regarding conduct uncovered by parties that have applied for the leniency programme, there will be no access to the documents or information provided by the applicants, safekeeping their confidentiality.
The renewed interest in pursuing collusive conducts, in addition to the greater tools granted to the regulator in the Antitrust Law, show that it is quite likely that cartel enforcement will be a top priority for the Antitrust Commission in the years to come. It remains to be seen how the leniency system will be effectively implemented and what its results will be, but the legislative push towards its approval shows that cartel prosecution is once again a priority in Argentina. Especially taking into consideration the above-mentioned Notebook case in which the criminal investigation is still ongoing, but the Antitrust Commission is likely to start an investigation on bid-rigging allegations ex officio, either if such investigation is ordered by the criminal court handling the case or if it triggered by a leniency application.
III ANTITRUST: RESTRICTIVE AGREEMENTS AND DOMINANCE
Section 5 of the Antitrust Law sets out that a person has a dominant position when it is the only buyer or supplier of a given product within the market or when, without being the only supplier or buyer, it lacks substantial competition or it is able to determine the economic feasibility of competitors because of a certain vertical or horizontal degree of integration.
Section 6 establishes three relevant factors to determine the existence of a dominant position: the degree of substitution for a product or service; the existence of regulatory barriers; and the extent to which a company can unilaterally set prices or restrict output.
Despite not being expressly indicated in the Antitrust Law, the Antitrust Commission also considers market share to be an important factor in determining whether there is a dominant position.
Section 1 of the Antitrust Law prohibits the abuse of a dominant position. Section 3, on the other hand, describes some vertical and exclusionary practices that could violate Section 1 as they are likely to cause harm to the general economic interest.
Since the beginning of the 1980s, antitrust authorities have been investigating different types of abuse of dominant position. Additionally, in the view of antitrust authorities, a dominant position may be abused by committing different anticompetitive conduct such as predatory pricing, fixing retail prices, tied-in sales, blocking access to essential facilities and discriminating prices; however, no significant sanctions were imposed until 1995, when a local petroleum company received a significant sanction for abuse of its dominant position by having discriminating prices in the liquid gas market. This would also be the case for which, years later, a sentence would be issued within the framework of private litigation.
i Significant cases
Argentine Society of Music Authors and Composers case5
The Argentine Hotel and Gastronomy Business Federation filed a complaint against the Argentine Society of Music Authors and Composers (SADAIC) for allegedly charging an abusive fixed price that consisted in a percentage of the companies' turnover under the notion of unifying the collection of certain compensations. It further stated that SADAIC was eliminating all possibilities of negotiation, option or choice and that under said argument it charged fixed prices that would not exist in regular market conditions.
The Antitrust Commission considered that SADAIC had a monopoly regarding the granting of authorisations for the playing of music in hotels and that it had abused its position of dominance, imposing excessively high, unreasonable and discriminatory taxes. Therefore, it decided to impose a fine on SADAIC and to issue a recommendation to the public entities in charge of the supervision of SADAIC's activities in order to adjust its conduct with regard to hotels and similar establishments (such as restaurants).
ii Trends, developments and strategies
The new Antitrust Law has not brought forward any major amendments to the former Antitrust Law regarding abuse of dominant position. Furthermore, it must be noted that no abuse of dominant conduct is listed under the 'per se' prohibited practices of the Antitrust Law.
The Civil and Commercial Code includes a provision regarding the prohibition of abuse of dominant position, but does not provide a definition of what should be understood by 'abuse of dominant position'. Thus, a judge would have to resort to Section 5 of the Antitrust Law in order to accurately define whether the conduct under consideration is, in fact, an abuse of dominant position.
The inclusion of the concept of abuse of dominant position could also help the prosecution of those types of cases by courts without the intervention of the Antitrust Commission. Under this new scenario, courts would be able to prosecute these cases without the intervention of said regulator. At the time of writing, we are not aware of any case on these terms.
Furthermore, the Antitrust Commission has published a draft version of Guidelines for the Analysis of Cases of Abuse of Dominance that are expected to be issued during this year. As a novelty, these guidelines include a detailed description of the anticompetitive conduct of abusive pricing.
During 2018, the Antitrust Commission has shown an increasing interest with regard to cases involving dominance. In this regard, and as mentioned above, it is relevant to highlight that the Antitrust Commission has published for public consultation a draft version of the Guidelines for the Analysis of Cases of Abuse of Dominance that are expected to be issued in 2019.
IV SECTORAL COMPETITION: MARKET INVESTIGATIONS AND REGULATED INDUSTRIES
Before the enactment of the Antitrust Law in 1999, interaction between the Antitrust Commission and the sectoral regulators was rare. That changed with the enactment of the Antitrust Law, since the Law expressly made all sectors subject to its rules. Specifically, Section 82 rules that the only relevant legislation regarding mergers is the Antitrust Law and its Regulatory Decree.
Additionally, Section 17 of the Antitrust Law is a specific rule that applies to mergers in regulated sectors. Said rule states that the Antitrust Commission must require an opinion from the relevant regulator on a transaction concerning its impact on competition or its compliance with the applicable regulatory framework.
i Significant cases
In the past, market investigations have not led to major cartel or dominance cases, since in most cases no final decisions or opinions were issued. As a reference, over the course of 2014, four major investigations were initiated against over 250 companies on a wide range of markets, yet only one cartel investigation arose (in the pharmaceutical industry), of which results are yet to be seen.
When the new Administration entered office, it announced several investigations would be initiated in the following markets:
- petrochemical products;
- mobile communications;
- credit cards and electronic payment;
- edible oil;
- local bus transportation;
- air transportation;
- supermarkets; and
- construction products.
ii Trends, developments and strategies
As a result of these investigations, the Credit Cards case was initiated. There have been other market investigations that have finished without further follow up activity. In that regard, the milk investigation issued a series of guidelines regarding interactions with competitors, the edible oil investigation showed that there was competition in such market, and the results of the aluminium and petrochemical investigations are expected to be released shortly. In 2018, a major investigation regarding the country's largest non-ferrous steel company was initiated for allegedly committing anticompetitive conducts and for abuse of dominant position.
The fact that one of the market investigations initiated in 2016 has led to a cartel investigation shows a departure from past practice in which no effective results were obtained through this avenue of investigation. It remains to be seen whether further conduct investigations will be generated by means of this method.
V MERGER CONTROL
According to the Antitrust Law, certain transactions are deemed to be economic concentrations when they result in the assumption of control of one or more companies by means of any of the following acts:
- transfer of businesses;
- acquisition of shares or equity interests, any interest thereto, convertible debt securities or securities that grant the acquirer control of, or a substantial influence over, the issuer; and
- any other agreement or act through which assets of a company are transferred to a person or economic group, or which gives decision-making control over the ordinary or extraordinary management decisions of a company.
These economic concentrations require approval if the aggregate volume of business of the companies involved in the transaction exceeds 100 million Adjustable Units in Argentina. Please note that all the amounts set out by the new Antitrust Law will now be fixed in Adjustable Units, which will be adjusted on an annual basis. The initial value has been set at 1 Adjustable Unit = 20 Argentine pesos. At the time of writing, the relevant authority has not yet updated this unit. The volume of business is defined as the combined gross sales of products or services of the target and the buyer during the preceding fiscal year arising from their ordinary businesses, net of discount sales, value added tax and other taxes directly related to the volume of business.
Economic concentrations that fall within this definition must be mandatorily notified to the Antitrust Commission for clearance. The new Antitrust Law sets out a suspensive system according to which companies will not be able to close a transaction without the prior authorisation of the Antitrust Commission. However, this system will enter into force one year after the creation of the new Antitrust Authority. Therefore, it is expected that the suspensive system will enter into force during the first quarter of 2020 on a best-case scenario. In the interim period, the post-closing notification is applicable, according to which the mandatory notice must be delivered prior to or within seven calendar days after the closing of the transaction or the publication of any cash tender or exchange offer.
Upon submission of the notice, the Antitrust Commission and the Secretary of Trade have 45 business days (such term is suspended in cases where additional information is requested) in which to decide whether to unconditionally approve the transaction; approve the transaction, but impose conditions; or reject the transaction. Should the Antitrust Commission consider the transaction may restrict or distort competition, prior to the issuance of its final decision, it must communicate in writing its objection to the parties (statement of objections) and summon a special hearing to consider the remedies. In these cases, the term to resolve is extended by up to 120 additional business days.
If a decision is not issued within 45 business days of the filing of an application and relevant documents, the transaction shall be considered tacitly approved. However, it should be noted that the current average review time frame is of nine to 12 months, even in non-material transactions, due to a stop-the-clock interpretation by the Antitrust Commission, which considers that the first request for information stops the 45-business-day term until it has obtained all necessary answers for the issuance of its decision. Under the new Antitrust Law, there is a summary proceeding foreseen for certain concentrations (fast-track), for which the review time frame for approval is approximately three months.
The transaction has no effects with regard to the parties involved or any third parties until it has been approved, whether expressly or tacitly.
The following transactions are exempt from the notification requirement:
- the acquisition of companies in which the purchaser already holds more than 50 per cent of the shares (understood as already holding exclusive control);
- the acquisition of bonds, debentures, non-voting shares or debt securities;
- the acquisition of only one company by only one foreign company that has no assets or shares of other companies in Argentina;
- the acquisition of wound-up and liquidated companies (which performed no activities in Argentina during the preceding calendar year); and
- the acquisition of companies if the total local assets of the acquired company and the local amount of the transaction each do not exceed 20 million Adjustable Units, provided, however, that the exemption would not apply if any of the involved companies were involved in economic concentrations in the same relevant market for an aggregate of 20 million Adjustable Units in the past 12 months or 60 million Adjustable Units in the past 36 months.
If the parties do not comply with this requirement, they will be subject to fines of up to 0.1 per cent of the national consolidated volume of business for each day they fail to comply. If this method of calculation of the fine is not feasible, then the fine shall be up to 750,000 Adjustable Units, which represents 15 million Argentine pesos per day of delay.
Section 9 of the Antitrust Law states that any transaction subject to control by the Antitrust Commission does not bring about any effects in relation to the involved parties or any third party until it is approved by the Antitrust Commission, either expressly or tacitly.
i Significant cases
During 2018, the Antitrust Commission has continued to improve its merger analysis.
The transaction entailed the acquisition of exclusive control over Monsanto on behalf of Bayer. These companies operate globally and their activities include solutions for agricultural production, agrochemical products and biotechnological developments.
The companies were close competitors regarding non-selective herbicides, vegetable seeds and extensive crop seeds. They also vertically overlapped since the investigation stage and the development of active ingredients and biotechnological events up to the stage of commercialisation of the products. Given the potential anticompetitive effects of the transaction, Bayer had to globally divest certain assets and businesses in favour of BASF in order to obtain clearance on behalf of the European Commission, the American DoJ and other competition authorities. Owing to the application of this 'fix-it-first' remedy, the Antitrust Commission considered that the transaction would not raise any concerns to the general economic interest in Argentina and therefore decided to unconditionally clear the transaction.
The transaction entailed a significant merger between two major undertakings in the telecommunications sector. The parties' activities overlapped in the supply of residential access to internet, mobile telecommunication services, access to the wholesale internet network and local links or relays (capacity) in Argentina. Furthermore, some vertical relations had been identified in the upstream markets.
The Antitrust Commission's competition concerns were finally settled through the application of a fix-it-first remedy and the transaction was cleared. This case reflects the Antitrust Commission's recent inclination towards the application of the up-front buyer and fix-it-first remedies, following international standards, mainly from the European Commission.
SAB Miller/AB InBev8
The transaction entailed the global acquisition of SAB Miller by its main competitor, AB InBev. The parties are the two main breweries at a global level. Therefore, in order to remedy the potential anticompetitive effects of the proposed acquisition, AB InBev was ordered to divest seven of its brands in Argentina to the Chilean brewery CCU. In exchange, the latter had to assign rights of the Budweiser brand in Argentina to AB InBev.
The transaction was conditioned on the fulfilment of the divestment and brand swap. This was a very relevant case as it was the first time that this type of 'swap' solution had been used in the interplay between a merger and a conduct investigation.
ii Trends, developments and strategies
One of the most important modifications introduced by the new Antitrust Law is the creation of a new merger control system, which greatly increases the amounts for both the notification threshold and the de minimis exemption; seeks to reduce review time frames; and sets out a suspensive system, as opposed to the current interim post-closing notification system.
As mentioned above, the new Antitrust Law modifies the notification threshold, using Adjustable Units that will be updated annually. Pursuant to the Antitrust Law, the new threshold is met if the acquiring group and target surpass a combined turnover of 100 million Adjustable Units, thus increasing the threshold to an amount closer to the one that had originally been envisaged. It is worth noting that the threshold is the same across industries, and that the entire volume of business of the involved companies must be taken into account, irrespective of whether they have been generated by the market in which the transaction will take place or not.
The same update takes place as regards the de minimis exemption, which is now applicable if both the local amount of the transaction and the local amount of the assets being transferred each do not surpass 20 million Adjustable Units; and if the previous condition is met, the acquiring group or target must not have carried out transactions in the same relevant market for 20 million Adjustable Units in the past 12 months or 60 million Adjustable Units in the past 36 months.
The Antitrust Law also sets up a suspensive regime in which the parties will not be able to close the transaction prior to its approval. This is the most relevant departure from the former Antitrust Law as regards the notification system, in which parties could close the transaction and file for notification up to one week afterwards. The Antitrust Law now sets out fines for gun-jumping, which had hitherto never existed in Argentine merger control proceedings. However, it must be noted that the suspensive regime will become effective one year after the enactment of the law, so as to provide sufficient time for the Antitrust Authority to clear its abundant workload on merger control cases. This is expected to occur during the first quarter of 2020.
Further to this suspensive system, the Antitrust Law defines a review time frame of 45 working days plus an additional 120-working-day term. The former Antitrust Law also had a 45-working-day review time frame, which over the passing of time was ignored, reaching average review time frames of over 30 months even in non-material transactions. However, it must be taken into account that said delays took place in a non-suspensive system that eliminated the pressure for the Antitrust Commission to issue the clearances in time. Under this system, it remains to be seen whether the Commission will be able to meet the time frames set out by the new Antitrust Law.
In that regard, the Antitrust Law sets out a fast-track system for those transactions that do not present competition concerns. However, this system has not been regulated yet.
Finally, the new system also includes a mechanism for third parties to file their comments on the merger, which are non-binding for the Antitrust Commission; nor is there an obligation for it to comment on them.
Merger Control Guidelines
In addition to the news introduced by the Antitrust Law, the Antitrust Commission has issued an updated version of its Merger Control Guidelines (which had not been updated since 2001). The new Guidelines provide a much-needed reference for practitioners in their day-to-day interactions with the Antitrust Commission, of which the following matters can be highlighted.
The Guidelines clearly set out that transactions with a combined market share of 20 per cent or less will be considered to be non-problematic, which triggers the application of the fast-track procedure. Unlike past practice, this indicates that these transactions will be cleared in rapidly and will not be subject to intensive review by the Commission.
This approach is further complemented with clear rules on the usage of the Herfindahl–Hirschman Index (HHI), which used to referred to, but with no specific rules. Pursuant to the Guidelines, those transactions that have a post-transaction HHI below 2,000 will be considered as non-relevant. Transactions that surpass such amount, but where the delta between the prior and post-transaction scenarios is below 150 points, will also be considered non-problematic. Furthermore, if the post-transaction market shares are lower than 30 per cent and if the post-transaction HHI is less than 3,000 or has a delta of less than 250 points, then the transaction will also be deemed as non-relevant.
Furthermore, the Guidelines now provide for a more fulsome approach as regards the techniques to be used by the Antitrust Commission. In that regard, they now incorporate the notion of upward pricing pressure as a method to determine possible unilateral actions post-transaction as well as including a specific review on coordinated effects. Other factors that are now included as relevant comprise competition from imported products, countervailing buyer power, the creation of a portfolio effect and the failing firm approach to a transaction.
The Guidelines also provide a commentary on the possible review of ancillary restraints, following the current practice by the new Administration of not setting out specific terms for their duration, but rather to analyse them on a case-by-case basis.
In short, the Guidelines provide clearer rules for parties interested in carrying out a merger control notification in Argentina, which allows them to fully assess the type of review that they will be subject to as well as have a better estimate regarding the proposed timeline.
Owing to the issuance of the new Antitrust Law, the complete overhaul of the merger control system helped the regulator steer away from the slow and cumbersome review process it has had for more than a decade, significantly improving the results during the course of 2018.
i Pending cases and legislation
The new Antitrust Law addresses several of the most relevant shortcomings in antitrust enforcement in Argentina. However, some important modifications are yet to be implemented. During 2019, we expect to see effective progress towards the setting up of the National Competition Authority, in addition to the issuance of the final document of the Abuse of Dominant Position and Leniency Guidelines and the expected update of the Adjustable Unit.
It yet remains to be seen how corruption cases will be handled together with the predominant role of the application of the leniency programme, which should definitely mark an increase in anticompetitive investigations.
1 Miguel del Pino and Santiago del Rio are partners at Marval, O'Farrell & Mairal. The authors would like to thank Valentina Pozzoli for her assistance on this chapter.
2 Opinion No. 513 of the Antitrust Commission dated 25 July 2005.
3 Opinion No. 510 of the Antitrust Commission dated 8 July 2005.
4 Resolution No. 463 of the Secretary of Trade, dated 26 September 2017. Resolution No. 20 of the Secretary of Trade, dated 31 October 2018.
5 Resolution No. 371 of the Secretary of Trade, dated 26 June 2018.
6 Resolution No. IF-2019-06408017-APN-CNDC#MPYT of the Secretary of Trade, dated 1 February 2019.
7 Resolution No. 374 of the Secretary of Trade, dated 28 June 2018.
8 Resolution No. 136 of the Secretary of Trade, dated 14 March 2018.