2018: Antitrust Year in Review

New Antitrust Law

On May 24, 2018, the Argentine Congress enacted new Antitrust Law No. 27,442 bringing in a wide range of changes to the antitrust law in Argentina:

• New National Competition Authority: the law creates a new decentralized and autarkic authority that disregards the doubletier system comprising the Antitrust Commission and the Secretary of Trade. However, as the Authority is not fully operational, the Secretary of Trade of the Ministry of Production continues to be the enforcement authority.
   
• Merger control suspensive system: a suspensive system for merger filings has been introduced, but it will enter into force one year after the creation of the Authority (expected in January 2021). In the meantime, the current nonsuspensive system remains applicable.

• Increased fines and prosecution: fines for companies and persons that engage in anticompetitive conduct are significantly increased. Likewise, to enhance cartel prosecution, the law now presumes hardcore cartels are absolute restrictions to competition.

• Leniency Program: as a novelty, the law incorporates a leniency program to facilitate investigation of cartels.

Important Cases

• Telecom/Cablevisión: it entailed a significant merger between two major undertakings in the telecommunications companies. The transaction demanded 10 months to be analyzed and was finally cleared by the application of a fixit-first remedy.

• Molinos Río de la Plata / Mondelez: the country’s largest food company agreed to sell certain brands to a new competitor since the Authority considered it necessary to ensure competition in the dry pasta market.

• Steel investigation: the Authority initiated a major investigation into the steel market, due to the alleged commission of anticompetitive conducts and abuse of dominant position.

• SAB Miller/AB Inbev: 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. It was the first time that this type of “swap” solution was used in the interplay between a merger and a conduct investigation.

• Credit card investigation: the investigation on the electronic payment market has triggered the sale of the country’s sole operator of VISA, Prisma Medios de Pago S.A. As part of a settlement with its shareholders, the company will have to be fully divested in short. It was the first time that a full divestment solution was used for a behavioral case.
   

Guidelines

• Merger Control Review: in April, new guidelines were issued to provide practitioners with a much needed reference in their everyday interactions with the Authority.
• Guidelines for Business Associations: since business associations have often been the facilitating vehicle for the commission of anticompetitive conducts, the guidelines intend to provide said entities with a leading light under which to conduct their activities.

2019 Outlook

• Effective setting up of the National Competition Authority: for the proper functioning of the new Authority, its members must to be appointed; the appointment could take place in 2019.  

• Increase in anticompetitive conduct investigations triggered by leniency applications: the program is expected to facilitate the prosecution of conduct investigations; therefore, there is likely to be a significant increase in the number of investigations carried out by the Authority.

• Updating of notification thresholds and fines: the initial value of indexable units has been fixed at 1 indexable unit = ARS 20. This value is expected to be updated to prevent inflation and devaluation distortions.

• Issuance of Abuse of Dominant Position and Leniency Guidelines: the Authority 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 of Guidelines for the Leniency Program. These Guidelines may be issued in 2019.