New Bill to Amend Argentina’s Antitrust Law: What Could Change?

The bill, under Record No. S-2795-20, was first submitted to the Argentine Congress by Senator Ana C. Almirón on November 17, 2020. If approved, the bill will include the following main amendments to the current Antitrust Law No. 27,442 (the “Antitrust Law”) sanctioned on May 9, 2018: 

 

Changes in how members of the National Competition Authority are appointed

One of the key amendments in the bill is that it eliminates the current procedure for the appointment of members of the National Competition Authority (the “Authority”).

Under the current Antitrust Law, members of the Authority (i.e. a decentralized and autarchic body within the scope of the Executive Branch) must be appointed through a public selection process and then have to be approved by the Argentine Senate. However, the law has been in force for two years and no Authority members have been appointed yet.

The bill stipulates that the Executive Branch, with prior recommendation from the Ministry of Productive Development, will appoint members of the Authority. The bill also states that the Authority will be under the purview of the Secretary of Domestic Trade —and not under the Executive Branch as provided by the current law.

 

Merger oversight regime: application of the “suspensive regime” and definition of “economic concentrations”

The bill’s most significant change to the merger oversight system is that it sets out to reduce when the current “suspensive regime” enters into force in Argentina. If the regime becomes effective, the parties to any transaction that meets the requirements set out in the Antitrust Law will need to obtain prior authorization from the Authority to close the transaction.

The current Antitrust Law stipulates that the “suspensive regime” will only apply after one year as from the creation of the Authority. However, given that members of the authority have not been appointed yet, the post-closing system still remains in place in Argentina.

The new bill establishes that the pre-closing system for the notification of economic concentrations will enter into force 90 days after its publication in the Official Gazette without any further requirements or conditions.

As a result, Argentina will become a jurisdiction in which a transaction subject to merger oversight will require authorization from the Authority before closing, similar to the systems currently in place in several jurisdictions across the world.

Furthermore, the proposed legislation also amends the definition of “economic concentrations” provided by the Antitrust Law. Under the new definition, full-function joint ventures will be considered economic concentrations. Although they were not expressly included in the current Antitrust Law, they were subject to merger oversight rules in practice. Therefore, if the bill is approved, this addition will not entail a significant change on the type of transactions that are reportable.

 

Anti-competitive practices regime: elimination of controversial section and clarification concerning the leniency program

The bill sets out to eliminate the controversial and superfluous Section 29 of the current Antitrust Law, which stipulates that the Antitrust Tribunal can authorize the execution of agreements that may be deemed to restrict competition, provided those agreements are not detrimental to the general economic interest.

Specifically with respect to the leniency program, the bill clarifies that exemptions will be granted to the sanctions provided by the Criminal Code and to the penalty of imprisonment that could apply to anti-competitive practices as long as no criminal investigation has been initiated before the date in which the leniency is requested.

Finally, the bill includes other amendments that pertain mostly to the internal organization of the Authority such as its budget and the duration of its members’ positions, among others.

Congress is expected to review the bill during its extraordinary sessions between January 4, 2021 and February 28, 2021. If the bill is passed, new members of the antitrust authority may be immediately appointed by the Executive Branch and the suspensive regime for merger oversight filings will enter into force in the first semester of 2021. These amendments could have a significant impact on Argentina’s antitrust regime.