Judicial Review of Injunctions Ordered by the National Antitrust Commission

Introduction

On April 14, 2015, under the “Cencosud S.A. s/ apelación resolución Comisión Nacional de Defensa de la Competencia”[1] docket, the Supreme Court of Justice (the “Supreme  Court”) overturned Resolution No. 131/2009 (the "Resolution”) issued by the Antitrust Commission, arguing the Antitrust Commission’s incompetence in issuing injunctions, confirming the judgment issued by Room III of the Federal Court of Appeals in Civil and Commercial matters (the "Court"). The Supreme Court made an identical analysis in the “Cablevisión S.A. s/ apelación resolución Comisión Nacional de Defensa de la Competencia” [2] docket. Both precedents require a further interpretation by the Supreme Court as regards the scope of action of the Antitrust Commission.

Precedents

By means of this Resolution the Antitrust Commission had ordered an injunction basing its competence on Section 35 of the Antitrust Law. Among the measures being imposed was an order to notify different companies owning shopping centers (including Cencosud SA, "Cencosud"), to refrain from canceling a series of discounts that were advertised in the shops located in said shopping centers. Upon said injunction, Cencosud appealed in order to try to secure the revocation of the Resolution.

The Court upheld the appeal and ordered the revocation of the Resolution since it considered that the issuance of injunctions under Section 35 of the Antitrust Law did not apply to the transitory powers conferred by Section 58 of the Antitrust Law to the Antitrust Commission and the Secretary of Trade (the "ST"). Furthermore, the Court considered that said restriction did not harm the investigational powers of the Antitrust Commission, since pursuant to Section 24 Sub-section m of the Antitrust Law, said body could have requested an injunction to a Judge, which would have allowed carrying out an antitrust enforcement with due constitutional guarantees.

This precedent followed other cases[3]  which have stated that the Antitrust Commission did not have the authority to order the injunctions set out by Section 35 of the Antitrust Law.

The ruling by the Supreme Court

In the past, the Supreme Court has issued its opinion with regard to the limits between the powers of the Antitrust Commission and the ST in the “Credit Suisse First Boston Private Equity II LLC-Sucursal Argentina, Nueve Artes S.A. y HFD Media S.A”[4] (“Credit Suisse”) and “Recreativos Franco s/ apelación resolución Comisión Nac. Defensa de la Competencia” [5](“Recreativos Franco”) cases. Upon analyzing those cases, the Supreme Court understood that the Antitrust Commission and the ST were the authorities currently empowered to analyze and decide antitrust cases until the Antitrust Tribunal which had been set up by means of the original drafting of the Antitrust Law is incorporated. In this regard, it is important to leave on record that the current drafting of the Antitrust Law after the amendment by Law No. 26,993 has eliminated the notion of an Antitrust Tribunal, which has been replaced by an Enforcement Authority to be appointed by the Executive Power.  

In these cases, the Supreme Court had stated that until the constitution of the Antitrust Tribunal, the Antitrust Commission and the ST would be the enforcement authorities to analyze antitrust cases, arising from the Antitrust Law. Furthermore, it indicated that the Antitrust Commission would be the authority that must conduct and investigate the case, while the ST must issue the decisive resolutions.

Upon this present appeal, the Attorney General issued an opinion stating that that the Antitrust Commission had sufficient competence to issue the decision since the injunction had been related to the investigational powers of said body, while also considering that the issue of injunctions had not yet been covered by the Supreme Court’s past case law.

However, the majority vote of the Supreme Court confirmed the ruling of the Court relating to the revocation of the Resolution for incompetence of the issuing body, basing its decision on the interpretation of Sections 58 and 35 of the Antitrust Law. The Supreme Court reiterated its distinction between the activities carried out by the Antitrust Commission and those carried out by the ST, namely: (i) investigation and advisory activities and; (ii) resolutive activities. With respect to the former activities, it stated that they are transitorily held by the Antitrust Commission, while the latter were attributed to the ST until the Antitrust Tribunal would be incorporated. The Supreme Court considered that the ST would encompass the issuance of injunctions.

In addition to this, the minority vote of the ruling by Dr. Highton de Nolasco should be noted; Dr Highton considered that the interpretation by the Attorney General was appropriate as regards the competence of the Antitrust Commission to issue injunctions and also left on record that the amendments incorporated by Law No. 26,993 were not to be taken into account since its entry in force had taken place after the issuance of the Resolution.

The Supreme Court made an identical analysis in the “Cablevisión S.A. s/ apelación resolución Comisión Nacional de Defensa de la Competencia” docket, concluding that the Commission lacked competence to order injunctions, referring to the bases and conclusions articulated in the “Cencosud S.A. s/ apelación resolución Comisión Nacional de Defensa de la Competencia” docket.

Conclusion

These new precedents further show the limitation of powers regarding the Antitrust Commission’s authority to issue injunctions under the previous drafting of the Antitrust Law. It remains to be seen which interpretation the Courts will give to the Antitrust Commission’s role after the recent amendment to the Antitrust Law by means of Law No. 26,993 which provided further clarification of the roles to be carried out by said body as well as by the Enforcement Authority of the Antitrust Law, which is yet to be appointed.

[1] Supreme Court Sentence dated April 14, 2015 issued in proceedings “Cencosud S.A. s/ apelación resolución Comisión Nacional de Defensa de la Competencia”.

[2] Supreme Court Sentence dated April 14, 2015 issued in proceedings “Cablevisión S.A. s/ apelación resolución Comisión Nacional de Defensa de la Competencia”.

[3] Room A of the Court of Appeals on Economic Criminal Matters Sentences dated October 21, 2009 issued in proceedings “Telefónica de ESpaña, Olimpia y otros s/ diligencia preliminary s/ ley 25.156. Incidente de verificación de cumplimiento de resolución 44/09” and July 14, 2011 issued in proceedings “Papel Prensa s/ incidente de apelación”.

[4] Supreme Court Sentence dated June 5, 2007 issued in proceedings “Credit Suisse First Boston Private Equity II LLC-Sucursal Argentina, Nueve Artes S.A. y HFD Media S.A”.

[5] Supreme Court Sentence dated June 5, 2007 issued in proceedings “Recreativos Franco s/ apelación resolución Comisión Nac. Defensa de la Competencia”.