Increase of Fines as Deterrent to the Execution of Further Anticompetitive Conducts

1. Introduction

On October 4, 2011, the Secretary of Domestic Trade (“SDI”) issued a resolution imposing a fine of AR$ 575,000 (approximately US$ 135,000 according to the current exchange rate) on the Medical Association of Bahía Blanca (“MABB”) along with a cease and desist order. Even though MABB was not the only entity involved in the investigation (the Medical Association of Punta Alta – MAPA – was also fined but with a lesser amount), the SDI imposed a much greater fine on MABB and based its decision on the conclusions of one of the Commissioners of the Argentine Antitrust Commission (“AAC”) who, dissenting from his peers, considered that MABB had to be fined with a higher fine.

2. The case

MABB had been fined earlier in 2010 by the AAC after a claim filed by the Argentine Federation of Anesthesia, Analgesia and Resuscitation Associations (“AFAAR”). In that claim, the AFAAR argued that MABB had pursued the exclusion of anesthesiologists not affiliated to MABB, pressuring clinics and sanatoriums in the City of Bahía Blanca to use the services rendered only by professionals affiliated to MABB, under threats of not paying for the medical services provided by such clinics and sanatoriums.

On that occasion, the MABB had been sanctioned with a fine of AR$ 500,000 (US$ approximately 117,000 according to the current exchange rate), plus the cease of the conduct under investigation.

In the new proceedings, the investigation commenced with the claim filed by several members of the medical community of the Cities of Bahía Blanca and Punta Alta (Province of Buenos Aires) with the AAC, and formal aspects of this claim were fulfilled on October 9, 2001.

The plaintiffs, once members of MABB, alleged that they had been suspended as doctors affiliated to MABB (which prevented them from treating patients with medical coverage provided by companies that had medical service agreements entered with MABB) since they had treated patients covered by the Navy’s medical insurance (Dirección de Bienestar de la Armada or “DBA”), in direct disobedience of a directive issued by MABB.

Due to previous disagreements between DBA and MABB, the latter had instructed its affiliated doctors to treat DBA patients as if they had no medical coverage, and said patients were treated outside the Navy Hospital located in Puerto Belgrano naval base (the “Navy Hospital”).

As a result of the aforementioned directive, DBA entered into agreements with several doctors (among whom were the plaintiffs) with the purpose of procuring suitable medical treatment for their affiliates outside the Navy Hospital. By doing this, DBA was to all effects by-passing MABB.

MABB first tried to exhort the doctors entering into agreements with DBA to review their conduct. This exhortation was manifested in an article published by MAPA in the magazine “Conciencia”, urging said doctors to revert their conduct. Later, MABB gave the plaintiffs 72 hours upon notification to ratify or rectify their contractual relationship with DBA, which was followed by a response issued by the plaintiffs to MABB, stating that it should cease its intimidating attitude towards its affiliated professionals rendering its services to DBA patients outside the Navy Hospital.

The SDI imposed a fine of AR$ 575,000 (approximately US$ 135,000 according to the current exchange rate), disregarding the majority vote of the Commissioners of the AAC, which recommended a fine of AR$ 350,000 (approximately US$ 82,000 according to the current exchange rate). The SDI based its decision on the conclusions of one of the Commissioners of the AAC who, dissenting from his peers, considered that MABB had to be fined with a much greater fine than the one established in the precedent (AR$ 500,000 – approximately US$ 117,000 according to the current exchange rate), due to the fact that MABB had carried out several anticompetitive conducts during the same period.

3. Conclusion

The final purpose of the Antitrust Law and the AAC is to discourage the execution of anticompetitive conducts. In the case in question, the SDI took into account the fact that an increase in the fine would serve as a deterrent to the execution of further anticompetitive conducts, thus showing its interest in further pursuing the prosecution of these types of activities.