New Antitrust Law in Argentina

Entry in force

The Executive Power now has ten business days to enact the law, which will be in force only eight days after its publication in the Official Gazette.

National Competition Authority

The new Antitrust Law creates the National Competition Authority, a new decentralized and autarkic body within the scope of the Executive Branch. Within this body, the Antitrust Tribunal, the Secretariat of Instruction of Anticompetitive Behaviors and the Secretariat of Economic Concentrations will operate.

The members will be appointed through a public selection process and will need to have the approval of the Senate. The Antitrust Tribunal will be comprised of five members, the requirements being that two of them will have to be lawyers and two economists.

Merger control

• Increased thresholds. Those economic concentrations whose total turnover of the acquiring group and target exceeds 100,000,000 Adjustable Units (equivalent to ARS 2,000,000,000¹) in Argentina will be notifiable. 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 initially been set out at 1 Adjustable Unit = ARS 20. These revised thresholds will become operational as soon as the Antitrust Law comes into effect.

• De minimis thresholds are also increased.  According to the provisions of the new Antitrust Law, an economic concentration would be exempted from notification if the total local assets of the target and the local amount of the transaction would each not exceed 20,000,000 Adjustable Units, which currently represents ARS 400,000,000² provided, however, that the exemption would not apply if any of the companies were involved in economic concentrations in the same relevant market for an aggregate of 20,000,000 Adjustable Units in the last 12 months or 60,000,000 Adjustable Units in the last 36 months, the latter representing ARS 1,200,000,000.³

• Suspension effect. One year after the effective creation of the National Competition Authority, companies will not be able close a transaction without obtaining the prior authorization from the National Competition Authority. In the meantime, the current non-suspensive system remains in place and parties will be able to notify up to one week after closing the transaction.

• Increased fines. If the parties do not comply with the mandatory notification, they will be subject to fines of up to 0.1% of the national consolidated volume of business per day of delay. If this method of calculation of the fine is not viable, then the fine is of up to 750,000 Adjustable Units, which represent ARS 15,000,000⁴ per day of delay.

• Filing fee. When filing a concentration, the notifying parties must pay a fee that can range from 5,000 Adjustable Units (equivalent to ARS 100,000⁵) to 20,000 Adjustable Units (equivalent to ARS 400,000⁶). This fee will be set by the Executive Power.

• Third-party intervention. Third parties will be able to make statements and submit objections to the economic concentration, although the National Competition Authority is not obliged to comment on such presentations.

• Timeline. The Antitrust Law now has the following revised timeline:
  • The term in which the National Competition Authority must resolve is 45 business days after the notification, provided that the submitted information is correct and complete.
  • If the transaction has the potential to restrict competition, the National Competition Authority must communicate in writing (Statement of Objections) its objections and summon a special hearing to consider the remedies. In these cases, the term to resolve is extended up to 120 additional business days.
  • A summary proceeding is foreseen for certain concentrations (fast-track), to be regulated in the future.
  • The tacit approval of the notified transaction is contemplated but its implementation must be regulated.
  • If the National Competition Authority considers that information has not been duly provided, the economic concentration could be considered as not notified.

Anticompetitive conducts

Under the previous antitrust regime there were no anticompetitive behaviors per se, since the current or potential damage to the general economic interest has to be determined to consider a conduct as anticompetitive. The new Antitrust Law maintains the same rule but presumes that there are certain behaviors which are absolute restrictions to competition.

Those agreements are now listed under Section 2 of the new Antitrust Law:

• to fix, directly or indirectly, the price of the purchase or sale of products and/or services;
• to establish obligations of a) manufacturing, distributing, buying or commercializing a limited amount of goods and/or (b) to provide a limited number, volume or frequency of services;
• to divide, distribute or horizontally impose areas, portions or segments of the markets, clients or supply sources; or
• to establish or coordinate submissions or abstentions in public tenders.

These agreements must be deemed null and will not generate any effects.

On the matter of fines, the new Antitrust Law establishes that the infringing parties can be fined by the higher of the following two methods:

• fines up to 30% of the volume of business of the last fiscal year, associated to the products and/or services involved in the perpetuation of the anticompetitive conduct, multiplied by the years of duration of the conduct, which, in turn, should not exceed 30% of the consolidated volume of business generated in Argentina in the last fiscal year of the group to which the perpetrator belongs; or
• up to double the economic benefit reported by the anticompetitive conduct.

If the calculation of the fine is not viable under any of the methods described above, the fine is up to 200,000,000 Adjustable Units, equivalent to ARS 4,000,000,000.⁷

Furthermore, the new Antitrust Law eliminates the current solve et repete system for the payment of fines. As such, these will now only have to be paid upon confirmation by the Courts.

Leniency Program

The new Antitrust Law incorporates a leniency program in order to facilitate the investigation of the cartels by establishing two possible run-to-the-door scenarios for those who adhere to the benefit: exemption or reduction of fines, as well as immunity from certain criminal sanctions and damages (with certain specific exceptions).

In order for the exemption to apply, the petitioner must:

• be the first among those involved in the conduct to apply and supply evidence;
• immediately cease the anticompetitive action;
• cooperate with the National Competition Authority;
• not destroy evidence of anticompetitive behavior; and
• not disclose the intention to adhere to the benefit.

If the petitioner is not the first to adhere to the benefit, they may be eligible for a reduction of between 50% and 20% of the fine if they provide additional evidence to the investigation.

The new Antitrust Law also includes a supplementary benefit (leniency plus) for the petitioner which, not being able to adhere to the benefit during the substantiation of the investigation, reveals and recognizes a second cartel in another market. In addition to the exemption granted for such conduct, the benefit will also consist of a reduction of one third of the sanction or fine that would otherwise have been imposed because of their participation in the first conduct.

1 Approximately USD 87,000,000 according to the current exchange rate.
2 Approximately USD 17,400,000 according to the current exchange rate.
3 Approximately USD 52,000,000 according to  the current exchange rate.
4 Approximately USD 650,000 according to the current exchange rate.
5 Approximately USD 4,300 according to the current exchange rate.
6 Approximately USD 18,000 according to the current exchange rate.
7 Approximately USD 174,000,000 according to the current exchange rate.