The Congressional Economics Committee spent several weeks analyzing around 100 suggested amendments to Initiative 5074, the Competition Law, and is now seeking the necessary consensus to present and resume the discussion in a third reading in the Plenary Session.
During the forum “Competition Law in Action” organized by the Ministry of Economy (Mineco), in which regional authorities participated, the process followed by the members of the aforementioned commission was made known, as well as the vision of specialists.
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The issue is once again relevant, since Eric Jacobstein, Deputy Assistant Secretary of State for Central America in the Office of Western Hemisphere Affairs, was in Guatemala a week ago and met with legislative authorities to learn about the progress of laws related to the economic agenda, and competition is one of them.
Regional experiences
Jorge Miguel Castillo Castro, Director of Competition Promotion at Mineco, stressed during the forum that the objective was to bring together those involved in this issue to discuss the importance of Guatemala having a specific law on the subject.
One of the conclusions of the event, which coincides with the invited delegates, was that local and foreign investors in Central American countries where a Competition Law is in force are sure that there is legal certainty that no one will carry out anti-competitive practices that threaten the investments of others. And that does not yet exist in Guatemala. In other words, “investors in those countries understand how a Competition Law works and operates, so they feel more comfortable with that regulation than without it.”
“More than 120 investigations have been carried out on companies related to cement, finance, telecommunications, beer and carbonated beverages”
Arturo Ochoa, from the Commission for the Defense and Promotion of Competition in Honduras
Arturo Ochoa, from the Commission for the Defense and Promotion of Competition in Honduras, explained that there is a benefit not only for consumers and businesses, but that it also contributes to the country’s economic growth, since “the elimination of some restrictions on competition can represent up to 0.5% of the gross domestic product (GDP), according to official studies.”
He also stated that one of the benefits is that it generates innovation, productivity, efficiency in companies and employment. Regarding the investigations, he commented that, in the Honduran case, these can be at the request of the parties, due to complaints that some economic agent is affected or ex officio, so more than 120 investigations have been carried out on companies related to cement, finance, telecommunications, beer and carbonated beverages.
Isaura Guillén Mora, commissioner of the Commission to Promote Competition in Costa Rica, explained the mechanisms for authorizations for economic concentration, which are mostly approved and do not become stuck, “as long as they meet the requirements demanded by the regulations.”
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Meanwhile, Gerardo Henríquez, head of the Competition Superintendence of El Salvador, said that the law is always intended to benefit the consumer, and thus avoid damage to the economy that could generate poverty.
The situation in Guatemala
Jorge Ayala, president of the aforementioned working room, explained that the amendments presented by all the legislative blocs were received, analyzed and processed. Now, the authors of these modifications are looking for enough signatures to incorporate them into the final ruling.
“Our general line is that the amendments guarantee due process, presumption of innocence, transparency and that the figure of the Superintendency of Competition be maintained as the institution that provides the burden of proof after an investigation process, in which it is demonstrated that an anti-competitive practice has been committed,” noted the deputy.
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He reiterated that the aim is also to ensure that the regulatory institution does not become a political instrument to attack a detractor, economic agent or a particular interest group, but rather that it is a technical institution with the resources, capacity and market knowledge, in addition to ensuring that the accused agents can exercise their legitimate right to defence.
He concluded that the atmosphere in the legislature is one of political will “because the same blocks have shown interest in the initiative and have presented the aforementioned amendments.”
ICE: “It is urgent to move forward”
During the forum, José Andrés Ardón, executive director of the Institute for Economic Competitiveness (ICE), stressed the importance of the deputies seeking the 107 votes needed to approve the law, although he clarified that the changes are still unknown, in the sense of which ones will be incorporated into the ruling.
In his view, August is the ideal time to approve the initiative, since the election of judges for the Supreme Court of Justice and the Courts of Appeals, the discussion and approval of the 2025 state budget project, as well as the election of the new board of directors of Congress are approaching.
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“We believe that the initiative already has enough changes and those that are going to be made should be minimal, without changing the substance or going backwards in the technical advances achieved,” he warned, commenting that at least four or five central issues are still under discussion.
Marcos Palma, president of the Institute of Competition Law, expressed a similar opinion, adding that the amendments that seek exceptions for some sectors or remove international standards from the initiative should be eliminated. On the contrary, “the competition authority must have the necessary tools to be able to investigate and sanction an anti-competitive practice.”
In his opinion, technical and functional independence must prevail to avoid any co-optation of political or economic powers.
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