After the Economic Commission of the Congress of the Republic received more than 90 proposals for amendments to initiative 5074, Competition Law, the authorities carried out a preliminary examination and detected some inconsistencies that, if approved, might put the nature of the competition at risk. the law.
Antonio Romero, vice minister of Economy, explained to Prensa Libre that a preliminary review of the proposed modifications was carried out in conjunction with the Competition Directorate of that portfolio and a first official position is that they will recommend that amendments not be made that go along the same lines of excluding economic sectors, since due to international practices, activities that have specific sectoral regulation must be included, since the issue of free competition has its own complexities and specialization.
The official stressed that the amendments that are discussed and approved do not have to weaken the institutions, since the rules between competition entities and sector regulators can coexist very well. That is, the specialization of the markets must be left to the Superintendency or Competition Agency, respecting the institutional limits between them.
A second suggestion is to avoid conflicts of interest with regard to the appointment of the Board of Directors and the Superintendent, and not to involve the organized private sector in decisions of this type because “it is not possible to allow a clear conflict of interest in the face of an authority that “It fairly regulates the participation of private companies in the market.”
One of the criteria in this phase of discussion is the power of the competition authority to institutionalize, in terms of the type of practices that will be sanctioned, since there are more that affect competition and in accordance with recommendations from various organizations, especially Price collusion between competing companies should be prohibited.
According to the vice minister, these types of practices might try to be defended by the sectors involved under the argument of efficiency, which contradicts all international practice, because there is no possibility that the agreed prices can be defended under the argument of efficiency. between competitors.
He clarified that the other type of practices (relative ones) between non-competitors, which initiative 5074 establishes, such as relationships between suppliers and distributors, are different, and there is a space in international practice that opens up that possibility.
Zero exclusions
Regarding the exclusion of sectors, Romero stated that it is not new, and there are some positions that seek to leave out some sectors, arguing that sectoral regulation already exists. For Mineco, it is not a valid argument because one thing does not exclude the other.
In his opinion, the authority, promotion and protection of competition, has its specialty and international practice indicates that this power includes even regulated sectors, with the coordination of the case and, of course, respecting its scope of authority.
“What better than a specialized authority to be in charge of observing what the competition is doing in the market. All powers that may be of a technical nature or authorizations of another type remain with the sectoral entities that will continue their important role and some of them have some type of competence. But in reality it is not operational, that function remains inactive and is not applied,” he noted.
In his opinion, leaving any sector excluded is leaving them without regulation, apart from the fact that “indications of practices such as price agreements have been seen.”
He cited as an example that the hydrocarbons and telecommunications sectors have their own sectoral regulation and if they were excluded, “it would greatly weaken the law and the institutions, because they are also sectors with a very important weight in the economy and with a very strong impact.” in the consumers who need that look of competition so that the markets do not have barriers and those who are now participating do so without preventing new competitors from participating in the market, which is ultimately what is sought.
The official added that “there are very concentrated markets, we hear of anti-competitive barriers and of remaining that way.” the state in which “We are going to remain as we are and the opportunity to create an institution that covers all sectors of the economy will be lost.”
He concluded that by having competitive markets where there is free entry and exit participation of companies, where they compete based on efficiency, quality, attention, instead of putting up barriers to competitors, we will have a healthier economy, a potential for better prices and quality of products and more employment. “You cannot create a weak entity that does not give the results you are looking for,” concluded Romero.
The other face
The vice minister stated that the original initiative views favorably the proposal to create a Competition Superintendency, which is the best structure, given the institutional environment, as well as the level of independence needed for the promotion and protection of the free market.
Regarding all of the above, a position was requested from the Coordinating Committee of Agricultural, Commercial, Industrial and Financial Associations (Cacif), but at the close of this edition, no response had been obtained.
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