4 December 2014
In the Official Gazette of the Bolivarian Republic of Venezuela Extraordinary N° 6,151 dated November 18th, 2014, it was published the Presidential Decree with Force of Law N° 1,415, whereby the Decree is issued with Rank and Force of Antitrust Law, reprinted due to failure in the original Official Gazette N° 40,549 of November 26th, 2014.
With the publication of this Decree with Rank and Force of Antitrust Law (the «Law»), the Law to Protect and Promote the Exercise of Free Market is repealed, published in Official Gazette of the Republic of Venezuela N ° 34.880, dated January 13th, 1992.
The purpose of the Law is to promote, protect and regulate the exercise of economic competition, prohibiting and sanctioning monopolistic and oligopolistic practices and conducts, abuse of dominant market position, concerted claims, economic concentrations or any other conduct that violates free economic competition.
Here are the most important aspects of the Law:
- Subjects of Application:
- All individuals and Entities, public or private, national or foreign companies or nonprofit companies that perform economic activities throughout the Venezuelan territory.
- The Law defines Economic Activity as «Any demonstration of production, distribution or commercialization of goods and services …» that meets human needs.
- The following subjects are exempted from the application of this Law:
a) Organizations Popular Power based, governed by the Organic Law of the Communal Economic System
b) Public Companies or Strategic Joint Ventures
c) State Enterprises that provide public services
- Prohibited Activities:
- The Law establishes two types of prohibitions, a general one and a specific set of prohibitions. Any conduct, practice, agreement, arrangement, contract or decision that prevents, restricts, distorts or limits economic competition is generally prohibited.
- Antitrust is understood as any activity that allows subject of application of the Law, in their capacity as economic subjects to «access, act and participate in the market, as providers or applicants» and that once having acceded to the market » have no possibility to enforce any type of condition in terms of trade relationships that detract possibilities of action» of other participants.
(i) The specific prohibitions are established by the Law as follows:
a) All conducts of those who «not being holders of a right protected by law, attempts to impede or obstruct the entry or permanence of companies, products or services in whole or in part of the market» are prohibited.
b) All actions restricting economic competition are prohibited, «that encourage the rejection to deliver goods, impeding their acquisition or provision of such services, or that does not permit the sell of raw materials or supplies, or providing services to others.»
c) All behaviors that seek to «manipulate the factors of production, distribution, commercialization, technological development or investments» undermining economic competition, are prohibited.
d) All agreements or arrangements that «restrict or impedes economic competition» among members of unions, associations, federations, cooperatives or any other group or guild of people, are prohibited.
e) All agreements, arrangements or concerted practices that seek pricing conditions marketing conditions of goods and services are prohibited; limiting production, distribution, commercialization and technical or technological development; restricting investments in innovation, research and development; market sharing cartel, implementation of trade relations or services to equivalent transactions that put competitors in disadvantage situations, subordination or conditioning of contracts subject to acceptance of supplementary obligations which have no connection with such contracts.
f) An economic concentration that enforces a dominant position in all or part of the market, are prohibited. This prohibition is exempted for small and medium enterprises, cooperatives and for those who are governed by the Communal Economy System.
g) Agreements that fix prices and contracting conditions that restrict, distort, limits or impedes economic competition are prohibited.
h) Abuse of dominant position throughout practices of discriminatory imposition of prices or conditions; unjustified limitation of production, distribution or technical or technological development; the unjustified refusal to satisfy market demands; applying dissimilar conditions to equivalent transactions and; the subordination of the execution of contracts subject to acceptance of supplementary services, are prohibited.
i) Disloyal Competition corresponds to the «unfair, deceptive and fraudulent demeanors in the production, distribution and commercialization of goods and services that impairs subjects who develop the same economic activity or individuals with access to goods and services, are prohibited. To comply with the requirements of Disloyal Competition “is sufficient to note that the generation of such damage must be potential, to enforce the anticipated legal penalties established within the law.»
- Antitrust Superintendence
- The Law creates the “Antitrust Superintendence” that will be based in Caracas and may establish branches in other cities of the Country. It will be the responsible for the implementation of the Law; to investigate the subjects of application of this Law; to substantiate the administrative procedures that will be carried out, giving the necessary preventive measures as well as to determine the respective procedures imposing appropriate sanctions.
- The former Superintendent of Promotion and Protection of Free Competition will become the Antitrust Superintendence.
- Sanctions
- All individuals who engage in prohibited conducts established on the Law, shall be punished between 10% and 20% of the annual gross income, depending on the aggravating or mitigating effects as deemed appropriate; and if recidivates such behavior, the penalty will increase to 40% of the annual gross income.
- The administrative acts issued by the Antitrust Superintendence that are not fulfilled, will generate a fine between 1% and 20% of the assets of the offender.
- Any other infraction made against the Law, shall be punished with a fine of between 1% and 20% of the assets of the offender.
- Effectiveness: Publication in the Official Gazette.
This report presents a general description of the relevant and general aspects of the Antitrust Law and does not constitute a legal opinion directed to address a specific situation. In case of doubts or comments or for further information please contact María Cecilia Rachadell ([email protected]) or Fernando Sanquírico (fernando.sanquirico@dlawordpress-1435814-5364031.cloudwaysapps.com).
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