Supreme Courts validates antitrust enforcing agency

Background

When the Antitrust Law No 25,156 (the “Antitrust Law”) was passed in 1999, it created the National Tribunal for the Defense of Competition (“Antitrust Tribunal”) as an independent enforcing agency within the area of the Ministry of Economy. Although the Antitrust Law also provided for the terms under which the Antitrust Tribunal should be formed, it has not yet been set up. The Antitrust Law provided in Section 58 that during the interim period until the Antitrust Tribunal is created, its role had to be fulfilled by the pre-existing National Commission for the Defense of Competition (“CNDC”) who recommends and the Secretary of Domestic Trade of the Ministry of Economy who issues the final decision.

Many courts have challenged the powers of the Secretary of Domestic Trade to decide the cases and / or the inability of the Executive Power to set up the Antitrust Tribunal. On June 5, 2007, the Argentine Supreme Court in re:“Credit Suisse First Boston Private Equity II LLC-Sucursal Argentina, Nueve Artes S.A. y HFD Media S.A.” (“Credit Suisse”) (Docket No S.C., C 1216, L.XLI) and in re: “Recreativos Franco s/ apelación resolución Comisión Nac. Defensa de la Competencia” (“Recreativos Franco”) (Docket No R. 1170. XLII and R. 1172. XLII) decided that the current enforcing authorities have powers to analyze and decide antitrust cases until the Antitrust Tribunal is set up.

In “Credit Suisse”, Room I of the Federal Court of Appeals on Civil and Commercial Matters (the “Federal Court of Appeals”) understood that the decision regarding an economic concentration taken by the CNDC and the Secretary of Technical Coordination of the Ministry of Economy (currently the Secretary of Domestic Trade) was void as the Antitrust Law stated that during the interim period until the Antitrust Tribunal is formed, the CNDC has powers to analyze, review and decide the case without the intervention of the Secretary of Technical Coordination.

“Recreativos Franco” arrived to the Federal Court of Appeals as the parties appealed the decision of the CNDC and the Secretary of Domestic Trade that decided to subordinate the approval of an economic concentration to the effective modification of the length of a non-competent agreement. The Federal Court of Appeals decided on May 11, 2006 that the decision taken was void as, according to its interpretation of the Antitrust Law, only the CNDC must issue decisions without the intervention of the Secretary of Domestic Trade.

According to the Argentine Supreme Court –which accepted the arguments given by the Attorney General– Section 58 of the Antitrust Law established that the former enforcing agency that acted pursuant to the terms of the abrogated Antitrust Law No 22,262 must continue analyzing the cases until the Antitrust Tribunal is finally formed. It specifically stated that the CNDC must instruct, investigate and issue a recommendation and the Secretary of Domestic Trade must issue the final decision.

Comment

These decisions are very important as they finally terminate the discussion about the validity of the CNDC and the Secretary of Domestic Trade to review antitrust cases. It is expected that the Supreme Court will reach a similar decision in the case “Belmonte, Manuel y Asoc. Rural De Gral. Alvear – Mendoza. s / Acción de Amparo c/ Estado Nacional. – PEN y otros” that has suspended the analysis by the CNDC of the acquisition of supermarket chain Disco and Vea by the Chilean Cencosud.