Argentina: Cartels

The In-House Lawyer Logo

This country-specific Q&A provides an overview to cartels laws and regulations that may occur in Argentina.

This Q&A is part of the global guide to Cartels. For a full list of jurisdictional Q&As visit http://www.inhouselawyer.co.uk/practice-areas/cartels/

  1. What is the relevant legislative framework?

    The legislation on cartel prosecution is set out in Antitrust Law No. 27,442 (hereinafter the “Antitrust Law”) enacted on May 24, 2018. Anticompetitive conducts are also regulated by Decree No. 480/2018 and Resolution No. 359/2018 of the Secretary of Domestic Trade.

  2. To establish an infringement, does there need to have been an effect on the market?

    The Antitrust Law prohibits certain acts relating to the production and exchange of goods and services if they restrict, falsify or distort competition, or if they constitute an abuse of a dominant position, and provided that in either case they cause or may cause harm to the general economic interest. The majority of these conducts are not unlawful as such, nor must they cause actual damage; it is sufficient that the conduct is likely to, or may potentially, cause harm to the general economic interest. Additionally, in order to enhance cartel prosecution, the Antitrust Law now presumes that there are certain behaviours (hard-core cartels), which are absolute restrictions to competition, and thus, anticompetitive per se.

  3. Does the law apply to conduct that occurs outside the jurisdiction?

    The provisions of the Antitrust Law apply to all individuals and entities that carry out business activities within Argentina, and those that carry out business activities abroad to the extent that their acts, activities or agreements may affect the Argentinian market (the effects theory).

    Applied to anticompetitive practices, those acts carried out abroad, but with substantial, normal and regular effects in Argentina, could be investigated and punished by the Antitrust Law.

  4. Which authorities can investigate cartels?

    The Antitrust Law creates a new antitrust authority, the National Competition Authority which will be a decentralized and autarchic body within the Executive Branch. This new regulator will be organized in three divisions: the Antitrust Tribunal, the Anticompetitive Conduct Secretariat and the Merger Control Secretariat. However, the selection process for the members of the Antitrust Authority has officially started on late March 2019, and is still in process as members have not been appointed yet. In the meantime, the current double-tier regulatory system will remain in force, composed by the Antitrust Commission (Comisión Nacional de Defensa de la Competencia), responsible of preparing technical reviews on mergers and investigations, and to issue recommendations to the Secretary of Domestic Trade, the ultimate ruling body. For the purposes of this guide, all references to the Antitrust Commission will encompass the Secretary of Domestic Trade unless expressly stated.

  5. What are the key steps in a cartel investigation?

    The procedure may be initiated either ex officio or by a claim filed by any physical or legal, private or public, person. Once the claim has been filed before the Antitrust Commission, the claimant will be summoned in order to ratify or rectify it. The claim shall include: (a) name and domicile of the claimant; (b) specific description of the claim’s purpose; (c) the facts that support the claim; (d) a summary of the applicable law; and (e) evidence for the analysis of the claim. Claims may be dismissed in limine if the Antitrust Commission concludes that the alleged infringement does not fall within the legal description of restrictive practices. Otherwise, the accusation must be notified to the alleged infringer, who must submit explanations and comments within 15 business days.

    If the explanations are regarded as conclusive or if there is no sufficient evidence for the claim, the docket may be archived. Otherwise, the Antitrust Commission must continue the investigation, decide about the notification to the alleged infringers, who must form a defense and offer the evidence to be produced within 20 business days.

    The Antitrust Commission will fix a term to produce evidence and, afterwards, appraise the evidence. Decisions about the evidence produced are final and may not be appealed. The evidence period is of 90 business days and may be extended for the same period. The Antitrust Commission has to issue its final decision in within 60 business days.

    Up to the issuance of the decision, the alleged infringer may propose an “agreement” entailing the immediate or gradual cessation of the actions which originated the accusation. If the proposal is accepted by the Antitrust Commission, the investigation is archived.

    The Antitrust Commission may give intervention to third parties, such as the affected parties, consumer associations and commercial chambers, public authorities and any other person that may hold a legitimate interest in the investigated facts.

    Furthermore, the Antitrust Commission may request for non-binding resolutions on the investigated facts to physical or legal persons, either public or private.

    Finally, whoever files a false / scam claim may be subject to the sanctions provided under the Antitrust Law.

  6. What are the key investigative powers that are available to the relevant authorities?

    The Antitrust Law provides the Antitrust Commission with several standard investigative powers, such as:

    (i) the ability to summon witnesses for hearings;

    (ii) examinations of books and documents;

    (iii) the issuance of requests of information to other regulators;

    (iv) the initiation of investigations ex professo; and

    (v) the execution of dawn raids with a court order.

  7. On what grounds can legal privilege be invoked to withhold the production of certain documents in the context of a request by the relevant authorities?

    Decree No. 480/2018 provides in Section 13 that a party may request the confidentiality of the information submitted in a proceeding when its disclosure may cause damage to that party’s interest. Although this provision is primarily applicable to the merger review process, the enforcement authority may apply it within claims or investigations carried out by the Antitrust Commission in order to safeguard commercial secrets of the involved parties.

    When a private claim is filed before the courts and the opinion of the Antitrust Commission is used, it should not contain sensitive information, and parties can request confidentiality if any trade secret or other confidential information is disclosed in the opinion. In this sense, the request should be reasoned and a non-confidential version of the submitted information should be involved. Likewise, all the dockets pending before the Antitrust Commission are secret, and only the parties can access them.

    Finally, and pursuant to Section 6 of Law No. 23,187, it is a specific obligation of lawyers to preserve the attorney–client privilege unless otherwise authorised by the interested party (i.e., the client). Likewise, Section 7 provides that it is a right of the lawyers to keep confidential information protected under attorney–client privilege. Furthermore, Section 444 of the Civil and Commercial Procedural Code provides that a witness may refuse to answer a question if such answer would entail revealing information protected under a professional secret (i.e., including attorney–client privilege).

  8. What are the conditions for a granting of full immunity? What evidence does the applicant need to provide? Is a formal admission required?

    The Antitrust Law sets out two different scenarios for infringing parties, namely an exemption scenario and a reduction scenario, both based on a ‘race-to-the-door’ structure.

    Pursuant to the Antitrust Law, infringing parties must comply with the following requirements to obtain an exemption from the sanctions set out therein:

    (i) they must be the first party, among the participants of the conduct, that provides the authority with information and evidence, either in the event that the authority has not initiated an investigation, or if it has initiated an investigation but has not been able to gather sufficient evidence;

    (ii) they must immediately cease the performance of the infringing conduct, unless the Antitrust Commission requests otherwise in order for it to be able to continue an investigation;

    (iii) they must collaborate until the end of the investigation; and

    (iv) they must not destroy, forge or hide evidence of the anticompetitive conduct, nor make public the fact that it has filed for the leniency programme, unless such communication is to another antitrust regulator.

  9. What level of leniency, if any, is available to subsequent applicants and what are the eligibility conditions?

    Parties that are not the first to apply for the leniency programme may request a reduction of the sanctions, if they are able to meet the remaining requirements and provide the antitrust authority with useful information for the investigation. The reduction may range from 20% to 50% of the sanction. The reduction ratios are to be determined by the Antitrust Commission by taking into account the chronological order of the filing.

    The Antitrust Law also includes a ‘leniency plus’ provision, by means of which those parties that would not be able to request an exemption regarding anticompetitive conduct, but that could provide information on a second instance of anticompetitive conduct, can obtain an exemption on the latter, and a one-third reduction in the former. Additionally, the Antitrust Law specifically sets out that there cannot be a joint enforcement by two parties of the leniency programme, the sole exception being if a company and its directors or other members of its staff request the enforcement of the leniency programme.

  10. Are markers available and, if so, in what circumstances?

    Pursuant to what is set out by the Antitrust Law, markers are available and the Antitrust Commission will determine the reduction amount taking into consideration the chronological order in which the request was filed.

  11. What is required of immunity/leniency applicants in terms of ongoing cooperation with the relevant authorities?

    Please refer to question 3.1 above.

  12. Does the grant of immunity/leniency extend to immunity from criminal prosecution (if any) for current/former employees and directors?

    Provided that the Antitrust Commission granted the immunity/leniency in accordance to the requirements set out in the Antitrust Law, current/former employees and directors will be exempted from sanctions provided under the criminal law.

  13. Is there an ‘amnesty plus’ programme?

    Please refer to question 3.2 above.

  14. Does the investigating authority have the ability to enter into a settlement agreement or plea bargain and, if so, what is the process for doing so?

    Before the Antitrust Commission issues its final decision, the alleged perpetrator may commit itself to the immediate or gradual cessation of the actions for which it is being investigated or to the amendment of the aspects that are related to it. The commitment has to be approved by the Antitrust Commission for the procedure to be suspended. The Antitrust Law also provides that the docket will be archived if after the term of three years of the fulfilment of the commitment, there is no relapse.

  15. What are the key pros and cons for a party that is considering entering into settlement?

    It represents an advantage to the perpetrator the fact that it is granted with the opportunity to cease or change its actions with no major implications and with the possibility of having its docket archived.

  16. What is the nature and extent of any cooperation with other investigating authorities, including from other jurisdictions?

    The Antitrust Commission has a close relationship in terms of cooperation with the authorities in other jurisdictions. In fact, it has recently signed with Brazil, Chile, Mexico and Peru a joint statement regarding the advantages of the leniency programme, which follows the good practices submitted by the United Nations Conference on Trade and Development and the Organization for the Cooperation and Economic Development.

  17. What are the potential civil and criminal sanctions if cartel activity is established?

    According to the Antitrust Law, in the event that an infringement is proved, the cessation of the infringing conduct will be ordered and a fine could be imposed on the perpetrators that can be of: (i) up to 30% of the volume of business related to the products or services involved in the unlawful conduct committed, during the last fiscal year, multiplied by the number of years that the conduct has lasted, which may not exceed the national consolidated volume of business registered by the economic group of the parties during the last fiscal year or (ii) up to twice the economic benefit produced by the unlawful conduct committed. In case both of them are applicable, the highest will be imposed. On the contrary, if none of them is applicable, the fine could be of up to 200,000,000 Adjustable Units. Please note that all the amounts set out by the Antitrust Law are fixed in Adjustable Units, which will be adjusted on an annual basis. The initial value has been set out at 1 Adjustable Unit = AR$ 20. As of the date of writing, the relevant authority has not yet updated this unit.

    In addition, Section 300 of the Argentine Criminal Code sets out that any person that may generate the rise or decrease of the price of any merchandise, public offer funds or securities, by means of false news, fake negotiations or by agreement of the main holders of a good, in order to sell or to refrain from selling at a specific price, will be sanctioned with imprisonment, which may range from six months to two years. Please note that we are not aware of any conviction regarding this crime.

  18. What factors are taken into account when the fine is set? In practice, what is the maximum level of fines that has been imposed in the case of recent domestic and international cartels?

    Please refer to question 6.1 above.

    Between 2000 and 2005, the Antitrust Commission showed an interest in prosecuting cartels and heavy sanctions were imposed (most notably in the Cement and Liquid Oxygen cases). However, highest fine ever imposed by the Antitrust Commission was applied on the Tierra del Fuego Car Manufacturer’s case. We provide below a brief summary of it.

    On 12 December 2014, the Antitrust Commission condemned eight (out of 12 that are active in Argentina) car terminals to pay the highest fine ever since pursuant to the Antitrust Commission they had colluded in a price agreement. The claim was started in 2008 against the car dealers present in the Customs Special Area for a presumed infringement of the Antitrust Law, derived from an alleged breach to Law No. 19,640 (the Tax Law). The complainants alleged that the car dealers did not transfer the tax exemptions set by the Tax Law to the final consumer. However, after several years, in 2012, the Antitrust Commission decided to accuse almost all car terminals operating in Argentina stating that, as they were the ones that should have transferred the tax exemptions, they were violating the Antitrust Law since they were obtaining undue profits.

    Pursuant to the analysis of the Antitrust Commission, the car terminals were charging in the customs special area the same price as in the rest of the Argentine territory where the tax exemptions did not apply. Therefore, the prices for cars in the customs special area were higher than they should be. According to the accusation of the Antitrust Commission, this conduct performed by the car terminals corresponded to a conscious parallel behaviour. Unlike other previous cartel cases, the Antitrust Commission did not have evidence to prove the alleged agreement. As a consequence, the Antitrust Commission decided to accuse the terminals solely on the basis of conscious parallelism but with no evidence of an agreement. The sanction applied by the Antitrust Commission to this case is the highest fine ever applied (1.06 billion Argentine pesos total).

  19. Are parent companies presumed to be jointly and severally liable with an infringing subsidiary?

    Parent companies are not presumed to be jointly and severally liable with an infringing subsidiary. However, joint and several liability may be extended to parent companies when the action or omission of their duties of control, supervision or surveillance have contributed, encouraged or allowed the commission of the infraction.

  20. Are private actions and/or class actions available for infringement of the cartel rules?

    Pursuant to Section 62 of the Antitrust Law, any individual or legal entity suffering damage from any conduct or act prohibited under the Antitrust Law has the right to file a private action for damages in accordance with the civil law provisions.

    As regards class actions, please note that pursuant to Section 43 of the Argentine National Constitution, the affected person, ombudsman and associations authorised by law are entitled to file a class action.

    Considering the lack of a law regulating this kind of action, the Argentine Supreme Court, on a leading case in this matter (Case ‘Halabi, Ernesto c/ PEN - Ley 25.873 - Dto 1563/04 s/ Amparo Ley 16.986’) held that there are three categories of rights: individual rights, rights with a collective impact that concern collective assets, and rights with a collective impact that concern individual but homogeneous assets.

    This third category – rights with a collective impact that concern individual but homogeneous assets – is constituted by personal or property damage resulting from conduct that damages the environment or competition, or the rights of users and consumers and those of discriminated persons, consisting of a single or continuous act that causes harm to all the members of the group.

    The Argentine Supreme Court further identified the requirements that must be met to bring a collective action: the existence of a common factual cause that causes injury to a significant number of individual rights; the claim must be focused on the collective effects of such cause and not on what each individual might seek; and a demonstration that individual actions are not justified, which could affect access to justice.

    However, even in the presence of typically individual rights, class actions will also be available when there is a strong state interest in their protection, whether this is because of their social relevance or because of the special features of the affected parties.

    One of the most renowned cases regarding cartels in Argentina has been the Cement case, (Resolution SCI No. 124 dated 25 July 2005 ‘Loma Negra Cia SA; Cemento San Martín SA, Juan Minetti SA, Corcemar SA, Cementos Avellaneda SA, Cementos del Gigante SA y Petroquímica Comodoro Rivadavia SA re Infraction to Law No. 25,156 (C 506)’, CNDC Opinion No. 513 dated 25 July 2005) in which six major cement producing companies were accused of agreeing to allocate markets nationwide for almost 20 years. The Antitrust Commission’s investigation began in 1999, when a disgruntled employee supposedly revealed to a newspaper that the cement companies were exchanging information and agreeing to divide the market. While the source of the article was never revealed, it was used as a starting point for the Antitrust Commission’s investigation. According to the findings of the Antitrust Commission, the alleged exchange of confidential detailed market information was performed via the Association of Portland Cement Manufacturers (APCM). After a raid on the APCM premises, the Antitrust Commission found records of real-time software that was used to exchange current commercial records of the cement companies.

    This finding, as well as evidence of meetings in hotels between representatives of four of the companies, led the Antitrust Commission to discover the existence of a cartel that exchanged confidential and sensitive information about the cement market and that fixed prices in some areas. The fine imposed on 25 July 2005 by the Antitrust Commission totalled 309,729,289 Argentine pesos and was confirmed by the Argentine Supreme Court in August 2013.

    Based on this anticompetitive conduct, the Consumer Protection Association of Mercosur, a consumer association, filed a class action against the cement companies for the damage caused by the cartel. The consumer association claimed to represent a global class that primarily involved all the consumers, another class that involved all indirect consumers and finally a sub-class of indirect consumers that involved all persons that had acquired new or recently built buildings, or that had requested a third party (e.g., architects, engineers or building contractors) to construct a building or structure using cement (Argentine Supreme Court, ‘Asociación Protección Consumidores del Mercado Común del Sur e/ Loma Negra Cía Industrial Argentina SA y otros’ dated 10 February 2015).

    The Argentine Supreme Court considered that the initiators of a collective process must provide an objective, certain and easily verifiable definition of the class they want to represent. The members of the class should be effectively identified so as to facilitate the Court checking the existence of the relevant class as well as determining who its members are. Furthermore, the plaintiff must present the reasons for which the denial of the class action would affect the rights of the represented class.

    In the consumer association action, the Argentine Supreme Court considered these requirements not fulfilled by the consumer association and the suit was dismissed.

  21. What type of damages can be recovered by claimants and how are they quantified?

    Damages can be requested pursuant to the provisions set forth in Article 1716 of the Argentine Civil and Commercial Code, which states that a violation of the duty of not causing damage to another person gives rise to the compensation for such damage. Those actions are ruled by the Civil and Commercial Code and must be filed before the competent courts within the jurisdiction of the defendant’s domicile. The basic rule derived from the provision is that whoever causes damage intentionally or due to negligence is liable to the damaged party.

  22. On what grounds can a decision of the relevant authority be appealed?

    Pursuant to Section 66 of the Antitrust Law, decisions issued by the Secretary of Domestic Trade (or Antitrust Tribunal when created) may be appealed when they order: (i) the application of sanctions; (ii) the cessation or abstention of a conduct; (iii) the conditioning or rejection of the approval of a transaction; (iv) the rejection of the claim; (v) the rejection of the application of the leniency programme; and (vi) the cessation or abstention of a conduct in order to prevent damage, or to reduce its magnitude, its continuance or aggravation.

  23. What is the process for filing an appeal?

    The appeal should be filed and grounded before the Antitrust Commission within the 15 business days after the resolution has been served to the parties. The Antitrust Commission must deliver the claim and its response to the competent judge within 10 days as of the moment it was first filed.

    Pursuant to the Antitrust Law, the newly created Special Antitrust Chamber corresponding to the Argentine Civil and Commercial Court of Appeals will understand and decide on the issue. However, as of the date of writing the Special Antitrust Chamber has not yet been created, therefore, the Argentine Civil and Commercial Court of Appeals is the competent judicial body.

  24. What are some recent notable cartel cases (limited to one or two key examples, with a very short summary of the facts, decision and sanctions/level of fine)?

    The new Antitrust Law has granted greater tools to the regulator, therefore it is quite likely that cartel enforcement will be a top priority for the Antitrust Commission in the years to come. It remains to be seen how the leniency system will be effectively implemented and what its results will be, but the legislative push towards its approval shows that cartel prosecution is once again a priority in Argentina. Especially, with regards to the “notebook case”, a recent corruption scandal that was unveiled in 2018 entailing an organized corruption scheme, which included the delivery of bribes to several people and locations, including politicians and many businessmen who were benefited with large public contracts during the term of 2005 – 2015. This proceeding is being carried out through a criminal investigation, but the Antitrust Commission is likely to initiate an investigation on bid rigging allegations ex officio, either if such investigation is ordered by the criminal court handling the case or triggered by a leniency application.

    Also, the Antitrust Commission has recently published a draft version of the Guidelines for Analysis of Cases of Abuse of Dominance for public consultation and is currently working on a draft version for Guidelines for the Leniency Programme. These are expected to be released during the course of 2019.

  25. What are the key recent trends (e.g. in terms of fines, sectors under investigation, applications for leniency, approach to settlement, number of appeals, etc.)?

    The new Antitrust Law has granted greater tools to the regulator, therefore it is quite likely that cartel enforcement will be a top priority for the Antitrust Commission in the years to come. It remains to be seen how the leniency system will be effectively implemented and what its results will be, but the legislative push towards its approval shows that cartel prosecution is once again a priority in Argentina. Especially, with regards to the “notebook case”, a recent corruption scandal that was unveiled in 2018 entailing an organized corruption scheme, which included the delivery of bribes to several people and locations, including politicians and many businessmen who were benefited with large public contracts during the term of 2005 – 2015. This proceeding is being carried out through a criminal investigation, but the Antitrust Commission is likely to initiate an investigation on bid rigging allegations ex officio, either if such investigation is ordered by the criminal court handling the case or triggered by a leniency application.

    Also, the Antitrust Commission has recently published a draft version of the Guidelines for Analysis of Cases of Abuse of Dominance for public consultation and is currently working on a draft version for Guidelines for the Leniency Programme. These are expected to be released during the course of 2019.

  26. What are the key expected developments over the next 12 months (e.g. imminent statutory changes, procedural changes, upcoming decisions, etc.)?

    The new Antitrust Law has granted greater tools to the regulator, therefore it is quite likely that cartel enforcement will be a top priority for the Antitrust Commission in the years to come. It remains to be seen how the leniency system will be effectively implemented and what its results will be, but the legislative push towards its approval shows that cartel prosecution is once again a priority in Argentina. Especially, with regards to the “notebook case”, a recent corruption scandal that was unveiled in 2018 entailing an organized corruption scheme, which included the delivery of bribes to several people and locations, including politicians and many businessmen who were benefited with large public contracts during the term of 2005 – 2015. This proceeding is being carried out through a criminal investigation, but the Antitrust Commission is likely to initiate an investigation on bid rigging allegations ex officio, either if such investigation is ordered by the criminal court handling the case or triggered by a leniency application.

    Also, the Antitrust Commission has recently published a draft version of the Guidelines for Analysis of Cases of Abuse of Dominance for public consultation and is currently working on a draft version for Guidelines for the Leniency Programme. These are expected to be released during the course of 2019.