The COMPAL Programme invited 5 of the 7 jurisdictions (Brazil, Chile, Mexico, Panama and Peru) that sanctioned the Liquid Oxygen Cartel in Latin America to participate in an International Bid-Rigging Workshop.
Recent case laws in Argentina, Brazil, Chile, Colombia, Mexico, Panama and Peru have shown how business patterns can be recurrent when competition authorities do not coordinate to tackle these types of cross-border anticompetitive practices and mitigate their impact on local consumers. Given a lack of international cartel enforcement mechanisms to deal with multi-jurisdictional investigations and the lack of effective domestic leniency programmes in Latin American jurisdictions with correspondent and reciprocal immunity between authorities (with the exception, notably, of Brazil), the international discovery and prosecution of these practices is virtually impossible.
As part of the COMPAL Regional Component, UNCTAD co-organised a 1st international workshop on International Bid Rigging together with the newly Ecuadorian Competition Authority (Superintendence for the control of market power - SCPM). The objective was to provide lessons on how concurrent case law was taking place during last decade 2002-2012 on similar business patterns in the same market: the liquid oxygen and these interventions were not necessarily coordinating. Seven jurisdictions that dealt with this market were invited to this workshop. These jurisdictions were Argentina, Brazil, Chile, Colombia, Mexico, Panama and Peru.
The expected outcomes of the workshop include:
• Examination of business patterns of multinational leaders (Praxair, Air Liquide, AGA and Messer) in the production of liquid oxygen, which were investigated in all assessed jurisdictions with the exception of Panama. Two regional companies from Mexico (Infra) and Chile (Indura) were also present in other jurisdictions, gradually gaining market power.
• Review of the investigation strategy of the cases examined: With the exception of Brazil´s standing towards cartel (of criminal nature), all authorities designed their investigation strategy based on direct allegations and sustained by economic evidence. In the case of Mexico's CFC, the administrative ruling decided not to sanction the case (despite economic evidence and some hard-core evidence) because the standard of proof was not sufficient to determine the existence of cartel and bid rigging activity.
• Review of the decision ruling: An interesting success story was made by Panama where the courts in first and second instance recognized the economic analysis made to sanction the case. Conversely, Chile's Supreme Court overturned the 1st instance ruling precisely because indirect evidence was not sufficient to prove the existence of a cartel.
• Future actions: It remains to be seen how courts will confirm or overturn the administrative rulings in Argentina, Brazil, Colombia and Peru. It seems that courts will prefer to upheld cases where hard-core evidence was found and overturned when this evidence was scarce.
- Eco. Pedro Paez. Head of the Ecuadorian Competition Authority (SCPM)
- Dr. Fernando Furlan. Ex- Chairman of CADE, Brazil
- Dr. Jaime Barahona. Deputy Head of the Chilean Competition Authority (FNE)
- Eco. Manuel de Almeida. Chief Economist of Panamanian Competition Authority (ACODECO)
- Eco. Alberto Ramos. Director of Economic Analysis. Mexican Competition Commission (CFC)
- Eco. José Paz y Mino. Case Handler Peruvian Competition Authority (INDECOPI)
Hassan Qaqaya, Head of the Competition and Consumer Policies Branch, DITC
Pierre Horna, Officer in Charge of the COMPAL Programme, Competition and Consumer Policies Branch, DITC
Patricia Cordovilla, Competition Unit Officer, COMPAL Programme, Competition and Consumer Policies Branch, DITC