In 2015, the Uruguayan competition authority requested an UNCTAD peer review of the country's competition law and policy.
The review process began in Montevideo in July 2015 and the report was presented in Geneva on 20 October 2016 at the 15th session of the UNCTAD Intergovernmental Group of Experts on Competition Law and Policy. Following the presentation, we sat down with Adriana Riccardi, head of Uruguay's competition authority.
Q: Could you tell us a bit about the competition authority and what it does?
A: Uruguay's competition authority was set up in 2009 to enforce the country's competition law. The goal is to make sure everyone is playing by the rules and that free competition prevails in all markets. Consumers should have access to the best goods and services and to the lowest prices.
Basically, we assess markets to detect signs of anticompetitive behavior and investigate allegations of practices such as abuse of dominant position, vertical restrictions and collusive agreements.
Q: Could you give an example?
A: In one case, a large supermarket was setting the minimum price at which small grocery stores were selling frozen foods.
This supermarket said it would only buy from the frozen foods supplier if the supplier could ensure that small grocery stores did not sell the products for less.
In turn, the supplier told the small grocery stores that he would stop selling to them if they sold their products for less than the large supermarket. The practices were forbidden and those involved were sanctioned.
- Voluntary peer review of competition law and policy: Uruguay (Overview)
- Voluntary Peer Review of Competition Law and Policy: Uruguay (Full Review)
Q: Why did you want UNCTAD to do a voluntary peer review of Uruguay's competition law and policy?
A: After several years of experience, we started identifying areas where we thought there was room for improvement, either within the law itself or how we enforced it.
But before setting about changing a law or enforcement processes, it's very important to undertake an in-depth diagnosis of the situation and benchmark it against international best practices.
So when we heard UNCTAD was taking applications for its next peer review, we jumped at the opportunity. Such a process would give us the independent, expert analysis that we would need to back changes to the law or to our enforcement processes.
Q: How long was the process?
A: The review process started in November 2015. The first draft was submitted to the peer reviewers -- the competition authorities of Mexico, Peru and Spain -- in March of this year, and we had the public review of the main findings today in Geneva.
Q: What lessons were learnt?
A: Some of the main findings have to do with how we control market concentration and regulate anticompetitive practices.
The review pointed out that an economic concentration in Uruguay, for example when two companies merge, only requires the competition authority's authorization when it leads to a de facto monopoly. This, according to the reviewers, is a very high requirement compared to international best practice.
The recommendation is that the law should allow us to intervene in cases where the concentration might have anticompetitive effects, even if it doesn't establish a de facto monopoly. In this way, we can control market concentration more effectively.
The recommendation was similar for our regulation of anticompetitive practices. The reviewers found that although Uruguay's definition of abuse or dominant position is in line with the internationally accepted definition, the definition doesn't include a list of practices included in the prohibition, which is contrary to international best practice.
Regarding institutional aspects, the review recommended more independence and autonomy for the competition authority. And it suggested that a single entity be established for enforcing competition law. Right now, sectoral regulatory bodies have the authority to enforce competition in their sector.
Q: So now that the report has been completed, what are the next steps in the process?
A: We'll work on an action plan with UNCTAD to put in place the report's recommendations. According to UNCTAD's peer review program, this will include advocacy campaigns and training programmes for the competition authority and for other government agencies involved in promoting and defending competition.
In addition to the legislative processes needed to make the recommended changes to the competition law, we'll go ahead and start working on the recommendations that we can implement at our level.
For example, we had proposed some procedural adjustments, such as extending the period allowed for a company under investigation to provide all available evidence in their defence. Currently, the law provides 10 days and we would like to make it possible to extend the period for an additional 10 days. This is something the reviewers also recommended and it's a change that does not require a decision by parliament.