competition advocacy : the case · competition advocacy : the case of peru maria antonieta merino...
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COMPETITION ADVOCACY: THE CASE OF PERU
Maria Antonieta Merino Institutional Policy Development Office
The 2nd APEC Training Course on Competition Policy for APEC Member Economies
Bangkok, Thailand, August 8-10, 2006
Agenda
• Competition Law in Peru
• Indecopi: the competition agency in Peru
• Indecopi’s competition advocacy – activities performed
• Indecopi’s competition advocacy – challenges
Competition Law in Peru • Legislative Decree Nº 701 (1991): Free
Competition Law
• Objective: To eliminate monopolistic practices, controls and restrictions of free competition, so that free private enterprise can flourish for the greatest benefit of consumers
• In telecommunications, this law is also applicable, but the sector regulator (OSIPTEL) exerts, at the same time, competition law enforcement.
Competition Law in Peru (cont.)
• Article 3 bans all conduct related to economic activity that constitutes an abuse of dominance or that restrains free competition
• Article 4 defines dominance • Article 5 describes practices that are an abuse
of dominance • Article 6 describes the agreements and other
practices that do or may restrain free competition
• No provisions for ex ante merger control
Indecopi: the Competition Agency in Peru
• Law Decree Nº 25868 (1992): Establishment of Indecopi as national competition agency
• But Indecopi has other roles:
èProtection of consumers• rights
èProtection of intellectual property rights
èAdministration of national standardization and accreditation system
èAdministration of national metrology system
Indecopi: the Competition Agency in Peru
èInvestigation of dumping, subsidies, and safeguards practices related to foreign trade.
èInvestigation and sanction unfair competition conducts.
èIdentifies and enhances the abolition of technical barriers to trade and bureaucratic barriers to access to markets
èEnforces specific legislation intended to facilitate corporate market exit.
Indecopi: the Competition Agency in Peru
• Two quasi- jurisdictional bodies directly related to the administrative enforcement of the Competition Law:
èFree Competition Commission – CLC: first instance
èDefense of Competition Chamber – SDC: second instance (it also handles appeals from other six Commissions)
--MARKET ACCESS --FREE COMPETITION --REPRESSION OR UNFAIR COMPETITION --CONSUMER PROTECTION --ANTIDUMPING AND COUNTERVAILING --CORPORATE RESTRUCTURING --TECHNICAL AND COMMERCIAL REGULATIONS
DECONCENTRATED AND DECENTRALIZED
SERVICES OFFICE
BOARD OF DIRECTORS
TRIBUNAL
COMPETITION CHAMBER
INTELLECTUAL PROPERTY CHAMBER
ADMINISTRATION MANAGEMENT
ECONOMIC STUDIES
MANAGEMENT
LEGAL MANAGEMENT
GENERAL MANAGEMENT
INSTITUTIONAL POLICY DEVELOPMENT
INTERNAL AUDIT OFFICE
TECHNICAL COOPERATION AND INTERNATIONAL
RELATIONS
COMPETITION AND INNOVATION
PROMOTION
CORPORATE RESTRUCTURING
SECRETARIAT
INTELLECTUAL PROPERTY SERVICES
COMPETITION DEFENSE SERVICES
CONSUMER PROTECTION SECRETARIAT
NATIONAL METROLOGY
SERVICE
TECHNICAL AND COMMERCIAL REGULATIONS SECRETARIAT
--TRADEMARKS --INVENTIONS AND NEW TECHNOLOGIES --COPYRIGHTS
ADVISORY COUNCIL
DIRECT REPORTING RELATIONSHIP COORDINATION RELATIONSHIP
Organizational Chart
Indecopi’s competition advocacy: Activities performed
The unique institutional setting of Indecopi provides a useful basis to enhance Indecopi’s tasks in the field of advocacy of competition law and policy.
This includes different tasks like:
• Wide dissemination of information on legal proceedings.
• Explicit educational activities to develop a better understanding of the benefits of competition policy and to promote awareness of competition and intellectual property rules.
Indecopi’s competition advocacy: Activities performed
• Analysis and advice provided to governmental institutions on a number of topics
• Reports on the subsidiary role of the State with respect to the private sector activity.
• The performance of other mandates –i.e. Protection of consumer rights or fight against unfair competition, or implementation of standards, or protection of registered trademarks as a means of competition through product differentiation– complemented competition advocacy.
• Publications and meetings.
• The need for a revised legislation so as to overcome a number of weaknesses of current legislation
The Competition Authority has shaped and sponsored a bill which introduces relevant changes into the Competition Law, e.g. provisions to deal with mergers that could eventually give rise to anti-competitive practices and an integral treatment of the abuse of dominance by explicitly banning both exploitative and exclusionary or predatory conducts. The law proposal is under debate.
Indecopi’s competition advocacy: Challenges
Indecopi’s competition advocacy: Challenges
• The need for a wider business outreach as well as advice provided to governmental institutions
Indecopi is putting emphasis on a wider scope of competition defense (including the other roles it performs with competition-related implications) and on a higher degree of certainty and predictability by establishing procedural guidelines and mandatory precedents. Indecopi’s work includes special communication tools tailored to business demands and interests (i.e. publications), and corporate compliance programs (i.e. surveys).
Indecopi’s competition advocacy: Challenges
• Enforcement of Competition Law in informal sector activities
In Peru, the informal sector accounts for a sizable share of economic activity. There is a need to evaluate the enforcement of competition law and authority in this sector.
Some amendments may be needed in the competition law to restrain illegal practices but not informal activities. The Competition Authority has adopted different methodologies depending on the nature of conflicts.
Indecopi’s competition advocacy: Challenges
• Promoting competition concepts throughout the Judiciary
The lack of specialized knowledge on competition law in the Judiciary leads to emphasize on procedural issues rather than substantive issues when dealing with competition cases. From 1995 to 2000, Indecopi directly conducted a number of training activities on competition law targeted to judges but they ended because of budgetary constraints, austerity measures and the reluctance of judges to be trained by the Competition Authority.
Indecopi’s competition advocacy: Challenges
• Budget Allocation as a resource for competition advocacy
In addition to the fact that a new funding system is still an issue to be tackled, the Competition Authority faces constraints in assigning more personnel and funds in priority areas because of inflexibilities of the public administration to accept changes. In addition to self-generated funding, Indecopi received a partial contribution from fiscal budget to support its activities in 2005 (5% out of total Indecopi•s budget).
• The need of institutional strengthening and permanent independence
The Competition Authority has been increasing ex officio investigations and urging business sector to comply with relevant laws to promote competition and to protect the final benefit of consumers.
Indecopi’s competition advocacy: Challenges
