Competition Law Risks Loom Large in Chile and Latin America
Introduction
As businesses navigate the complex landscape of commercial policies, anticompetitive risks are increasingly becoming a major concern. In Chile, companies are at risk of facing severe sanctions for engaging in conduct that impedes free competition.
Chile’s Competition Regulation
According to Article 3 of Decree-Law 211, any individual or collective conduct that restricts or hinders free competition can result in fines of up to 30% of the offender’s sales or twice the economic benefit received from the infringement. In extreme cases, companies may even face dissolution or modification of their agreements and contracts.
Latin American Jurisdictions Face Anticompetitive Risks
While Chilean competition regulation provides a framework for antitrust enforcement, other Latin American jurisdictions have different approaches to combating anticompetitive conduct.
- Colombia: Criminal sanctions apply only to bid rigging, with fines of up to 1,000 legal minimum wage and imprisonment for between six and 12 years.
- Brazil: Cartels are considered federal crimes, and individuals may face fines and imprisonment for between two and five years. The Administrative Council for Economic Defence (CADE) has signed cooperation agreements with criminal prosecutors’ offices to make criminal prosecutions more effective.
Safeguards Crucial in Mitigating Competition Risks
To mitigate these risks, companies must implement safeguards and measures to avoid collusive behavior, including hardcore cartels and concerted practices. These measures include:
- Establishing internal mechanisms to identify and prevent anticompetitive behavior
- Seeking leniency programs if necessary
- Implementing reliable and effective compliance commitments
Ex ante Assessment of Concentrations Critical
The ex ante assessment of concentrations is also a critical component of competition law compliance. Companies must conduct thorough analyses of potential competition risks to ensure that their business activities do not infringe on antitrust regulations.
Training on Competition Compliance Essential
Finally, training on competition compliance is essential for executives and employees to ensure they are aware of the risks and consequences of engaging in anticompetitive behavior. The FNE’s Guidelines and the TDLC both emphasize the importance of comprehensive training programs.
Conclusion
In conclusion, companies operating in Chile and Latin America must be vigilant in ensuring compliance with competition laws to avoid severe sanctions and reputational damage. By implementing safeguards, conducting thorough analyses, and providing comprehensive training, businesses can minimize their exposure to anticompetitive risks and maintain a competitive edge in the market.