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Dimension III: Organization of Enforcing Agencies

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Regional Competition Law Enforcement in Developing Countries

Part of the book series: Munich Studies on Innovation and Competition ((MSIC,volume 9))

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Abstract

The institutional design of and the interplay between the competent competition law authorities and other bodies of law that are involved in regional competition law enforcement is of crucial importance in order to understand enforcement processes in the WAEMU, the AndeanC and the CARICOM. One thus has to identify the actors that participate in the enforcement process in the narrow sense, in particular the decision-making process. Moreover, one should also consider and evaluate the impact and reach of possible controlling mechanisms by other organs, such as judicial review or mandatory cooperation mechanisms.

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Notes

  1. 1.

    Commission de l’UEMOA.

  2. 2.

    Comité Consultatif de la Concurrence.

  3. 3.

    Art. 30 Agreement of Cartagena; Marwege, Der Andengerichtshof, 1994.

  4. 4.

    Articles 21ff. Agreement of Cartagena.

  5. 5.

    Also relevant for the development of competition policies in Latin America is the UNCTAD-led programme COMPAL. The COMPAL programme is a technical assistance programme on competition and consumer protection for Latin America, supported by SECO Switzerland. The programme is especially relevant for Bolivia, but it is also active in other member states of the AndeanC such as Ecuador and Peru.

  6. 6.

    Article 173(1) of the Revised Treaty of Chaguaramas.

  7. 7.

    The only action that could be considered an “active” enforcement action is Article 186(1) (b) of the Revised Treaty of Chaguaramas, according to which the Commission can “take such measures as it considers necessary to ensure that the Member States discourage and eliminate unfair trading practices, including misleading or deceptive conduct, false advertising, bait advertising, referral selling and pyramid selling”.

  8. 8.

    Article V of the Agreement Establishing the Caribbean Court of Justice, 2001.

  9. 9.

    Malleson, Promoting Judicial Independence in the International Courts, 58 I. C. L. Q. 671, 680 (2009).

  10. 10.

    Malleson, Promoting Judicial Independence in the International Courts, 58 I. C. L. Q. 671, 680 (2009); Article V(1) of the Agreement Establishing the Caribbean Court of Justice, 2001.

  11. 11.

    Malleson, Promoting Judicial Independence in the International Courts, 58 I. C. L. Q. 671, 680 (2009).

  12. 12.

    Article 172(2) and Article 172(3) of the Revised Treaty of Chaguaramas.

  13. 13.

    Article 172(4) of the Revised Treaty of Chaguaramas.

  14. 14.

    CARICOM Secretariat, The CARICOM Competition Commission, 2008, p. 6.

  15. 15.

    Article 174(4) (j) of the Revised Treaty of Chaguaramas.

  16. 16.

    Article 175(11) of the Revised Treaty of Chaguaramas.

  17. 17.

    CARICOM Secretariat, The CARICOM Competition Commission, 2008, p. 6.

  18. 18.

    Statement made by Kusha Haraksingh, Chairman of the CARICOM Competition Commission, in an interview with the author in Port-of-Spain, Trinidad and Tobago, on 29 October 2012.

  19. 19.

    CARICOM Competition Commission Rules of Procedure, 2011.

  20. 20.

    Definition according to the CARICOM Competition Commission Rules of Procedure, 2011: “Investigating Panel means a panel of the Commission designated by the Chairman pursuant to Rule 4(2) to conduct an investigation”.

  21. 21.

    Definition according to the CARICOM Competition Commission Rules of Procedure, 2011: “Adjudicating Panel means a panel of the Commission designated by the Chairman pursuant to Rule 10(2) to conduct an enquiry, with a view to making a determination pursuant to Article 174(3) of the Treaty and, if appropriate, to make an order, direction or imposition pursuant to Article 174(4) of the Treaty”.

  22. 22.

    For more information on the enforcement procedure in CARICOM, see below Part II, Dimension IV: Chap. 8.

  23. 23.

    Trebilcock/Iacobucci, Designing Competition Law Institutions, 41 Loy. U. Chi. L.J. 455, 457 (2010).

  24. 24.

    Article 173(2) (b) of the Revised Treaty of Chaguaramas.

  25. 25.

    Article 176(5) of the Revised Treaty of Chaguaramas.

  26. 26.

    Article 182 of the Revised Treaty of Chaguaramas.

  27. 27.

    Article 175(2) of the Revised Treaty of Chaguaramas.

  28. 28.

    Article 183 of the Revised Treaty of Chaguaramas.

  29. 29.

    Article 15 of the Revised Treaty of Chaguaramas.

  30. 30.

    Article 174(2) of the Revised Treaty of Chaguaramas.

  31. 31.

    Trinidad Cement Limited v The Competition Commission, Caribbean Court of Justice Application No. OA 1 of 2012, CCJ 4 (OJ), [26].

  32. 32.

    On different controlling mechanisms before a regional Court of Justice, see below Part II, Dimension IV: Sect. 8.3.

  33. 33.

    Trinidad Cement Limited v The Competition Commission, Caribbean Court of Justice Application No. OA 1 of 2012, CCJ 4 (OJ).

  34. 34.

    Beckford, in: Drexl/Bakhoum/Fox/Gal/Gerber, Competition Policy and Regional Integration in Developing Countries, 2012, pp. 185, 191.

  35. 35.

    Kovacic, Creating New Competition Policy Institutions in Transition Economies, 23 Brook. J. Int’l. Law 403, 431 (1997).

  36. 36.

    Articles 29ff. Agreement of Cartagena.

  37. 37.

    Action for non-compliance is divided into two parts: administrative part and judicial part. The administrative part takes place before the Secretariat General, where the affected parties can bring forward their standing regarding the matter. Artt. 23ff. of Treaty of the Creation of the Andean Tribunal of Justice, Decisión 623, “Reglamento de la Fase Prejudicial de la Acción de Incumplimiento”.

  38. 38.

    Articles 23ff. of Decision 409.

  39. 39.

    Generally, the AndeanC’s institutions are financed by the member states. However, Ecuador and Bolivia pay smaller shares. The AndeanC also relies on external funding, as for example provided by the European Union.

  40. 40.

    Articles 33ff. of Decision 409.

  41. 41.

    There is a 6th area, which deals with technical support by programmes such as the INTERCAN programme <http://www.comunidadandina.org/transparencia/organigrama.htm> accessed 11 November 2018.

  42. 42.

    Krakowski, El ambiente institucional de las autoridades de competencia en la Subregión Andina, 2003, p. 16.

  43. 43.

    Krakowski, El ambiente institucional de las autoridades de competencia en la Subregión Andina, 2003, p. 16.

  44. 44.

    Ibid.

  45. 45.

    Krakowski, El ambiente institucional de las autoridades de competencia en la Subregión Andina, 2003, p. 16.

  46. 46.

    During the prejudicial phase of an action of non-compliance of the Andean Tribunal of Justice, the General Secretary expresses itself through “Dictamen”.

  47. 47.

    On the internal procedure for the adoption of decisions of the European Commission, see Ortiz Blanco, EC Competition Procedure, 2006, pp. 49ff.; Rules of Procedure of the Commission [2000] OJ L308/26 (last amendment [2003] OJ 2003 L92/14).

  48. 48.

    Secretaria General de la Comunidad Andina, Guía Práctica para la aplicación de la Decisión 608 “Normas para la protección y promoción de la libre competencia en la Comunidad Andina”, 2007, p. 15.

  49. 49.

    Article 32 of Agreement of Cartagena.

  50. 50.

    Article 8 of Decision 409.

  51. 51.

    Articles 5, 13, 15 of Decision 409.

  52. 52.

    The Secretariat General mostly employs economists and only very few lawyers, of which only one is currently assigned to deal with competition law matters exclusively.

  53. 53.

    Articles 36ff. of Agreement of Cartagena.

  54. 54.

    Under the former Decision 285, the Secretariat General dealt with three cases, of which two were rejected on the basis that they did not fall within the scope of application. The only case, which was actually prosecuted and led to the imposition of a sanction concerned a price cartel among palm oil producers in Colombia; see below Resolution 892, Part II, Dimension IV: section “Resolutions Concerning the National Confederation of Palm-Growers and Palm Oil Enterprises (Peru) vs. Fund for Price Stabilisation for Palm-Oil and Its Fractions (Colombia)”. For more information on the two other non-competition law cases under Decision 285, see Botta, The Role of Competition Policy in the Latin American Regional Integration: A Comparative Analysis of Caricom, Andean Community and Mercosur, 21–22 October 2011, St. Gallen, p. 21.

  55. 55.

    For more information on the enforcement procedures see Part II, Dimension IV: Sect. 8.1.

  56. 56.

    There are national cases from Bolivia, Colombia, Ecuador and Peru that consider Article 5 of Decision 608, but all cases come to the conclusion that there was no cross-border effect.

  57. 57.

    According to the Commission of the AndeanC, 46% of the Secretariat General’s budget is spend on salaries. The budget of the Secretariat General has been stable between 1993 and 2002. Even when some member states were late with their financial contributions, the Secretariat General was capable to pay salaries on time because of installed funds. See Krakowski, El ambiente institucional de las autoridades de competencia en la Subregión Andina, 2003, pp. 16f.

  58. 58.

    Article 26 of the Treaty of Dakar.

  59. 59.

    Article 27 of the Treaty of Dakar.

  60. 60.

    Article 28 of the Treaty of Dakar.

  61. 61.

    Article 27 of the Treaty of Dakar.

  62. 62.

    Decision n° 0157/2007/PCOM/UEMOA, portant création et organisation des services de la Commission de l’UEMOA.

  63. 63.

    Decision n° 345/2008/PCOM/UEMOA, portant organisation du département du marché régional, du commerce, de la concurrence et de la coopération.

  64. 64.

    Decision n° 345/2008/PCOM/UEMOA, portant organisation du département du marché régional, du commerce, de la concurrence et de la coopération.

  65. 65.

    More details on the enforcement process of regional competition law in the WAEMU, see below Part II, Dimension IV: Chap. 8.

  66. 66.

    More details on the Advisory Committee on Competition in the WAEMU, see below Part II, Dimension IV: Sect. 8.2.1.1.

  67. 67.

    Articles 28(3), 22 and 23 of Regulation no. 03/2002/CM/UEMOA.

  68. 68.

    Direction des Affaires Juridiques.

  69. 69.

    Bakhoum/Molestina, in: Drexl/Bakhoum/Fox/Gal/Gerber, Competition Policy and Regional Integration in Developing Countries, 2012, pp. 89, 94.

  70. 70.

    Article 31 of Regulation no. 03/2002/CM/UEMOA; Article 8 of the Additional Protocol no. 1.

  71. 71.

    For more information on the judicial control in the WAEMU, see in particular Part II, Dimension IV: Sect. 8.3.2.4.

  72. 72.

    For example: Affaire ASKY or Affaire GAZODUC de l’Afrique de l’Ouest. Tchapga, La politique de la concurrence dans la CEMAC et l’UEMOA, 1 Conc. 237, 244 (2013). According to Tchapga, 23 of the 33 cases between 2007 and 2011 constituted tariff and non-tariff related trade barriers that affected the commercialization of several products on the common market and only 9 cases dealt with restrictive practices to competition.

  73. 73.

    Examples for state aid related cases in WAEMU are: Affaire CAMEG; Décision invitant du Sénégal à retirer la norme NS 03-072.

  74. 74.

    Décision n° 05/2005/COM/UEMOA portant interdiction d’exonérer le clinker importe, rendered on 21 October 2005.

  75. 75.

    Décision n° 08/2010/COM/UEMOA invitant l’Etat du Sénégal à mettre fin aux exonérations accordées sur les importations d’emballages en papier kraft, rendered on 1 August 2010.

  76. 76.

    For a brief summary see Bakhoum/Molestina, in: Drexl/Bakhoum/Fox/Gal/Gerber, Competition Policy and Regional Integration in Developing Countries, 2012, pp. 89, 101.

  77. 77.

    Affaire concentration entre SIFCA, COSMIVOIRE et al... et UNILEVER CI.

  78. 78.

    Affaire Sotelma-Malitel contre Orange Mali (agreement), Affaire STAF contre SONAPOST et Etat du Burkina (abuse of dominance), Affaire CANAL OVERSEAS (abuse of dominance). For a brief summary see Bakhoum/Molestina, in: Drexl/Bakhoum/Fox/Gal/Gerber, Competition Policy and Regional Integration in Developing Countries, 2012, pp. 89, 102.

  79. 79.

    Example for cases based on private initiative: Affaires SOCOCIM contre Etat du Sénégal et CIMENTS du Sahel.

  80. 80.

    See, for instance, the Senegalese case DHL v Société Nationale la Poste (complaint of 13 October 2003) was forwarded to the WAEMU Commission; Annex 5 of Commission Nationale de la Concurrence du Sénégal, Rapport Public 2002–2003, p. 60; UNCTAD, Voluntary Peer Review on Competition Policies of WAEMU, Benin and Senegal, 2008, p. 149.

  81. 81.

    Goretti/Weisfeld, Trade in the WAEMU: Developments and Reform Opportunities, 2008, p. 8 <http://www.imf.org/external/pubs/ft/wp/2008/wp0868.pdf> accessed 11 November 2018; Bakhoum, Delimitation and Exercise of Competence between the West African Economic and Monetary Union (WAEMU) and its Member States in Competition Policy, 29/4 W. Comp. 653, 679 (2006); Bakhoum/Molestina, in: Drexl/Bakhoum/Fox/Gal/Gerber, Competition Policy and Regional Integration in Developing Countries, 2012, pp. 89, 101f.

  82. 82.

    UNCTAD, Voluntary Peer Review on Competition Policies of WAEMU, Benin and Senegal, 2008, p. 64.

  83. 83.

    UNCTAD, Voluntary Peer Review on Competition Policies of WAEMU, Benin and Senegal, 2008, p. 65.

  84. 84.

    UNCTAD, Voluntary Peer Review on Competition Policies of WAEMU, Benin and Senegal, 2008, p. 63: The report refers to the case “MALITEL against Orange”, in which the complaint was first lodged before the Mali competition authority and then referred to the WAEMU Commission. It was not clear whether the file was transmitted for simple information, opinion or in order to receive a decision.

  85. 85.

    UNCTAD, Voluntary Peer Review on Competition Policies of WAEMU, Benin and Senegal, 2008, p. 109.

  86. 86.

    Bakhoum/Molestina, in: Drexl/Bakhoum/Fox/Gal/Gerber, Competition Policy and Regional Integration in Developing Countries, 2012, pp. 89, 101.

  87. 87.

    For more details on the impact of regional competition law on the national competition law system, see above Part II, Dimension II: Sect. 6.1 (WAEMU), Sect. 6.2 (CARICOM) and Sect. 6.3 (AndeanC).

  88. 88.

    De León, An Institutional Assessment of Antitrust Policy, 2009, p. 537.

  89. 89.

    Bakhoum/Molestina, in: Drexl/Bakhoum/Fox/Gal/Gerber, Competition Policy and Regional Integration in Developing Countries, 2012, pp. 89, 100.

  90. 90.

    Investigation into the acquisition of Oceanic Digital (Jamaica) Limited by Digicel Jamaica Limited, Pursuant to Section 17 of the Fair Competition Act Staff Report December 8, 2011, Case no. 6997-11; Part II, Dimension I: Sect. 5.2.3.1.

  91. 91.

    This was the case in Senegal, Benin and Mali; see Bakhoum/Molestina, in: Drexl/Bakhoum/Fox/Gal/Gerber, Competition Policy and Regional Integration in Developing Countries, 2012, pp. 89, 100. The situation is similar in Niger, see Bakhoum, A Developing-Country Perspective on “Global Competition”, 28 October 2011, Chicago, pp. 8, 12.

  92. 92.

    Generally on the integration of consumer law in a competition authority, see Cseres, Integrate or Separate. Institutional Design for the Enforcement of Competition Law and Consumer Law, 11 April 2013 <http://ssrn.com/abstract=2200908> accessed 11 November 2018.

  93. 93.

    Decision no. 02-D-02, Syndicat des agences de voyage contre Air France: Air France was held in 2002 by the Senegalese Competition Commission to have abused its dominant position on the market of connections between Senegal and France by unilaterally imposing lower commission rates for travel agencies, which they had to accept because of their economic dependence. For more information see CUTS, Vers des régimes efficients de la concurrence par le renforcement des capacités dans des pays sélectionnés d’Afrique de l’Ouest, 2009, pp. 30f. Yet the case also demonstrates difficulties with regard to the qualification of the practice and the adoption of economic dependence approach. An appeal was submitted to the Council of State. However it was withdrawn in 2009. See UNCTAD, Voluntary Peer Review on Competition Policies of WAEMU, Benin and Senegal, 2008, p. 108; Weick, Competition Law and Policy in Senegal, 33/3 W. Comp. 521, 531 (2010).

  94. 94.

    Senegal’s Competition Commission, The Handbook of Competition Enforcement Agencies 2014, p. 271.

  95. 95.

    Bakhoum, A Developing-Country Perspective on “Global Competition”, 28 October 2011, Chicago, p. 10.

  96. 96.

    Under the presidency of Alejandro Toledo “all of the members of INDECOPI’s Antidumping Commission resigned on the same day and were replaced four days later by a Commission whose President was an oil executive and an official in Peru’s National Industries Society. Shortly thereafter, the Commission’s Technical Secretariat resigned.”, see OECD, Competition Peer Review Report of Peru, 11/1 OECD J. Comp. L. Policy 177, 184 (2009); OECD, Peer Review on Competition Law and Policy in Colombia, 2009, p. 21.

  97. 97.

    See the experiences of Emilio José Archila, former Superintendent for Industry and Trade, who had ruled against the merger of the airlines Avianca (state-owned) and Aces airlines in 2001. He was then replaced after the airlines had questioned his impartiality; see Airline Business, 1 October 2001, “Aces-Avianca faces new obstacles” <http://www.flightglobal.com/news/articles/aces-avianca-faces-new-obstacles-136853/> accessed 11 November 2018; El Tiempo, 02 July 2001, “Avianca gana el pulso” <http://www.eltiempo.com/archivo/documento/MAM-469166> accessed 11 November 2018. See also Fox/Healey, When the State harms Competition – The Role for Competition Law, 2013, p. 44 <http://ssrn.com/abstract=2248059> accessed 11 November 2018.

  98. 98.

    For more information on the Jamaican competition law system, see above Part II, Dimension I: Sect. 5.2.3.1.

  99. 99.

    The diversity of national sectorial regulation is only dealt with briefly in this study, because it would go beyond its scope. Yet the study highlights the implications that arise out of national sectorial regulation on regional competition law enforcement.

  100. 100.

    With regard to Benin, Burkina Faso and Senegal in the WAEMU, see UNCTAD, Voluntary Peer Review on Competition Policies of WAEMU, Benin and Senegal, 2008, pp. 34f., 44f., 78ff., 137ff. With regard to Senegal, see Weick, Competition Law and Policy in Senegal, 33/3 W. Comp. 521, 534ff. (2010). With regard to Colombia and Peru, see De León, An Institutional Assessment of Antitrust Policy, 2009, pp. 441ff. With regard to Barbados and the OECS in the CARICOM, see Sampson/Sampson, in: Mehta/Evenett, Politics Triumphs Economics?, 2009, pp. 327, 336ff.

  101. 101.

    De León, An Institutional Assessment of Antitrust Policy, 2009, p. 453. This was for example the case in Bolivia. See above Part II, Dimension I: Sect. 5.2.2.2 and Part II, Dimension II: Sect. 6.3.3.

  102. 102.

    De León, An Institutional Assessment of Antitrust Policy, 2009, p. 420.

  103. 103.

    For examples of unsynchronised Regulations and Competition Laws, see Mehta/Agarwal/Singh, Politics Trumps Economics, 2007, pp. 29ff.; De León, An Institutional Assessment of Antitrust Policy, 2009, pp. 456ff.

  104. 104.

    De León provides a brief overview of the competence demarcation criteria in some states of Latin America, see De León, An Institutional Assessment of Antitrust Policy, 2009, pp. 441ff.

  105. 105.

    Sampson/Sampson, in: Mehta/Evenett, Politics Triumphs Economics?, 2009, pp. 327, 344ff.

  106. 106.

    According to the Peer review of the UNCTAD with regards to the WAEMU, “it might be that in the absence of confirmation by future decisions of the national and community competition authorities, in case of conflict of jurisdiction, the specific regulation might have precedence over community law.” See UNCTAD, Voluntary Peer Review on Competition Policies of WAEMU, Benin and Senegal, 2008, p. 35. Yet, all practices that fall under Article 88 of the Treaty of Dakar also underlie the principle of primacy of regional law; see above Part II, Dimension II: Sect. 6.1.

  107. 107.

    Regarding the diversity of institutional design among European competition authorities, see Cseres, Integrate or Separate. Institutional Design for the Enforcement of Competition Law and Consumer Law, 11 April 2013 <http://ssrn.com/abstract=2200908> accessed 11 November 2018.

  108. 108.

    In the WAEMU, sector regulation harmonization was attempted in the agriculture, transport, banking and financial, insurance companies, energy and telecommunications sector. See UNCTAD, Voluntary Peer Review on Competition Policies of WAEMU, Benin and Senegal, 2008, p. 34. In the AndeanC, harmonization of economic policies is considered essential for the increase of intra-community trade; see in this regard Secretariat General, “Armonización de Políticas Económicas en la Comunidad Andina”, document of 18 September 1998, <http://www20.iadb.org/intal/catalogo/PE/2011/07349.pdf> accessed 30 August 2017. In the CARICOM, harmonization of laws includes a harmonisation of provisions related to companies, intellectual property, as well as to economic, fiscal and monetary measures that are supposed to strengthen the CSME <http://www.caricom.org/jsp/single_market/single_market_index.jsp?menu=csme> accessed 11 November 2018.

  109. 109.

    See above Part II, Dimension II: Sect. 6.1 (WAEMU), Sect. 6.2 (CARICOM) and Sect. 6.3 (AndeanC).

  110. 110.

    This was the case in Benin as a member state of the WAEMU.

  111. 111.

    This is the case in Barbados and Jamaica in the CARICOM.

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Molestina, J. (2019). Dimension III: Organization of Enforcing Agencies. In: Regional Competition Law Enforcement in Developing Countries. Munich Studies on Innovation and Competition, vol 9. Springer, Berlin, Heidelberg. https://doi.org/10.1007/978-3-662-58525-2_7

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