The law, originally proposed a decade ago, was enacted on Friday, and will seek to regulate price-fixing, abuse of dominance and market concentration in the country. An agency will be created to enforce the rules, the National Commission of Competition (CONACOM), which will establish legally binding regulations, as well as be able to launch investigations and impose sanctions on companies which have violated the law.
Current rules were sparse and ineffective, explains FERRERE Abogados (Paraguay) partner Néstor Loizaga. “Despite the fact that competition is a recognized constitutional principle, competition was only regulated by a series of articles in isolated laws such as the merchant law, trademark law and a MERCOSUR protocol, amongst others,” he says.
Loizaga agrees that the country’s strong economic powers will no longer be able to drive the market. “Many practices have been common in the market such as cartels, tying, parallel agreements, different prices for same product, and so on,” he says. But companies have been given time to get their compliance up to scratch, he adds, with 180 days to review their contracts and train employees on how to deal with competitors and trade associations.
For Loizaga, the principal challenge ahead will lie in “the appointment of the people who will be in charge of enforcing [the law].”
Article published in Latin Lawyer on Thursday, 27 June 2013.