Defending your freedom to compete
Edition Nº 18
Our Contributors 2
Central American Competition Forum
Research for possible Relative Monopolistic
Practice in the Sale of Uniforms with the
In Numbers 7
Credit Cards, Cost Analysis, Nominal Annual
Interest Rate (%) and Annuity to November 2018
BULLETIN FREE COMPETITION PANAMA Involving the private sector in the process of modernizing the promotion and
defense of free competition
By: Oscar García Cardoze - Administrator of ACODECO
Within the framework of the XII Central American Competition Forum, of the Central American Network of National Authorities Responsible
for the Competition Issue, held in the city of San Salvador, El Salvador, on October 24 of this year, I shared with colleagues from the region,
relevant events regarding competition policy in Panama during the year 2018.
In terms of institutional diagnosis, the level scheme (investigations in administrative headquarters –ACODECO - and decisions in the judicial
office) has not had the desired effectiveness to promote a competitive environment in the country. Decisions made in court are not efficient
because they do not restore opportunely the conditions of competition in the markets.
Penalties for noncompliance have little dissuasive power ("payment for violating the law"), has motivated the completion of transactions in
various processes that allow effective restoration of competition.
Law 45 of 2007 to discourage the commission of infractions to free competition, was equipped with a detection instrument to increase the risk
of being detected, the Leniency Policy, however, to date there have been no applicants. Being a small country is a factor (without being the
only one) that we consider reduces the incentives to betray, for the future risks of reprisals, to have to coexist in the market with the betrayed.
Given the above, the reform proposals contemplate moving from a judicial scheme to an administrative one where the ACODECO, would go
on to decide the monopolistic practices in a single instance, with which the corresponding administrative procedure is created. The resolution
would be appealable before the Third Chamber of the Supreme Court of Justice.
Given the low natural ability to detect anti-competitive behavior, the need to increase sanctions is raised to raise the mathematical expectation
of the risks of collusion.
In the substantive it is proposed to adopt and adapt the Best Recommended Practices in matters of anticompetitive behavior and control of
The Boycott that is currently a relative practice passes to absolute practices, given that its configuration arises from a concertation between
Business associations that instigate or participate in monopolistic practices may be sanctioned.
In terms of mergers, it is proposed to move from a voluntary system to a mandatory reporting system for mergers operations that exceed a
In this process of trying to make the approval of the reform proposals viable, we have explained to the private sector the reasons and scope
of the proposed changes to the Law, through meetings with different business associations.
From a perspective of promoting the culture of free competition within the economic agents that develop their activities in the Republic of
Panama and in accordance with the provisions of paragraph 6 of Article 86 of Law 45 of 2007, we have launched the program corporate
compliance (approved by resolution No. A-008-18 of January 18, 2018) of the free competition regulations, making available to interested
economic agents to self-regulate voluntarily to comply with competition regulations.
The guide contains the general guidelines that ACODECO estimates may contain a Corporate Compliance Program (PCC, acronym in
Spanish) that voluntarily implements an economic agent committed to complying with the regulations of free competition. The PCC contains
the policy adopted by an economic agent, through which it discloses, both to its employees and to third parties, what behaviors should be
followed and which are questioned under the rules of free competition.
In summary, we consider that the participation of the private sector throughout the process of modernizing the defense and promotion of free
competition is of vital importance.
2 OUR CONTRIBUTORS
Research for possible Relative Monopolistic Practice in the Sale of Uniforms with the UDELAS Logo
de las Américas (FUNDAMÉRICAS, defines the characteristics of the FREE COMPETITION BULLETIN
acronym in Spanish) to develop the uniforms and the logo of the university, PANAMA
project Tiendita Universitaria (University and decides who can market their logo.
Store), for the sale of articles and
services of interest to the university Due to the foregoing, the DNLC
community. recommended by preliminary report the
non-opening of the investigation and the
Based on the documentation obtained archiving of the administrative file by the
The National Directorate of Free from the preliminary investigation, we alleged monopolistic practice
Competition (DNLC) received a could verify that Grupo Rosmar was commission against UDELAS and
FUNDAMÉRICAS, as there are no
complaint from Grupo Rosmar, S.A., engaged in the manufacture and sale of elements that prove the violation of
with the Universidad Especializada de uniforms with the UDELAS logo. numeral 9 of article 16 of Law 45 that
las Américas (UDELAS, acronym in FUNDAMERICAS does not make states: "In general, any act that
Spanish) concerning the sale of student uniforms and UDELAS does not unreasonably damages or impedes the
uniforms. We proceeded to investigate participate in the relevant market of process of free economic competition
the existence of a presumed relative which Grupo Rosmar and and free competition in the production,
monopolistic practice and the FUNDAMERICAS are part, that is, it processing, distribution, supply or
investigation showed that UDELAS does not participate in the sale of marketing of goods or services."
authorized the Fundación Especializada uniforms with the UDELAS logo. It only
Monopolistic Practices and Unfair Competition in the Commercialization of Fuel
The National Directorate of Free was possible to determine an imbalance prepared by one or both denounced
Competition (DLNC, acronym in between the economic agents that economic agents, in order to displace
Spanish) of the Authority for Consumer comply with the regulations and those the complainant unreasonably or
Protection and Defense of Competition that only partially comply, in practical prevent access, as is established by
(ACODECO, acronym in Spanish), terms, a competitive advantage is Law 45 of 2007, were observed. The
acquired knowledge and investigated a artificially generated from the economic scenarios presented in the complaint,
complaint about irregularities that occur agents that do not comply, in relation to they are situations corresponding to the
on the upper coast of the province of those that do comply with the operation in said market in which the
Colon, in relation to the established regulations. regulator of the matter has adopted the
commercialization of gasoline and measures that the law allows.
diesel by the companies Super Centro After the analysis, it was emphasized
Palenque (SCP), located in the that while those denounced when Regarding the issue of unfair
township of Palenque, and Distribuidora exercising a private economic activity in competition, it was stressed that
Ocean King, S.A. (DOK), located in the the Republic of Panama, they are under ACODECO is not the competent
township of Miramar, both in the district the scope of Law 45 of 2007, so that a authority to air this type of complaint. As
of Santa Isabel, province of Colon. The possible absolute or relative a result of the investigation, the closing
complaint establishes that there is unfair monopolistic practice can be set up and filing of the administrative file was
competition and monopolistic practice before the specialized courts of Free ordered.
on the part of the indicated companies, Competition, certain requirements must
since they do not comply with the be met. As a result of the investigation,
established norms, causing serious the DNLC failed to observe compliance
damages when fulfilling their with the requirements established in
commitments with the bank and the oil articles 13 or 16 of Law 45 of 2007.
company that sells the fuel.
No indications that an absolute or
During the analysis of the complaint, it relative monopolistic practice is being
BULLETIN FREE COMPETITION PANAMA The National Directorate of Free the members of the ISP, in order to The participation of several suppliers
Research of a Possible Relative Monopolistic Practice by International School of Panama
Competition of the ACODECO, initiated
an investigation, result of a complaint gather more information to determine if interested in offering their services,
the ISP performs unlawful and
makes clear the existence of a free
presented by the National Chamber of unreasonable behavior with the economic concurrence in the act, being
School Transporters (CANATRACOL, intention of prevent the process of free reasonable the process of free
acronym in Spanish), in relation to the economic competition and free competition and not an act that could be
possible commission of a restrictive competition in the private bidding considered discriminatory.
monopolistic practice of competition, process.
typified in Article 16 of Law 45 of In this regard, the closure of the
October 31, 2007, on a private tender Based on the information presented by investigation was recommended, since
process for the provision of school the ISP, ACODECO analyzed additional it cannot be considered that the act
student transport by The International aspects of the act of private bidding for denounced for the provision of school
School of Panama (ISP). the students transport and its award by transport services through a bidding
ISP, which participated as bidders 11 process, had the object or effect of
The ACODECO, based on the companies, a situation that shows us discriminating, preventing access or
administrative information contained in more accurately the existence of greater establishing advantages to other
the file, makes the decision to summon concurrence of companies, interested in agents, limiting the competition in the
said act . transportation of students of The
In the same way, it is not observed that International School of Panama, in the
ISP has carried out actions that limit or city of Panama.
diminish the possibilities of participation
of suppliers, including participation also
the denouncing companies and that in
turn were adjudicated.
VIII Annual Meeting of the Working Group on Trade and Competition of Latin America and the
Caribbean, Brasilia 10-11 October 2018
The meeting addressed different topics aside the ease of access and proximity anticompetitive practices where several
related to maritime transport, among the to productive centers. In view of this, restrictions on competition may arise at
topics presented was a study related to competition issues are even more a given time, depending on the
competition in the services sector and relevant, based on the fact that mergers characteristics of each port, elements
port infrastructure in Latin America and in any part of the logistics chain can such as the geographical position, the
the Caribbean, where port directly affect the port sector, either by need for specialized equipment, as well
competitiveness was analyzed, mainly generating preferential treatment or by as the installed capacity are some of the
in the verification of how different limiting options to users for the benefits elements that can play an important role
countries handle aspects of competition, of others. In this sense, the regulation of in restricting competition.
ports cannot be observed separately, port activity becomes relevant to
especially when the object of analysis is minimize opportunistic behavior, when Another study presented at the event
competitiveness, ports are an effective required. was that prepared by UNCTAD in
part of the productive logistics chain, relation to the "Challenges faced by the
they have to guarantee their connection In other sessions the topic of countries of Latin America and the
with other ports at the same time as with competitiveness and port management Caribbean in matters of competition and
other transport systems, without leaving was seen, as well as issues related to regulation in the maritime transport
sector"; in this study it is mentioned that structure of the markets and the latest restricted the participation of actors that
more than 80% of the world developments with respect to already had a prior concession, which FREE COMPETITION BULLETIN
merchandise trade in volume and more competition and concentration in the could be seen as a constraint on PANAMA
than 70% in value, is transported by sea sector. ACODECO participated as a competition. After analyzing the market
and handled in maritime ports around panelist in the topic "Opinion on the conditions, ACODECO concluded that
the world, more than half of the world's state decision to ensure the participation the restriction of participation in the
maritime trade is handled in containers, of a new container port operator in the bidding documents did not limit
which makes maritime transport a key to Panamanian Pacific, 2006", where a competition, basically because what
trade and development of the people, query was addressed to the restriction would limit the restriction was a possible
the study addressed the regulatory presented in the statement of charges port monopoly in the entrance of the
framework of the line transport sector for the tender for a new concession for a Pacific Ocean of the Panama Canal.
and the related issues of competition in port on the Panamanian Pacific coast
a general way, emphasizing the (entrance to the Panama Canal), which
Sixteenth Annual Meeting of the Latin American and Caribbean Forum on Competition (FLACC) and
the Latin American Competition Forum, held in Buenos Aires, Argentina from
September 18 to 20, 2018
ACODECO, participated in the percentage of informal economy
Sixteenth Annual Meeting of the Latin exceeds 59%, a sensitive aspect for
American and Caribbean Forum on these economies.
Competition (FLACC) and the
Ibero - American Competition Forum, However, the perspectives and
which was held in Buenos Aires, approach of each agency of competition
Argentina from September 18 to 2018, on the dilemma of the informal economy
allowing the expansion of knowledge and the way in which they can be
and importance of the Informal formalized, that is to say, from the
Economy, the Industrial Policy, and the informal to the formal, entails a series of
Leniency Program. steps, mainly because the problems of
informality entail a self-critic towards the
The focus of the Informal Economy in State due to the low capacity to
Latin America and the Caribbean was formalize them, to have a tax burden
fundamental, counting on samples from that does not allow them to formalize, as
countries in the region, whose well as the aspect of low productivity in
BULLETIN FREE COMPETITION PANAMA the informal market. policy and promotion of domestic contributions in their improvements that
industry, confronting the reality of an
can be provide support to other
Other critics in the Forum established
competition agencies and implement
industry that requires competition
that informality is an issue that escapes
the research branch of the competition policies, to help strengthen and support them, allowing the company that is part
the locally produced was also analyzed.
of the cartel, provide information,
agencies in each country, as obtaining a reduction or elimination of
anti-competitive practices are Moreover in the Ibero-American your fine, provided that such information
investigated, formal companies and / or Competition Forum, held on September provided regarding the cartel formed, is
cartels, an aspect that is foreign to the 20, the Leniency Program was forceful and effective, therefore
informal companies. deepened, through discussion tables, eliminating the anticompetitive conduct.
counting on the experiences of the
The role of competition within industrial different competition agencies and the
Procedure of Class Actions in the Servicio Nacional del Consumidor (SERNAC) in Chile and an
explanation of ACODECO's audit procedures
SERNAC, an inter-collective indemnity looks for compensation, that consumers
action, to repair the damage caused to are repaired and compensated for all
consumers by the overpricing of the economic damages caused by the
medicines. breach of the law by the suppliers that
have carried out anti-competitive acts.
Another interesting case was the
collusion between the three main ACODECO, on the other hand, shared
chicken producing companies, after the the institutional experience in the
decision of the Court of Defense of the inspection, verification and sanction
Competence was issued, SERNAC filed procedures that are processed in the
a class collective proceeding in order to
The topics discussed were mainly compensate consumers for the damage different administrative areas of both the
related to judicial processes and caused, by paying the surcharge for the National Directorate of Consumer
collective class mediations for Protection and the National Directorate
anticompetitive illicit acts, through which chicken product of the collusion or the of Free Competition.
SERNAC has recovered significant affectation to the access the purchase of
sums of money from consumers for chicken product d the price premium.
damages. Some cases carried out by SERNAC,
Compensation to consumers was are in legal proceedings and others
related to acts of collusion, such as the have been treated through collective
pricing of medicines by the main drug mediation figure, management is carried
chains in Chile; agreement between out internally by SERNAC.
competitors that was sentenced by the In order to calculate the damage to the
Court of Defense of Free Competition of consumers, they count on the Division
that country, which confirmed the of Financial Consumption, department
existence of the anti-competitive act in charge of making the technical
through which was fixed in a reports (economic-juridical) on the
coordinated way the sale price of
medicines. Through the efforts of amounts of money to compensate. It
Credit Cards, Cost Analysis, Nominal Annual Interest Rate (%) and Annuity to
November 2018 PANAMA FREE COMPETITION BULLETIN
The Authority of Consumer Protection and Competition Defense (ACODECO,
acronym in Spanish), in compliance with the provisions of Law 81 of 2009,
compiles directly and through the Superintendence of Banks, the sworn
statements of those entities dedicated to the issue of credit cards and other
financing cards in the Republic of Panama. The purpose of this data collection
is to inform the consumer and / or account holder about the annual nominal
interest rate (%) and other additional charges for the credit and financing cards
currently offered in the local market.
In this market there is a wide variety of products, with characteristics appropriate to the profile of the cardholder, so we
recommend consumers who wish to purchase a credit card or who already have one, evaluate the one that suits their needs,
provide greater benefits and always try to maintain good management of your account (ability to pay, accumulation of miles if
you need to travel, points program, return of a percentage of your purchases or cash back, annuity cost, insurance, among
other variables to consider).
Regarding the range of extreme values, interest rates have remained stable mostly, compared to last quarter.
The Financing Cards are products (financial instruments) issued by some companies to provide credit facilities to their
customers, in purchases made in their establishments. They present particular characteristics that the consumer must evaluate
at the moment of acquiring them.
For this period, the following economic agents reported information: Banco Azteca (Warehouses ELEKTRA), GRAN
MORRISON, RODELAG, Importadora Maduro, S.A. (FELIX), REY Supermarkets, ROMERO Supermarkets and the Financial
Company FINANCE CREDIT, S.A. (See chart below).
The full report can be found at www.acodeco.gob.pa
IN NUMBERS 7
BULLETIN FREE COMPETITION PANAMA
Average Annual Nominal Interest Rates Lower and Higher, Some
Credit Cards, by Type of Card and Issuing Entity: November 2018
8 IN NUMBERS
Panama Free Competition Bulletin reaches its edition No. 18
The National Directorate of Free Competition of the ACODECO releases every three months from September
2015 to date through the National Free Competition Bulletin of Panama, the achievements, recent goals,
investigations, presented demands, competition law, seminars between many other management activities.
The objective of this newsletter has been to promote and publicize both national and international actions in
defense of competition in Panama, as highlighted in its slogan, "Defending your Freedom to Compete".
On the other hand, an important aspect to highlight is that the editing and writing team of the articles published in
this bulletin are lawyers and economists who are actively working day by day within the Directorate.
We thank you in advance to be part of our readers.