Edition Nº 9
7th National Day of Free Competition
OF OUR CONTRIBUTORS «« Accused companies for PRESENT
«« Seventh National Day of Free
Competition public bidding for the purchase of
PAG. 2 nutritional cookies
«« Backpack Case
PROJECTS IN NUMBERS
«« Technical Note on the Analysis of the «« Prices of school supplies and
Duration of Judicial Proceedings uniforms from the perspective of
2 Of Our Contributors
Seventh National Day of Free
By: Harmodio A. Cedeño Espinosa
National Director of Free Competition in Charge
The first of February is a date of significant importance In this workshop, topics such as: current competition
for The Authority of Consumer Protection and law, abuse of dominant position, anti-competitive
Competition Defense (ACODECO, acronym in agreements, mergers, procedural aspects and
Spanish), in accordance with Executive Decree No. 2, competition authorities, incentives in the application
of January 12, 2011. It is on this day that the values of free competition rules, treatment towards markets
and principles of free competition are praised and of two or more sides, digital platforms, among other
proclaimed, it’s also the day in which we commemorate topics.
free competition in our country.
Colombian spokespersons and lawyers such as, Alfonso
This date has its provenance on February 1, 1996, Miranda Londoño, Carlos Uribe and Daniel Beltrán,
when the first legal instrument was promulgated in from the Centre for Competition Law Studies (CEDEC,
Panama under Law 29 of 1996, later revoked by Act acronym in Spanish) of the Pontificia Universidad
45, of October 31, 2007, which is devised to protect and Javeriana of Bogota, shared their experiences in the area
ensure the process of Free Economic Competition and of free competition and as experts on the evolution of
Free Competition, thereby eradicating monopolistic competition defense rights in Panama, made different
practices and other restrictions on the efficient analyzes of our legislation, as well as recommendations
functioning of markets for goods and services, while in order to face the new challenges regarding this issue,
preserving the consumer’s best interest, as highlighted in addition to sharing case topics ventilated within the
in Executive Decree No. 2, of 2011. sister Republic of Colombia.
In commemoration of this day, ACODECO has As our slogan says: “Defending Your Freedom to
promoted information through different social medias, Compete”,we encourage our readers to access our social
radio stations, television channels, and various networks and know more about our work, through the
publications, regarding the functions it performs in website: www.acodeco.gob .pa.
the scope of the free competition, in order keep the
economic agents and consumers increasingly aware
of the daily work being done in this directorate, as
well as organizing forums and conferences, with the
participation of national and foreign experts from
both the public and private sectors, with extensive
experience in the field of competition policy.
On this occasion, on February first and second, a
Update Workshop in Competition Defense was held
in a hotel in which international experts in the field
of competition defense attended, as well as member
of similar institutions, with the aim of refreshing
the collaborators of the National Free Competition
Directorate, specialized courts and tribunals of
commerce, and professionals who attend cases of
free competition before the ACODECO, in different
subjects related to competition defense.
Technical Note on the Analysis
of the Duration of Judicial
The ACODECO made a technical note whose objective The technical note presents statistics on the duration of
is to carry out an analysis of the duration of the judicial judicial proceedings for monopolistic practices. There
proceedings for monopolistic practices before the is a process that has lasted more than 14 years since the
courts of justice, in order to know if there is celerity in filing of the claim until the judge’s decision in the first
the final decision of the cases. instance, as is the case of the Airlines. On the other
hand, there is the case of the Breweries Companies that
In addition, it refers to judicial settlements carried has lasted more than 12 years, from the submission of
out by defendant companies and ACODECO, which the application to the first instance ruling. Currently
consists of an agreement whose purpose is to desist both cases are awaiting second-instance failure, which
from the judicial process. means that more time will elapse.
Law 45 of October 31, 2007, Article 86, numeral The judicial settlements that the defendant companies
15 empowers the Authority to cease, at any stage, and the ACODECO have carried out since 2009
the investigation carried out in the administrative have lasted a maximum of 2 years, in comparison
headquarter and to desist from the judicial process with the length of judicial proceedings. The judicial
brought before the competent authority, by carrying settlements has encourage the economic agents to
out settlements , Subject to compliance with legal cease competition restrictive behaviors in a very
requirements, provided that the economic agents short period and make a monetary contribution to the
investigated or defendant, offer commitments or national treasury.
guarantees regarding the cease or modification of
conduct for which the investigation or judicial process The complete technical note is available on our
was initiated, including criminal clauses that guarantee website: www.acodeco.gob.pa section: nuestra labor/
compliance with the agreement, in such a way that the informes técnicos.
Authority is given certainty regarding compliance with
Signing of Agreement with
the Attorney General’s Office
to prevent collusion in state
Establishing coordination mechanisms that For its part, the Office of the Public Prosecutor
contribute to promoting, protecting and undertakes to send to ACODECO, the result of
guaranteeing free competition, eradicating anti- any public act deemed to violate Law 45 of 2007,
competitive practices and increasing consumer being an example of them, but not limited to, equal
welfare, as well as contributing to effective prices in the offers (collusion), prices that reflect
supervision of public tenders and services are the a pattern of behavior, repeated purchases of the
main objectives that ACODECO and the Office same product or service, suppression of offers or
of the Attorney General of the Administration not, delivery of some basic requirements in the
agree to exercise in common, following the proposals, independent suppliers that participate in
signing of a cooperation agreement. the homologation meeting and subsequently offer
as a consortium between other indicators.
It should be noted that the agreement also
emphasizes that ACODECO undertakes to The Agreement is valid for three years and it is
review the specifications of public acts, after beneficial for governmental entities such as the
the notification and publication in the electronic Office of the Attorney General to use these types of
portal by the Office of the Attorney General, bilateral coordination mechanisms in procurement
whose amount exceeds one million balboas (B / and contracting procedures, thus counteracting
1,000,000.00), as well as any other relevant public the possibility of collusion in contractor selection,
act of minor amounts by request, so that there is a acting in accordance with Law 45, of October 31,
greater concurrence of bidders in such contracts. 2007.
Accused companies for collusion Backpack Case
in public bidding for the purchase
of nutritional cookies On January 25th, the ordinary evidentiary hearing,
was held as part of the judicial process for a possible
ACODECO initiated an investigation of the alleged absolute monopolistic practices in the purchase of
monopolistic practices against the companies backpacks by the National Assistance Program (PAN,
PRODUCTOS ALIMENTICIOS PASCUAL, acronym in spanish).
S.A., AGRO INDUSTRIAS ALIMENTICIAS DE
VERAGUAS, S.A. And ZUELLEN, SA, consisting
of establishing, coordinating positions or abstention
in public tenders, as well as manipulating and fixing
the price of sale or purchase of goods and services
(nutritional cookies) and, in addition, distributing the
existing market by geographical areas (provinces) in
the Short Price Bids (LA, acronym in Spanish) carried
out by the Ministry of Education (MEDUCA, acronym
in Spanish), for the supply, transportation, delivery and ACODECO, presented documentary evidence, and
discharge on site of Nutritionally Improved Cookie adduced the practice of test reports and expert evidence,
corresponding to the years 2014 and 2015. which can be extended until April of this year.
After carrying out the discovery in the offices of the At the moment, the measures of recognition of the
aforementioned companies, sufficient documents content and signature of documents are being carried
and information were obtained to prove the existence out by the legal representatives of the defendant
of restrictive practices of competition, violations companies.
of numerals 1 (price fixing), 3 (market share) and
4 (Collusion in tenders) of article 13 of Law 45 of
2007, for which they proceeded to formally sue these
companies on January 25, 2017. Subsequent to the
distribution made by the Registro Único de Expediente
(RUE, Acronym in Spanish), the application was settled
in the EIGHTH CIVIL CIRCUIT COURT OF THE
FIRST JUDICIAL CIRCUIT OF PANAMA.
Merger between Compañía Merger between DMPTY, Inc.,
Panameña de Aviación S.A. and Sociedad De Alimentos De
(COPA) and UNITED Airlines, Primera, S.A.
The forensic firm MORGAN & MORGAN, acting on
behalf of DMPTY, S.A., on December 20, 2016, filed
a formal request for a verification prior to the merger
and favorable concept for the merger between its
representative and SOCIEDAD DE ALIMENTOS DE
PRIMERA, S.A. (BONLAC).
The law firm Galindo, Arias and López, acting as Once the request was received by the National Directorate
Special Appointees of COPA and the law firm Arias, of Free Competition (DNLC), a preliminary review of
Fábrega and Fábrega acting on behalf of UNITED, the documentation and / or information provided with
submitted request for a verification prior to the merger the request was carried out in accordance with article
that will result from the signing of the agreement 21 of Executive Decree No. 8-A of January 22, 2009,
called Second Amendment to the Commercial Alliance which regulates Title I (Of Monopoly), and Resolution
Agreement between COPA and UNITED. No. A-31-09 of July 16, 2009, which develops and
approves the Guide for the Control of Mergers.
ACODECO proceeded to analyze the information
provided and considered it pertinent to request the It should be noted that the company DMPTY, INC.,
companies, through Resolution No. 001-17 of January (A company belonging to the same economic group
6, 2017, complementary information and documents that owns the shareholding property of DEL MONTE
to enrich the request, in order to have a more accurate DE PANAMÁ, S.A.), and acquired SOCIEDAD DE
view of the transaction submitted for verification. ALIMENTOS DE PRIMERA, S.A., carry out common
At present, the Authority analyzes the information. activities of production and distribution of juices,
nectars and refreshing drinks with flavor to fruits.
At the moment, through various Administrative
Resolutions, the economic agents involved in the
merger have been requested to clarify the documentation
provided, by a memorial, as well as to hand over
additional information, in order to have a complete and
clear vision of the operation subject to the process of
prior verification, in accordance with the provisions of
paragraph 2, article 110 of Law 45, of 2007.
Competition Advocacy Competition Advocacy in
In compliance with all phases of the “Specialized
Training Program in Competition Defense with an As part of the training on competition advocacy
emphasis on Competition Advocacy”, a replica of issues that took place at the National Institute for
the knowledge acquired at the National Institute for the Defense of Competition and the Protection of
the Defense of Competition and the Protection of Intellectual Property (INDECOPI) School in Peru at
Intellectual Property (INDECOPI) in Lima, Peru in the end of November 2016, in which representatives
November 2016. of the Analysis and Study of the Markets Department
(DAEM) and Investigation Competition Department
(DIC) participated; On February 8, 2017 a replica of
one of the subjects discussed in this school was made
to professionals of the DNLC.
In this replica, aspects related to the relevance of
competition advocacy programs were developed as
one of the least inquisitive mechanisms available
to promote competition. We also analyzed the main
tools available to develop advocacy, as well as the
instruments required to communicate it.
In this opportunity, the training was offered to the As a complement to the replica, a practical
undergraduate students of the Law Faculty of the (hypothetical) case of competitive advocacy, related to
Universidad Latina de Panamá, who shared information the collaborative economy, was developed, allowing
related to ACODECO’s administrative faculties the attendees to implement the tools analyzed,
regarding competition, as well as competition tools generating space for discussion and exchange of
or instruments, which are: the sanctions of conduct ideas, as well as being able to share different points of
restricting free competition, and the verification of view in relation to the case presented, aspects that will
economic mergers and competition advocacy. undoubtedly result in much more robust advocacy of
competition, especially in line with the dynamics of
the markets that are held each day.
Regarding this instrument “Competition Advocacy”
students were able to understand the use and purpose
of this important tool for the competition agency in its
capability to raise awareness among the public about
the competitive functions of markets and consumers
welfare. The students were able to discuss case studies
on topics analyzed by ACODECO with a positive
impact on the population, in particular, the analysis of
the passenger transportation service through technology
platforms (Uber) that generated comments, for and
against, among the students. The important aspect of the
day was to convey the role of the institution regarding
“Competition Advocacy Workshop on Economic
Workshop” held in San Salvador, Concentrations of the
El Salvador International Competition
The ACODECO participated in the “Competition Advocacy
Network.Workshop”, held on February second and third, 2017 at the
Competition Superintendence of El Salvador, as part of the
initiative of the Federal Trade Commission (FTC) of the
United States of America.
This workshop was attended by specialists and trainers from Collaborators from the National Competition Authority of
the FTC and the Mexican Federal Competition Commission ACODECO participated on February 14 and 15 of this year
(COFECE), who provided their knowledge and experience in the Constitution Center Auditorium, in Washington D.C.
in terms of competition defense to the various competition at the International Network of Competition Workshop on
agencies in Central America, such as El Salvador, Costa Mergers organized by the Department of Justice and the
Rica and Panama. Federal Trade Commission of the United States of America.
During the workshop it was established that a written research
plan developed in the early stages of an investigation is
essential. The components of a research plan were discussed,
including: identifying known key facts and those to be
investigated, developing a legal theory of work or theories
of harm, planning the collection of facts and estimating the
time and resources needed to complete the investigation.
The main topic of the presentations were based on the We discussed the development of reliable evidence through
importance of competitive advocacy as a persuasive aspect, interviews, and documents and data request. Regarding the
and market studies aimed at economic agents and state interviews we recognized that they are an important source of
entities. evidence and various tactics and skills were explored when
interviewing different types of witnesses - friendly, neutral
Market studies are the main indicator to understand the and hostile. Suggestions were provided on the development
behavior of economic agents, in the market where they and organization of an interview scheme, using documents in
participate, therefore, it is an important task to be able to an interview, interviewing techniques, and writing interview
properly select the market object of study, the issues to be reports.
analyzed, and economic and budget priorities.
The measurement of the effectiveness in the processes of Regarding the reliability of requested evidence of documents
Advocacy was exposed, with the exchange of ideas of the and data, various requesting techniques were discussed:
participants, which allow the evaluation of the saving or the various sources of documents and data, and the types
decrease of the consumer’s expense by taking into account of documents and data to be requested. We also discussed
the Ex Post Analysis of a promotion or fall of a cartel, that how to write a document request, including “specifications”,
could bring greater expenses and in the future generate which establish what a party is required to produce; The
savings. “definitions”, which explain the key terms used in the
specifications; And “instructions,” which establish how a
Hypothetical cases and brainstorming took into account the party is expected to produce the documents.
structure and procedure that govern the countries, allowing
us to increase our knowledge in the field of Advocacy, Effective remedies and remedial proposals were also
Public Procurement, Competition Tools and issues related discussed, such as whether assets should be divested, who
to Antitrust policies or Posters, as well as ex-ante and ex- should be the appropriate buyer, what the appropriate term
post evaluation scenarios of the implementation of these for the sale is, and what post-divestment relationships may
measures. exist between the seller and the buyer of the assets.
Meeting with a European Union Competition
On February 3, at the National Directorate RECAC, as well as internal aspects such
of Free Competition, a meeting was held as the day to day work carried out by
with EvelyneAmeye, a lawyer specialized ACODECO on competition issues such
in competition issues, of the European as administrative investigations, The
Commission (Delegation of Costa Rica). problematic sectors in antitrust, mergers
Mrs. Ameye, is conducting a study on the and acquisitions, the leniency program,
aspects of competition in the framework the application of jurisdictional rules,
of the implementation of the Association feasibility consultation, judicial and
Agreement between Central America and extrajudicial settlements, fines imposed
the European Union, known by its initials to economic agents, the duration of
as ADA (acronym in Spanish). judicial proceedings and the introduction
of amendments to the law 45 of 2007
Among the aspects discussed in the proposed by the Authority.
meeting we can mention the progress of
the regional competition standard through
the Centro America Competition Network
10 In Numbers
Prices of school supplies and It is a way of contributing in the reduction of the
uniforms from the perspective information asymmetry existing between the economic
of Price Information agents and the final buyers.
and to know the list of some useful items, uniforms and
School purchases are actions that require a significant books on the exemption to payment of the 7% sales tax
amount of economic resources that can affect the family (ITBMS in Panama), exemption that is valid throughout
budget at any given time. the year. Law 17, of July 15, 1992 and Executive Decree
No. 16, of March 7, 2008, which defines the prices of
It is advisable that the student, before beginning the items exempt from ITBMS collection (7%), for example:
purchases, make an inventory of skirts, trousers, socks,
shoes, backpacks, lunch boxes, etc., to verify their state 1.-School shoes, whose cost does not exceed B / .40.00.
and know the amount of uniforms and tools that the 2.-sneakers for Physical Education, whose cost does not
student really needs. exceed B / .30.00.
3.-Belts, the value of which does not exceed B / .15.00.
When visiting the stores, you must value prices and 4.-School backpacks, the value of which does not exceed
quality; As well as going with the student or have the B / .30.00.
certainty of their measures, considering that there are 5.-Ballpoint pen, the value of which does not exceed B /
warehouses that do not accept changes (there’s no right to .1.00.
retract due to consumer’s mistake). 6.-Glue, the value of which does not exceed B / .2.00.
In the particular case of uniforms and school supplies, Below we present a chart that allows us to appreciate
the Department of Price Information and Verification lower and higher prices of uniforms and some school
DIPREV (acronym in Spanish), of The Authority supplies. It should be mentioned that the survey includes
of Consumer Protection and Competition Defense, uniforms for schools in the public sector and not for those
ACODECO (acronym in Spanish), plans and conducts in the private sector, where ACODECO makes permanent
price surveys to provide the consumer population with efforts to eradicate bad practices such as sales tied up in
the information collected related to this topic and thus uniforms and school texts, among others. In the case of
assist in the decision making at the moment of making the the tools we can comment that the market presents; that
purchases for the next school season that looms. Clear, there are great variety of suppliers with many articles of
accurate, truthful and timely information is the main tool various prices and quality.
that consumers have when deciding on the acquisition of
a particular good or service to satisfy a need.
Price Range of some uniforms and school supplies, obtained in warehouses of the city of Panama: First Week of
February of 2017.
Price Range(B/. Per Unit)
Item Size Lowes t Hig hes t
School Shirt Short Sleeve (White or Light Blue) 04-16 Price Altos
18-20 2,49 5,99
S - XL 2,99 7,99
Blue Skirt (Primary) 04-16 2,99 4,99
Blue Skirt (Secondary) 10-18 3,49 5,99
School Long Trousers (Blue) 04-18 3,99 7,99
24.95 or more
28-40 5,95 0,46
School Shoes 24-40 1,99 0,79
Plastic Pens 0,15 3,99
Pencil eraser 0,10 0,99
folder 8½ x 11 0,08
200-page wide staple stapled notebook 0,68
200-page wide slash stitched notebook 1,48
Notebook three subjects 1,25
Metal Sharpener 0,39
Plastic pencil sharpener 0,05
Range is the difference between the limit of the lowest and highest of an interval.
A Balboa is equivalent to American dollar.