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Published by ACODECO, 2019-05-31 12:16:58

Bulletin No. 20 - Free Competition

Bulletin No. 20 - Free Competition

Edition Nº 20
May, 2019

Present ...........3
Our Contributors ...........2 Second Instance Judgment
Rules that hinder the Civil Aviation Authority UNCAP Case

Numbers ...........9
Credit Cards



free competition


Defending your freedom to compete


Rules that hinder the Competition

By: Joancy Chávez

Head of Competition Research

There are different difficulties or barriers in the market that potential companies or those that are active may face.
There are entry barriers that represent an obstacle to the development of a commercial activity, such as those related
to high initial investment, distribution channels or lack of experience, but there are also regulatory or legal barriers. In
general, all these difficulties refer to the obstacles that companies may face in their operations.

Regulatory or legal-type barriers are generally considered barriers to entry that can hinder free competition and
economic competition insofar as they prevent the creation of new businesses, hinder innovation or in some way restrict
and interfere unnecessarily, in the efficient functioning of the goods and services markets.

That is why it is necessary to have rules that are not an obstacle to competition, it is everyone's duty to contribute to
minimize the anti-competitive restrictions that some regulatory frameworks can generate, not only because they harm
the strengthening and development of companies, but because having a Adequate and efficient competition
environment generates great benefits for consumers and the economic growth of the country.

In this sense, the National Directorate of Free Competition with the main objective of promoting and disseminating
national and international initiatives carried out on this matter, invites the general population to report those regulations
such as laws, bills, decrees , regulations in general at national or municipal level that consider generate restrictions to
the competition since the objective is to detect, guide and correct, if necessary, the risks that the legal restrictions can
cause to the competition.

Did you know:
That economic regulations oriented to defend and promote competition in
general, contributes to the e cient functioning of the markets.

Nevertheless, economic regulations can also impose unjusti ed barriers
towards free competition when:

It limits or impedes access to markets
It makes competition on equal conditions more di cult.

Eliminating competition

barriers generate
BENEFITS: Promotes Generates
innovation growth Impulse new Attracts investments

Do you know any norm that diminishes competition in Panama?


Second Instance Judgment UNCAP Case
The Third Superior Court of Justice of the First Judicial District of Panama, by
means of the Judgment dated February 13, 2019, confirms the Judgment No.
31-18 of April 9, 2018 of the Ninth Civil Circuit Court, whereby it is declared that the
RAIMUNDO H. NÚÑEZ G. have infringed article 13, numeral 1 of Law 45 of
October 31, 2007 (Law 45 of 2007), by incurring the commission of absolute monopolistic practice consisting of the act, combination,
arrangement or agreement for the purpose of arrange, agree or exchange tending to the fixing of the minimum price of customs brokerage
services in the Republic of Panama.

The statement in the appealed judgment is confirmed and the Chamber expresses that all the evidentiary baggage was able to verify the
close collaboration that existed between the economic agents investigated, competitors among themselves, who exchanged information,
regarding the price of their services, which came to materialize in the price agreement (minimum rate increase) contained in Resolution
No. 001 of February 28, 2014 of the UNCAP and communicated in local newspapers; agreement that is detrimental to the free market
competition, which allows to conclude the existence of the conduct indicated in the lawsuit, which is aimed at seeking judicial sanctions
for the commission of absolute monopolistic practices contemplated in article 13 in Law 45 of 2007.

In view of the above, the National Directorate of Free Competition (DNLC) in accordance with Article 104 of Law 45 of 2007, initiated the
procedures to impose the sanction, however, some of the defendants filed an appeal of Constitutional Rights Protection, against the
aforementioned ruling, which suspends the imposition of sanction.

Process for Relative Monopolistic Practices against
Refinería Panamá, S, de R.L.

ACODECO, in 2009, The act considered illicit, consisted of the system of quotas or
filed a judicial shifts for the dispatch of these fuels to tanker trucks, in the
proceeding against combined rack, based on the market share of each wholesale
Refinería Panamá, S. distributor that commercialized the product at the national level;
de RL (hereinafter, conduct that was used by the defendant to unreasonably establish
REFPAN) for the exclusive advantages that affected at least one participating
alleged commission of economic agent in this market, violating Law 45 of 2007, in
an illegal monopolistic response to the unilateral and unlawful act exercised by REFPAN.
practice in the liquid
fossil fuel dispatch service (light and improved diesel) , and Through the ruling of April 3, 2019, the Third Superior Court of
gasoline of 91 and 95 octane) in the cargo terminal of the former Justice of the First Judicial District of Panama, resolved the appeal
Panama Refinery, Las Minas Bay, province of Colon, in filed by REFPAN, confirming in all its parts, the judgment issued by
contravention of article 16 number 9 of Law 45 of October 31, 2007 the first instance, by means of which, the commission of an illegal
(hereinafter, Law 45 of 2007). monopolistic practice was declared to the detriment of numeral 9,
article 16 of Law 45 of 2007.
Through Judgment No. 107-15 of December 15, 2015, the Ninth
Circuit Court of the First Judicial Circuit of Panama, decreed in the In accordance with this decision, once this ruling is executed, it is
first instance, the restrictive and unlawful nature of the up to ACODECO to impose administrative sanctions for relative
monopolistic practice demanded in the relevant market defined as: monopolistic practices, with a fine of up to two hundred and fifty
" the service of dispatching liquid fossil fuels (91 and 95 octane thousand balboas (B /.250,000,00).
gasoline and light and improved diesel) to tanker trucks of
wholesale companies in the Republic of Panama ".

Merger in the Ice Market in Panama

The National Directorate of individual or collective exercise of market power, and the
Free Competition of probability of carrying out a collusive conduct, in order to determine
ACODECO, received on whether the operation will generate entry barriers into the relevant
December 11, 2018, a markets and to determine if the operation might compromise the
request for a prior effective rivalry in the relevant markets. The verification concluded
verification of the merger that the operation will not create any entry barriers and will not
through which Distribuidora compromise the effective rivalry in the relevant markets.
Petrohielo, S.A. and
Tropical Oasis, S.A. sell However, the draft contract for the sale of shares established a
100% of their shares to non-compete agreement for a maximum period of five (5) years, in
Hielo Ameglio, S.A. the geographical area of the Republic of Panama.

The operation involved the following relevant markets: ACODECO, determined that this maximum period of five (5) years,
The ice market in bags of 8 pounds of final consumption of people limited in excess the potential entry to the market of the seller in the
and households in the Republic of Panama, and the market of ice future.
in bags of 40 pounds and block ice for intermediate consumption in
the Republic of Panama. Through Resolution No. DNLC-HCE-004-19 of April 3, 2019, the
merger received a favorable concept, albeit it was conditioned to
The level of concentration of the relevant markets before and after the reduction of the duration of the non-competition agreement for
the transaction exceeded the threshold of the dominance index a maximum period of three (3) years, in the geographical scope of
established by the ACODECO of 0.25. This indicates the need to the Republic of Panama. The acquiring economic agent complied
continue with the verification analyzing both the probability of with the condition, thus raising the measure.

Merger in the Ice-cream Market

In this sense, the economic agents interested in merging, have
production and manufacturing facilities for ice cream in the
province of Panama, in turn, distribute and sell the same cohere
around the country, being competitors among themselves.

That is why the ACODECO, in accordance with the provisions of
Article 21 of Executive Decree No. 8-A of January 22, 2009, which
The National Directorate of Free Competition of ACODECO regulates Title I (Monopoly), and Resolution No. A-31- 09 of July
received on April 25, 2019, the request for a prior verification of the 16, 2009 that develops and approves the Guide of Mergers , made
merger consisting of the purchase and sale of all issued and a preliminary review of the documents and evidence provided by
outstanding shares of HELADOS LA ITALIANA, S.A., by DMPTY, the economic agents interested in merger, finding that they must
INC. clarify and provide certain documents that complement the
The merger is regulated under Article 21 of Law 45 of October 31,
2007 explaining in part that it is: "... the merger, the acquisition of For this reason, ACODECO emits the Resolution 07-19 of May 13,
control or any act by virtue of which companies, associations, 2019, requesting additional information. We are currently waiting
shares, social parties, trusts, establishments or assets in general for the information requested, in order to continue with the analysis
are grouped together among suppliers or potential suppliers, of the operation.
between clients or potential clients, and other competing economic
agents or potential competitors among themselves.".


Merger between Rodelag and Audiofoto

The Consumer Protection and Defense of Competition Authority economic concentration:
(ACODECO), initiates ex officio administrative investigation, in d) The acquisition of tangible or intangible productive assets, or
order to determine if this commercial operation could be trusts"
considered as an merger and thus specify if its effects diminish,
restrict, damage or they impede free economic competition with This determination is because the conclusion of the commercial
respect to goods or services that are equal, similar or substantially use license agreement entails an acquisition of control when it is
related, to the detriment of established norms. intended to grant long-term and over all assets, in this case, over
all the branches involved.
The existence of two commercial agreements is determined:
a) Asset purchase agreement, where Rodelag, S.A. acquires The preliminary report concludes that the merger between
control of assets of Audiofoto Internacional, S.A., the purchasing Rodelag, S.A. and Audiofoto Internacional S.A., is an operation
company remains organically intact, as a company that sold its that does not reduce, restrict, damage or impede, in an
assets no longer exists or to participate in the market. unreasonable way, free economic competition in the relevant
markets of audio products, digital cameras, televisions, air
b) Agreement of license of use of commercial denomination, with conditioners, stoves, refrigerators. , washing machines and dryers,
option to purchase, granting the exclusive and unlimited use of the microwaves, laptops, multimedia tablets, printers and
brand Audiofoto, and a No Competition Clause is established to the smartphones, since it has been determined that the market share
two and a half years that contemplates the validity of the same, of the resulting entity (5.7%) is not significant and, therefore, is not
adding five more years of competition. merits THE AUTHORITY resort to request the relevant courts a
The modality of this economic concentration is defined in point 28, deconcentration.
literal "d" of the guide for the control of economic concentrations:
Administrative file CE-004-18 of October 26, 2018 was archived.
"28. It will be understood that the following constitute operations of

ACODECO and Civil Aviation Authority Sign Collaboration Agreement

ACODECO, is part of the Central American Network of National Authorities Responsible for the
Topic of Competition (RECAC). The aim of this network is to work together with the national
authorities in charge of the competition issue, to create mechanisms to strengthen the defense
and protection of competition in the Central American markets and to contribute from the scope
of action to the integration of economic and social aspects of the region.

The RECAC has presented a proposal called "Diagnosis of competition conditions in the air
transport of passengers of the Central American region and proposed public policy of national
application derived from the diagnosis" recently this proposal was selected to receive funds
from the initiative of "Assets Regional Publics "of the Inter-American Development Bank.

For the execution of the Regional Public Good, a set of activities will be carried out
(consultancies, studies, national and regional worktables) that, due to the particularity of the topic, implies that the project is carried out
through a coordinated work with the civil aeronautical authorities of each country.

In this regard, on April 12, 2019, Oscar García Cardoze, Administrator of ACODECO and Alfredo Fonseca Mora, General Director of the
Civil Aviation Authority signed a mutual collaboration agreement, between both entities, with the objective of establishing coordination
mechanisms for consumer protection, as well as contributing to the identification of facts or conditions that limit the free economic
competition in the civil aviation sector; This agreement constitutes a commitment that will allow the achievement of important achievements
for both entities, through the exchange of information and development of suitable consultation mechanisms that are necessary for the
development and fulfillment of institutional objectives according to the competence scope of each entity.

XIX International Conference on Competition,

organized by the Bundeskartellamt, from 13 to 15 March 2019,
in the city of Berlin, Germany

ACODECO was represented at this international conference by prices to a greater focus on quality and innovation to keep markets
the General Administrator, Oscar García Cardoze and the Head of open.
Analysis and Market Studies, Jovany Morales, where knowledge
and experiences were exchanged with the heads of competition Panel III
authorities, politicians, academics , high ranking representatives of Consumers, privacy and competition: if privacy and data protection
companies and lawyers from more than 60 countries, in four should be an element of the application of competition law.
discussion panels, to address current issues of international
competition law and policy. Panel IV
The relationship between private enforcement and the
Panel I effectiveness of leniency programs in the application of the
The power of the global market on the rise - Big, bad, antitrust law. A natural conflict or two sides of the same coin?
It was point out that many jurisdictions have taken measures to
The panel discussed whether the established principles of facilitate the private application of the competition law in order to
competition law provide correct answers to current challenges. It promote the due compensation of the victims of the cartel.
was discussed whether the growing concerns about global market However, as private vigilance increases, concerns grow that this
power and global economic inequality are simply "nonconformist", good action will not go unpunished. It was reflected on what is the
and point to market concentration as something negative per se relationship between leniency and claims for private damages at
(again) and if we need more control of the structures of the market present?
as traditional operators are creating a "zone of destruction" around
themselves through the use of "embrace-extend-extinguish" Prior to the international conference, the Federal Ministry of
anticompetitive strategies. Economy and Energy participated in the workshop, tailored to the
specific needs and interests of young competition authorities, to
Panel II discuss matters of interest and exchange opinions. The topics
The invisible hand loses control. Is it necessary to rethink the addressed were: Digitization - Nuts and screws or What does it
control of abuse in the digital age? mean for me?; Promote effective application - Tools and
It was reflect on whether in the digital economy, the focus of
competition analysis tends to move from the effects of short-term



67th Spring Meeting 2019 of the ABA Antitrust Law Section

companies that incur these, but cases of digital platforms and the
experiences of several Asian and European countries reviewed. It
was conclude that the treatment is dissimilar at international level
and there are legislations such as those of USA and Panama
where it is not even clear that these cases can be seen.

Panel IV:
Recording a Podcast to Be Broadcast Online by ABA and the
Federal Trade Commission

The ACODECO Administrator Oscar García Cardoze participated
together with Pablo Trevisán (Competition Commissioner in
Argentina) and Alexandre Cordeiro (CADE General
Superintendent in Brazil), sharing the different experiences in the
implementation of leniency programs, as well as the recent
Panel I: reforms carried out in these countries, and the proposed reforms to
There is life after the Clemency Policy (compensation program modernize the competition legislation in Panama, bringing it closer
compensated) to the best international experiences (increase of fines,
transformation of ACODECO into administrative court,
The panel discussed whether it is true that there is a decline in establishment of mandatory notification for mergers).
applications to benefit from this type of programs worldwide.
Although figures for 2018 vs 2017 show a reduction in the Panel V:
European Union, it is within the normal ranges, while there is no Simulated Trial
reduction in other important jurisdictions such as the USA and
Brazil, this country being one of the most advanced in this subject There was a hypothetical case of merger between competitors,
in recent years is already considered an international reference. which involved a prior agreement not steal employees, which
affects the conditions of these workers. There were interrogations
to experts in economics, presentation of the theory of the case and
Panel II: final arguments, as well as the deliberations that the jury had.
Corporate Compliance Programs - A Changing Scenario?
Panel VI:
In this panel, they addressed issues similar to those of Panel I, but Closing Session
from a different perspective since the emphasis is on prevention
through the implementation of a Compliance program is supported It counted with the participation of the European Union
by the Top Management of the Companies. It must convey the firm Competition Commissioner (Margrete Vestagher), the president of
commitment of companies to comply with the law, of competition in the Federal Competition Commission of Mexico (COFECE), the
this case, and have several components that help achieve their president of the ACCC of Australia (Rod Sims) and the head of the
objectives: transparency, monitoring and accountability. Antitrust Division of the US Department of Justice, where they
reviewed the future challenges, the convenience of international
Panel III: convergence agreements, as well as the preparation of procedural
Abuse of Purchasing Power (Monopsony) guides that provide transparency to the agencies' actions.

In this panel we discussed about possible exploitative behaviors in
the market that some companies carry out but that do not
necessarily affect final consumers in certain markets, but rather
suppliers. In the case of Panama, the supermarkets could be the


Annual Conference of the International Competition Network 2019

ACODECO, represented by Ms. Mitzila Rodríguez, Lawyer of the Competition
Research Department, participated from May 14 to 17, 2019 at the 2019 Annual
Conference of the International Competition Network, held in Cartagena,
Colombia. The Superintendency of Industry and Commerce of Colombia (SIC)
and the International Competition Network, organized it.

The President of the Republic of Colombia Iván Duque, where issues related to
free competition were discussed, opened the conference. Topics such as
Promotion of the Framework on procedures of the Competency Authorities of the
ICN, detection and implementation of tools to combat cartels, digital economy and
innovation, experiences of Competition Authorities of Ibero-America fight against
cartels related to the digital market, innovation in advocacy of competition.

The meeting brought together more than 400 people among delegates from
competition authorities from around the world, and representatives of
non-governmental organizations.

Real Estate Fair Housing Expo

The National Directorate of Free Competition (DLNC) of the
Authority for Consumer Protection and Defense of Competition
(ACODECO), participated in Expo Vivienda 2019, one of the
largest real estate exhibitions in Panama.

The fair had personnel from the Cost Analysis Unit of the DNLC
during the four days of the day, where hundreds of consultations
of consumers and real estate developers were attended.

Also, supplies were distributed with information to publicize the
duties and rights of consumers prior to the purchase of new
housing; as well as information related to the request for prior
validation that a developer can submit before notifying an
increase in costs in the final sale price of the real estate unit.



Credit Cards

Aspects of the comparative analysis of costs, nominal annual interest rate (in%)

and annuity (in Balboas), of some credit cards and other financing cards,
issued in the Republic of Panama

The Consumer Protection and Defense of Competition Authority Financing Cards
(ACODECO), in compliance with the provisions of Law 81 of 2009,
compiles directly and through the Superintendency of Banks, the The Financing Cards are products (financial instruments) issued
information of the main costs, in the nature of sworn statement, of by some companies to provide credit facilities to their customers,
those entities dedicated to the issuance of credit cards and other in purchases made in their establishments. They present particular
financing cards in the Republic of Panama. The purpose of this characteristics that the consumer must evaluate at the moment of
data collection is to inform the consumer and / or account holder acquiring them.
about the annual nominal interest rate (%) and other additional
charges for the credit and financing cards currently offered in the For this period, the following economic agents reported
local market. information: Banco Azteca (Warehouses ELEKTRA), GRAN
MORRISON, RODELAG, Importadora Maduro, S.A. (FELIX), KEY
Credit cards Supermarkets, ROMERO Supermarkets and the Financial
Company FINANCE CREDIT, S.A. (See chart below).
In this market there is a wide variety of products, with
characteristics suited to the profile of the cardholder, so we The full report can be found at
recommend consumers who want to acquire 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.


Average Annual Nominal Interest Rates Lower and Higher, Some
Credit Cards, by Type of Card and Issuing Entity: May 2019

Highest Average Interest
Lowest Average Interest Rates
Type of card. Rates
Bank % Bank %
Visa or Mastercard Profesionales, R.L. 13.50 Banco Ficohsa
Cash Back Clásica or EDIOACC, R.L. 15.00 Panamá 28.00
Tradicional Banco Nacional de Panamá 16.00
Visa or Mastercard Coop. S/M Profesionales, R.L. 13.50 St. Georges Bank 25.85
Clásica, Esencial or Global Bank 15.99 Multibank 24.50
Standard Banco Nacional de Panamá 16.00 BAC y Banvivienda 24.00
Visa o Mastercard Banco Panamá 15.00
Empresarial, Metrobank 15.99 Towerbank 23.00
Corporativa or Capital Bank, Banconal 16.00
Visa or Mastercard EDIOACC , R.L. 13.00
Dorada, Oro or Gold Coop. S/M Profesionales, R.L. 13.50 St. Georges Bank 24.75
Banistmo 14.00
Visa or MC Coop. S/M EDIOACC, R.L. 11.50
Platino or Platinum Banco de Occidente 12.00 Banco General 24.00

Panama Free Competition Bulletin reaches its edition No. 20


free competition


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

We thank you in advance to be part of our readers.

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