practices, and; (v) establishes the State's
duty to reduce distorted intermediation
and ensure market transparency and
efficiency, while fostering competition in
equal conditions and opportunities, which
are to be defined in the law.
legislature approved the Organic Law of
Market Power Control and Regulation
(LCPM, for its acronym in Spanish), en-
acted on October 13th this year. In line
with the current Constitution, the LCPM
prohibits abuse of dominant position or
market power, abuse of dominant posi-
tion in situations of economic depen-
dence, cartelization and unfair competi-
tion practices. It establishes an ex ante
notification system for the authorization
and control of economic concentration
operations; and provides for a scheme of
action of State and State aid. The LCPM
creates a single competition authority for
enforcing the law, with competence on all
economic sectors, a governmental body
with regulatory powers, and a procedural
and sanction framework for judging for-
bidden conducts as well as the offenses
listed in the law.
The application of the LCPM is
subject to the principles of nondiscrimi-
nation, transparency, proportionality and
due process. Prohibited conducts will
be judged on the basis of the principle
of rule of reason. For restrictive agree-
ments, the LCPM includes an exemption
for efficiency and the de minimis rule.
Furthermore, the LCPM will be applied
subject to the primacy of reality prin-
ciple. The LCPM applies to all economic
agents, understood as any person, wheth-
er natural or legal, public or private,
national or foreign, for profit or nonprofit,
currently or potentially doing business
in all or part of national territory, their
associations, and anyone carrying out
economic activities outside the country,
when their acts, activities or agreements
produce or may bear detrimental effects
on the domestic market.
concentration operations applies to
any integration or take over processes,
whether vertical or horizontal, at the
same or different relevant markets. The
application authority has the power to
reject, condition or authorize an opera-
tion that has been reported. Efficiency
gains are taken into account when
assessing potentially restrictive concen-
tration operations.
The State may define deliberate
restraints on competition in specific
cases, under conditions of copulative
compliance and for reasons of public
interest. Furthermore, State aides may be
granted in specific cases on a temporary
and exceptional basis. The application
authority has the power to oversee
compliance with the conditions justify-
ing the establishment of competition
restraints or the granting of State aids.
Sanctioning procedures may be
started ex officio or as a result of a
denunciation. Such procedures comprise
a denunciation admission stage, an
investigative and evidentiary stage, and
a stage for providing arguments and
settling the case. The competition
authority may implement precaution-
ary measures before, during or after the
procedure. The competition authority's
ruling may be appealed at the adminis-
trative or court level, without entailing
the suspension of the ruling, unless a
bond equal to 50 percent of the sanction
is provided. Sanctions may run up to 8,
10 or 12 percent of the agent's turnover,
depending on the character of the
offense. Certain sanctions are placed on
directors and managers. The authority
may apply coercive fines and correc-
tive measures, including structural and
behavioral remedies. Sanctions will be
applied in light of attenuating and ag-
gravating circumstances. The authority
may grant clemency and accept cessation
agreements. Cessation agreements do not
imply the removal of a sanction, unless
the market has not suffered adverse
effects for this reason. Within five years
from the final administrative ruling, the
accusing party may sue the offender
for damages at civil courts, following
common civil law rules.