By Arthur & Castillo (info@aclaw.com)

 

The protection for the efficient commercial competition among economic agents in the Dominican Republic (DR), is governed under the Competition Law 42-08, enacted by the Executive Branch on January 8th of 2008.

The aim of Competition Law 42-08 is to promote and protect the effective competition among the economic agents by increasing the economic efficiency in the goods and services markets in order to generate benefits and value in favour of consumers and users of those goods and services within the Dominican Republic.

For the purpose of overseeing the provisions established by Law 42-08, the National Commission for the Defence of the Competition (Pro-Competencia) was created. The objective of Pro-Competencia is to establish the policies, regulation and norms for the appropriate execution and application of the Competition Law 42-08 and also to serve as the sole authority in the matter of competition.

The provisions established by the Competition Law 42-08 are applicable to any economic agent, whether individuals or legal persons belonging or not to the public and private sector, being national or foreign, that carry out economic activities within the DR.

Additionally, the provisions of Law 42-08 are also applicable to the following:

  • Agreements, acts or conducts, including the one derived from a dominant position which its origins are in another country and their effects affect the local industry;
  • Acts, contracts and administrative conditions that restricts competition.

Accords, Decisions and Practices against the free competition

Pursuant Law 42-08, it is prohibited between economic agent competitors to undertake practices, acts, agreements and accords with the objective or causing or may cause the effect of imposing unjustified barriers in the market.

Within the concerted practices and anti-competition agreement are the following:

  • Accord prices, discounts, surcharges, other conditions of sale and the exchange of information that contains the same object and effect;
  • Act in concert or co-ordinate offers or the abstention of tenders, concourses, and public tenders;
  • Divide up, distribute or assign sections or parts of a market of goods and services assigning time or determined space, providers and clients;
  • Limiting the production, distribution or trading of goods; or rendering and/or frequency of services, notwithstanding the nature of them;
  • Eliminate competitors from the market or limit their access to it, from its positions of buyers or sellers of determined products.

Abuse of the Dominant Position

Dominant positions or monopoly when is undertook against the free competition in the market is prohibited pursuant the provisions established by Law 42-08. In this sense, the following conducts are considered to be abuses of the Dominant position:

  • Subordinating a sale to making a buyer refrain from purchasing or distributing competitors’ products or services;
  • Imposing to providers, prices and other conditions of sale to their retailers, without valid commercial reasons;
  • The sale or transaction subject to the condition of not contracting services or goods produced by a third party,
  • The sale or other conditioned transaction to acquire another good or services, different from the principal; etc.

It is under the responsibility of Pro-Competencia, to determine or not if in a case has occurred a dominant position that is affecting a particular market.

Anti-Competitive behavior

According to the Competition Law 42-08, it is considered unfair, illicit and prohibited, any act or behavior undertook within the commercial or business sphere that resulted against the good faith and commercial ethic with the objective of illegitimately divert the consumers demand.

Among the acts that are within an anti-competitive behavior pursuant Law 42-08, are: Acts of deception; Acts of confusion; Acts of undue comparisons; Imitation Acts; Acts in breaching of trade secrets; Acts of disparaging;

Law 42-08 has established that in case of anti-competitive conducts, the concerned or affected party may raise its claim directly before the corresponding Courts at the defendant’s domicile instead of taking the administrative procedure provided which is before Pro-Competencia.

Administrative Procedure under Law 42-08

Pro-Competencia is the sole entity in charge of determining the future of claims and issues arising from the application of Law 42-02, including any other legislation on the matter. The executive body of the commission may initiate investigation at the formal request raised by a legitimate concerned person.

Any complaint shall be made in written form before Pro-Competencia, and the interested person should indicate the responsible party and describe in what the practice or breaching consist on. Pro- Competencia within the term of thirty (30) days will decide whether the claim has grounds or not for initiating investigations.

In case that Pro-Competencia believes that the case has the sufficient grounds, it will issue a resolution in which it will be ordering the initiation of investigation to be notified to the parties within the term of three (3) days.

The decisions taken by Pro-Competencia are subject to administrative recourses before Administrative Courts.

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Questions about this information can be directed to Our Team  (info@aclaw.com).

This AC Law Publication is for informational purposes only and is not intended to be construed or used as general legal advice. Any transaction related to any of the described aspects shall require adequate legal assistance in the appropriate jurisdiction. Arthur & Castillo. © 2017. All rights reserved.