Law 42-08 applies to any economic agent, individual or legal entity, public or private, national or foreign, that carries out economic activities in the DR. It also reaches:

• Agreements, acts, or conduct, including those derived from a dominant position, that originate abroad but produce effects on the local market.
• Acts, contracts, and administrative provisions that restrict competition.

Law 42-08 contains no general ex-ante merger control regime; concentrations are reviewed, if at all, under sector-specific rules or ex post under the abuse and cartel provisions (see Mergers & Acquisitions).

II. Agreements, Decisions and Practices Against Free Competition

Law 42-08 prohibits competing economic agents from undertaking practices, acts, agreements, and accords whose object or effect is to impose unjustified barriers in the market. Concerted practices and anti-competitive agreements include the following:

• Agreeing on prices, discounts, surcharges, or other conditions of sale, and exchanging information with the same object or effect.
• Acting in concert or coordinating bids, or abstaining from tenders, competitive processes, and public procurement.
• Dividing, distributing, or allocating segments of a market of goods or services, by time, territory, suppliers, or customers.
• Limiting the production, distribution, or trading of goods, or the rendering or frequency of services, whatever their nature.
• Eliminating competitors from the market, or limiting their access to it, from positions as buyers or sellers of given products.

III. Abuse of Dominant Position

Abuse of a dominant position against free competition is prohibited by Law 42-08. The following conducts, among others, are considered abusive:

• Conditioning a sale on the buyer refraining from purchasing or distributing competitors’ products or services.
• Imposing on suppliers prices and other conditions of sale to their retailers without valid commercial reasons.
• Tying a sale or transaction to the condition of not contracting services or goods produced by a third party.
• Conditioning a sale or transaction on the acquisition of another good or service different from the principal one.

It is for Pro-Competencia to determine whether a dominant position has been abused in a particular market. Dominance itself is not unlawful; only its abuse is sanctioned.

IV. Unfair Competition

Law 42-08 declares unfair, unlawful, and prohibited any act or behavior in the commercial or business sphere contrary to good faith and commercial ethics whose object is to illegitimately divert consumer demand. Acts of unfair competition include acts of deception, acts of confusion, undue comparisons, acts of imitation, breaches of trade secrets, and acts of disparagement.

For unfair competition claims, the concerned or affected party may sue directly before the ordinary courts of the defendant’s domicile, instead of pursuing the administrative procedure before Pro-Competencia. This dual track is a deliberate feature of the law and often the faster route for purely private disputes.

V. Administrative Procedure under Law 42-08

Pro-Competencia is the entity in charge of resolving claims and issues arising from the application of Law 42-08 and related legislation. Its Executive Directorate may open an investigation ex officio or at the formal request of a legitimately interested person.

Complaints must be filed in writing before Pro-Competencia, identifying the responsible party and describing the practice or breach at issue. Within thirty (30) days, Pro-Competencia decides whether the claim provides grounds to open an investigation. If it finds sufficient grounds, it issues a resolution ordering the investigation, which is notified to the parties within three (3) days.

Decisions of Pro-Competencia are subject to judicial review before the Superior Administrative Court (Tribunal Superior Administrativo, TSA) (see Administrative Law and Dispute Resolution).

Because leniency and settlement tools are limited, early legal assessment of exposure, before responding to a Pro-Competencia information request, is the single most valuable precaution.

This publication is provided for informational purposes only and not as legal advice. Any transaction related to any of the described aspects shall require advice and be specifically consulted with the Firm in advance. © Arthur & Castillo. All Rights Reserved. Next