Colombia: Superintendency of Industry and Commerce
Colombia
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Colombia: Superintendency of Industry and Commerce

Colombia: Superintendency of Industry and Commerce

Colombia

Colombia: from the enforcer

Address: Carrera 13 No. 27-00, 1, 3, 5, 7 and 10 Floor, Bogota, Colombia
Tel: +57 1 587 0000
Call centre: +57 1 5870000 or 592 0400
Email: [email protected]
Web: www.sic.gov.co

Contacts

Andrés Barreto González
Superintendent of Industry and Commerce
Email: [email protected]
Tel: +57 1 587 0000 (ext 10004/10005)

Juan Pablo Herrera Saavedra
Deputy Superintendent for Competition Protection
Email: [email protected]
Tel: +57 1 587 0000 (ext 20001)

Jacobo Campo Robledo
Chief Economic Adviser
Email: [email protected]
Tel: +57 1 587 0000 (ext 10010)

Cristina Rodríguez Corzo
Head of International Affairs
Email: [email protected]
Tel: +57 1 587 0000 (ext 10630)

Overview

The Superintendency of Industry and Commerce (SIC) is a technical agency attached to the Ministry of Trade, Industry and Tourism. It is organised into six principal divisions, each of them is headed by a Deputy Superintendent:

  • Competition Protection;
  • Consumer Protection;
  • Personal Data Protection;
  • Industrial Property;
  • Technical Regulation and Legal Metrology; and
  • Judicial Affairs.

Questions and answers

How long is the head of agency’s term of office?

The Superintendent of Industry and Commerce is appointed by the President of Colombia. Due to a recent legal change, he does not have a fixed term of his duties.

On the other hand, the Deputy Superintendent for Competition Protection can be either appointed or removed from his or her duties at any time by the Superintendent and he or she does not have a fixed term of office.

When is he or she due for reappointment?

Once the presidential term has finished, the newly elected president must appoint the new superintendent within three months of the date of the new President taking office.

Which posts within the organisation are political appointments?

There are no political appointments at the SIC.

What is the agency’s annual budget?

The total SIC’s competition-related budget for 2019 was 31.916,164.763 Colombian pesos. This budget was distributed in two main areas.The first one is the “Competition Investment Budget”, which is approximately 20.839’217.434 pesos and the second one is the “Competition Functioning Budget” that is approximately 11.076,947.329 pesos.

How many staff are employed by the agency?

In 2019, the SIC had a total of 619 employees and 1651 contractors, distributed across all six divisions. The Deputy Superintendency for the Protection of Competition, specifically, had a staff of 44 employees and 73 contractors at the end of the year.

To whom does the head of the agency report?

The SIC is an agency that, although attached to the Ministry of Industry, Commerce and Tourism, enjoys administrative, financial and budgetary autonomy. Therefore, it issues decisions without the approval from any superior body. The SIC’s decisions can only be reviewed by the Colombian courts.

Regarding competition investigations, it is worth clarifying that competition proceedings are divided into two main stages:

  • the investigation stage, which is conducted only by the Deputy Superintendent for Competition Protection; and
  • the decision stage, which is conducted by the Superintendent of Industry and Commerce’s office.

These phases do not represent different instances but they are parts of the same procedure. The Superintendent of Industry and Commerce is responsible for making the final decision, this means whether a sanction will be imposed or the closure of the case.

Do any industry-specific regulators have competition powers?

Law 1340 of 2009 has established the SIC as the sole authority in competition in Colombia. In recognition of that quality, article 6 of Law 1340 of 2009 gave it exclusive competence to conduct investigations and impose administrative fines.

However, according to the articles 8 and 9 of Law 1340 of 2009 two specific regulators have enforcement tools to review operations between companies belonging to two particular sectors:

  • The Civil Aeronautic Authority (Aerocivil) in the aeronautical sector; and
  • The Superintendency of Finance (SFC) in the financial sector.

Civil Aeronautic Authority
The supplemental paragraph to article 8 of Law 1340 states that Aerocivil ‘shall continue to have jurisdiction over the authorisation of all business operations between aircraft operators’ that involve ‘code-share agreements, joint service operations, charter aircraft use and aircraft exchanges’, among others.

Superintendency of Finance
Mergers that involve financial institutions under the jurisdiction of the SFC are sent to that agency by virtue of article 9 of Law 1340. This article establishes the prior notification requirements applicable to mergers and states that the SFC ‘shall study and decide upon’ mergers that exclusively involve entities subject to its control. The SFC’s jurisdiction covers banks, insurance and reinsurance companies, securities brokers, financial cooperatives, bonded warehouses, foreign exchange houses, trust companies, pension funds and similar financial institutions.

If so, how do these relate to your agency’s role?

Aerocivil does not relate to the role or to the functions of the SIC when studying operations between aircraft operators in the aeronautical sector.

Regarding mergers in the financial sector, it must be noted that before issuing a decision, the SFC is required, by article 9 of Law 1340, to ask the SIC’s opinion concerning the transaction’s competitive effects and the SIC may suggest conditions to ensure the effective preservation of competition. Although the SIC’s opinion is not binding, the SFC must explain its reasons if it chooses to reject the SIC’s advice. Besides, if only one of the participants of the merger operation is a financial institution under the jurisdiction of the SFC, the SIC maintains the faculty to conduct the administrative merger proceeding.

May politicians overrule or disregard authority’s decisions? If they have ever exercised this right, describe the most recent example.

No. Only courts have the power to overrule or disregard the SIC’s decisions, after conducting judicial review processes.

Does the law allow non-competition aims to be considered when your agency takes decisions?

No. The SIC’s decisions are fully based on the evidence that is collected by the SIC officials during the course of an investigation. This evidence will also have also been harvest and analysed by technical experts in forensic IT methods. Therefore, the SIC’s decisions do not consider subjective motivations or aims of the parties that commit illegal acts covered in the competition regime. Sanctioning powers proceed when the SIC finds that companies’ behaviour has the objective or effect of affecting competition.

Which body hears appeals against the agency’s decisions? Is there any form of judicial review beyond that mentioned above? If so, which body conducts this? Has any competition decision by the agency been overturned?

The SIC’s decisions can only be overturned by courts after a judicial review process. In a SIC case, any party (including recognised third parties) can seek judicial review before the administrative tribunals through the action of nullity.

Has the authority ever blocked a proposed merger? If yes, please provide the most recent instances.

Yes. During 2019, one proposed merger was blocked.

Has the authority ever imposed conditions on a proposed merger? If yes, please provide the most recent instances.

Yes. In 2019, two proposed mergers were authorised with conditions by the SIC.

Has the authority conducted a Phase II investigation in any of its merger filings? If yes, please provide the most recent instances.

Yes. In 2019, the SIC decided 19 Phase II investigations.

Has the authority ever pursued a company based outside your jurisdiction for a cartel offence? If yes, please provide the most recent instances.

No, the SIC has not pursued a company based outside its jurisdiction for a cartel offence or any anticompetitive practice.

Do you operate an immunity and leniency programme? Whom should potential applicants contact? What discounts are available to companies that cooperate with cartel investigations?

Yes. Article 14 of Law 1340 of 2009 established a leniency programme as part of Colombia’s competition law regime. That article is regulated by Decree 1523 of 2015, which establishes the general conditions and the way that the SIC can award benefits to natural or legal persons who have participated as market agents or facilitator in a restrictive agreement.

The instigator of an anticompetitive agreement cannot be a beneficiary of the leniency programme.

All potential applicants should contact:
Juan Pablo Herrera Saavedra
Deputy Superintendent for Competition Protection
Email: [email protected][email protected]
Tel: +57 1 587 0000 (ext 20001)

According to articles 2.2.2.29.2.2 of Decree 1523 of 2015, the SIC is able to award both full and partial leniency, depending on certain conditions. The same article establishes that full leniency will be granted to the first applicant who comes forward and to accept the following conditions:

  • the participation in a restrictive agreement; and
  • to provide, at least briefly, information about the existence of the agreement, its operation, the products involved in it and the participants.

Anyone wishing to be part of a leniency programme can do so regarding an unknown cartel by the authority or in connection with a cartel under investigation. There are also conditions to receive benefits for collaboration (article 2.2.2.29.2.6 of Decree 1523 of 2015), which are:

  • to recognise the participation in the cartel.
  • to provide information or useful evidence about the existence of the agreement and its operation, including aspects such as objectives, principal activities, functioning, name of the participants, level of participation, location, service or product involved, affected geographical area and estimated duration of the agreements informed;
  • to follow and obey the SIC’s requirements and instructions during the negotiation of the convention;
  • to finish the participation in the cartel; and
  • the opportunity to submit the application to the programme is after an investigation has been opened and before the end of the 20 days given to the offender to provide or request evidence of the commission on the presumed infraction.

Numbers 2 and 3 of article 2.2.2.29.2.2 of Decree 1523 of 2015, establish that the condition for partial leniency is providing useful information or evidence that adds significant value to the information that the Superintendence already knows.

This includes the information given by other applicants. The degree of exemption will depend on the order of arrival to the programme.

Is there a criminal enforcement track? If so, who is responsible for it? Does the authority conduct criminal investigations and prosecutions for cartel activity? If not, is there another authority in the country that does?

Since 2011, bid-rigging in Colombia has been the only antitrust behaviour with criminal consequences. It is a criminal offence punishable by imprisonment of up to 12 years, fines of up to approximately US$235,000 and disqualification for up to eight years from future procurement proceedings. Enforcement of this conduct is conducted by the Office of the Attorney General and the final decision is made by a criminal judge. So far no one has been criminally punished for cartel behaviour by the Colombian State Prosecution Office.

Regarding leniency benefits, complete amnesty is available under the SIC’s leniency programme, whereas the leniency programme applicable in criminal bid-rigging cases entails maximum reductions of a third of the imprisonment term, 40 per cent of the fine, and three years of the eight-year disqualification period for participation in public procurement proceedings. Leniency in criminal cases is available only to defendants that have earned complete amnesty under the SIC’s leniency programme.

Are there any plans to reform the competition law?

At the moment, Colombia has no plans to reform any of the competition rules.

When did the last review of the law occur?

The last review of the competition law was made with Law 1340 of 2009.

Do you have a separate economics team? If so, please give details.

Yes. In compliance with the National Development Plan, the Economic Studies Working Group (ESWG) was created in 2012. It produces studies that support the decision-making functions of the SIC, creates market reports according to the needs of the different deputy superintendence offices and prepares semi-annual studies to determine the level of competition in the markets and the existence of failures in them, among other functions. The chief of the ESWG is Jacobo Campo, whose contact information is listed above.

Has the authority conducted a dawn raid?

Yes. By virtue of numbers 62, 63 and 64 of article 1 of Decree 4886 of 2011, the SIC, without any court warrant, has, among others, the ability to:

  • request information;
  • practice all type of searches and dawn raids, including emails, computers, or any electronic device; and
  • receive testimonies under oath.

Private locations such as residences and automobiles cannot be inspected. However, mobile phones used for business purposes can be searched. The consent of the mobile phone’s owner must be given.

During preliminary inquiries, whether commenced ex officio or in response to a third-party complaint, the Deputy Superintendency for Competition Protection employs the SIC’s full array of investigative methods to determine whether there is sufficient evidence to open a formal investigation. There is no public announcement or notice to the suspected parties (this stage of the proceeding is confidential). During this phase, the division is authorised by law to collect all the evidence that is related to the facts that are subject to inquiry, to verify the facts, determine which persons were involved in the alleged competition infringement and define if the conduct would effectively constitute a restrictive practice of competition. After the formal investigation is opened, dawn raids must be announced previously by public resolution to the investigated parties.

Has the authority imposed penalties on officers or directors of companies for offences committed by the company? If yes, please provide the most recent instances.

Yes. Articles 25 and 26 of Law 1340 of 2009 state that the violation of any of the Colombian antitrust provisions, including obstructions of investigations and omissions to duly comply with SIC’s information requests, orders and instructions, will result in the imposition of administrative and pecuniary fines.

According to article 25 of Law 1340 of 2009, for legal persons, the maximum sanction is up to 100,000 statutory monthly minimum wages or if more, up to 150 per cent of the gross profit of the conduct. For natural persons, article 26 establishes that sanctions will be up to 2,000 statutory monthly minimum wages.

The provisions regarding the imposition of sanctions are the same in the event of restrictive agreements or procedural breaches. Therefore, the criteria for imposing sanctions does not change for any infringement.

The Colombia competition regimen allows the taking into account any good or bad procedural behaviour to mitigate or aggravate the fine. In accordance with article 25 of Law 1340 of 2009, the criteria to impose the sanction on legal persons are the following:

  • the impact that the behaviour has on the market;
  • the size of the affected market;
  • the benefits obtained by the offender with the behaviour;
  • the degree of participation of the offender;
  • the procedural conduct of the party under investigation;
  • the market share of the infringing company, as well as the part of its assets and its sales involved in the infringement; and
  • the assets of the offender.

On the other hand, in accordance with article 26 of Law 1340 of 2009, the criteria to graduate the sanction to natural persons are the following:

  • the persistence of the offending conduct;
  • the impact of the conduct in the market;
  • the repetition of the prohibited conduct;
  • the procedural conduct of the offender; and
  • the degree of participation of the offender.

The offender or a requested company can be subject to a sanction for procedural breaches when:

  • the requested information is provided late;
  • the provision of the information is false or incomplete;
  • some information has been destroyed;
  • refuses to provide information; or
  • lacks of notice or disclosure.

In general, when there are obstructions to the investigation by refusing, delaying or challenging the powers of the Authority to carry out investigative measures.

What are the pre-merger notification thresholds, if any, for the buyer and seller involved in a merger?

The Colombian pre-merger notification system is based on both objective and subjective assumptions.

The objective assumption can be met under one of two instances: when the merging parties (either individually or jointly) have had an operational income during the previous fiscal year that exceeded the amount of monthly minimum wages set by the SIC, or, when the parties reported an amount of total assets from the previous fiscal year that exceeds the amount of monthly minimum wages set by the SIC.

The thresholds for 2019 were defined in the SIC’s Resolution No. 93503 de 2018 (60,000 monthly minimum wages for both operational income and total assets). This threshold is applicable to the fiscal year.

There is a second threshold regarding market share. If the parties meet the objective assumption described above, but have (individually or jointly), less than a 20 per cent share in each one of the markets involved in the transaction (vertically or horizontally related – the Colombian merger regime does not review conglomerates), then the case is deemed automatically approved. This requires, however, that the parties must inform the SIC that the transaction is going to take place. If the parties have more than a 20 per cent share in one or more of the markets involved, the transaction must be reviewed by the SIC.

Are there any restrictions on investments that involve less than a majority stake in the business?

There are no restrictions on minority investments. However, a minority investment may trigger the obligation to report a merger before the SIC, if the investment enables the investor to exercise material influence (positive or negative control) on strategical decisions of the target company or business.

Are there any restrictions on investments that involve less than a majority stake in the business?

There are no restrictions on minority investments. The general criteria to trigger merger control is the acquisition of positive or negative control – material influence (or even the change from negative to positive) over the target company or business, regardless of the means (for example, majority or minority investment, joint ventures, assets acquisitions) by which it is acquired.

What discounts are available to companies that cooperate with cartel investigations?

As said, the Colombian leniency programme is regulated by Decree 1523 of 2015. As per article 2.2.2.29.2.2, the SIC is allowed to grant full amnesty for the first party to apply and who has fulfilled the following conditions:

  • it must not be the instigator (this is the person who, by serious threat or coercion, induces another person to do an anticompetitive practice, provided that such coercion or threat remains during the execution of such practice);
  • it must finish its participation in the conduct; and
  • it must preserve evidence and provides complete information relating to:
    • the identities of the other participants of the cartel;
    • the nature, duration, objectives and operations of the anticompetitive agreement;
    • and, the geographic and product or service markets affected.

Number 2 of article 2.2.2.29.2.2 of Decree 1523 of 2015 grants to the second applicant a reduction of 30 per cent up to 50 per cent of the sanction, depending on the usefulness of the information provided.

Number 3 of article 2.2.2.29.2.2 of Decree 1523 of 2015 grants the third and the rest of the applicants up until 25 per cent of a sanction reduction, depending on the usefulness of the information provided.

If the Deputy Superintendent determines that the evidence provided by the applicant is not sufficient to warrant total exemption of the fine, the applicant may withdraw the application and the evidence submitted, or request the deputy to consider the application as a petition for a reduced fine. The benefits earned by a business entity will extend to the entity’s officers, but not vice versa.

Article 2.2.2.29.4.1 of Decree 1523 of 2015 enables leniency applicants who are not the first in applying for leniency benefits to earn an additional 15 per cent reduction in their fine by disclosing the existence of a different cartel in another market.

In the same track, article 2.2.2.29.4.1 of Decree 1523 of 2015 states ‘facilitators’ may receive extra benefits when revealing the existence of a restrictive practice, different from a cartel. A facilitator is any person who collaborates, facilitates, authorises or tolerates anticompetitive practices.


Colombia: from the enforcer's competition economists

Address: Superintendency of Industry and Commerce
Carrera 13, No. 27 -00, Bogotá, DC, Colombia
Web: www.sic.gov.co

Contacts

Cristina Rodríguez Corzo
International Affairs Coordinator
Tel: +57 587 00 00 (ext. 10630)
Email: [email protected]

Questions and answers

How many economists do you employ?

The Economic Studies Working Group is composed of seven economists. The Deputy Superintendency for Competition Protection employs 39 economists (21 contractors, and 18 employees). The Deputy Superintendent for Competition Protection is one of them.

Do you have a separate economics unit?

Yes. The Superintendency of Industry and Commerce has a separate economics unit named the Economics Studies Working Group. The Economic Studies Working Group belongs to the Superintendent Office.

Do you have a chief economist?

Yes. Jacobo Alberto Campo Robledo is the chief economist ([email protected]).

To whom does the chief economist report?

To the superintendent, Andrés Barreto González.

Does the chief economist have the power to hire his or her own staff?

He has the power to hire. However, he must follow the public administration rules and procedures.

How many of your economists have a PhD in industrial economics?

We do not have any economists with a PhD.

Does the agency include a specialist economist on every case team? If not, why not?

Yes. The agency includes at least one economist in every case team.

Is the economics unit a ‘second pair of eyes’ during cases – is it one of the agency’s checks and balances? If not, why not?

When considered by the Deputy Superintendent, the Economic Studies Working Group can revise some cases regarding economics matters. However, this is not always necessary.

How much economics work is outsourced? What type of work is outsourced?

No, economic analysis is outsourced.

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