Argentina: Overview

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10th Anniversary of the new Argentine Antitrust Law

The Argentine legal system has always been influenced by that of the United States and Western European countries. During the 19th century Argentina, like many other Latin American countries, traced its legal background to the tradition of European Civil Law. However, during the second half of the 19th century, the country followed the constitutional model of the United States, in which certain matters are specifically delegated to the federal government while other matters are kept reserved for the local provinces.1This European and United States legal influences could also explain the evolution of antitrust in Argentina.

Argentina has regulated illegal competition practices for roughly 100 years, but the most recent legislation has been created to better deal with concentrations and collusive practices in the country.

During the early 1980s Argentina adopted Law 22,262, which mimicked some European concepts of competition law in the Treaty of Rome. Law 22,262 made violations of Competition Law a criminal offence that would be tried before a criminal court.

Almost 20 years later, Law 22,262 was replaced by the current Argentine Competition Law 25,156 (ACL), which became the main regulation over competition issues in Argentina after the 1994 amendment of the Argentine Constitution (AC).

One decade has passed since the enforcement of the ACL. It emerged during the 1990s as a way of facing the new economic and political changes the country was going through as a result of a trend of market-orientated reforms within the framework of the economic deregulation, the privatisation of state-owned companies and fixed exchange rates that the country underwent during the Menem administration (1989-99). The subject matter of the ACL was to give the government an effective instrument to look after the general economic interest, a concept that has been generally used to make reference to the total surplus of the economic agents.2

1994's Constitutional reform was one of the main aspects that influenced the enactment of the ACL. Article 42 of the AC establishes the right to effective competition that was incorporated by the ACL in 1999:

The Federal Authorities shall provide for the defence of competition against any kind of market distortions, the control of natural and legal monopolies, the control of quality and efficiency of public services and the creation of consumer and user associations. The legislation shall set forth efficient procedures to prevent and resolve conflicts.3

Law 25,156 not only eliminated the criminal charges among those sanctions against violation of the law stipulated by the prior law but also called for a new judicial body to oversee antitrust issues: The National Tribunal for the Defence of Competition (TDC).

Article 17 of the ACL commanded the development of the TDC as an independent court with the faculties to decide on the subject matter. The TDC was meant to replace the National Commission for the Defence of Competition (CNDC), an administrative body created by Law 22,262. Since the TDC has not yet been created, the CNDC is currently responsible for the enforcement of the ACL.4

Additionally, the ACL created new regulations and procedures regarding mergers and acquisitions conducted in the country.

There should be a distinction between two different areas of regulation by the ACL: the regulation of agreements and concerned practices (including the abuse of dominant position), and the analysis of economic concentration and mergers.

Illegal practices are defined in article 1 of the ACL, as follows:

Any act or conduct related to the production or trade of goods and services aiming at or having the effect of limiting, restricting or distorting competition or access to the market or constituting abuse of dominant position in a market, in a manner that may be prejudicial to the general economic interest, is prohibited and will be sanctioned in accordance with this law.

There are several ways of bringing claims against competition before the CNDC:

• through a complaint (which could be filed by a third party);

• requested by the Secretariat of Commerce; or

• by request of the CNDC itself.

The most common method is through a complaint. The CNDC shall review the complaint and, if valid, will give the respondent 10 days to provide the appropriate explanations.5The respondent shall have up to 90 days in order to produce evidence for their case. After the evidence has been filed, the CNDC shall determine whether there was a breach of the ACL.

The ACL also prohibits corporations from abusing their dominant position within the market.6Article 5 defines the factors to be considered at the time of determining if a corporation has a dominant position:

• the extent to which the product traded could be substituted by another product and the conditions and time period required for such substitution to take place;

• the existence of legal barriers that limit access to a certain product or that of new competitors in the market and,

• the power to unilaterally fix prices or restrict output or market demand and the ability of competitors to challenge these actions.

Regarding merger control, article 7 of the ACL provides that Economic concentrations that have the purpose or effect of, or that may result in, restrictions or distortion of competition in a manner which may be prejudicial to the general economic interest are prohibited.

Article 8 sets forth the obligation to notify the CNDC of an economic concentration if the total turnover amount in Argentina exceeds 200 million Argentine pesos. In order to determine whether the threshold turnover amount is reached, the total turnover amount of the purchaser (including its affiliates) is added to the turnover amount of the targeted business acquired.

On the other hand, there are some exceptions to the obligation of notifying the CNDC, provided by ACL's article 10, which states that a company shall be exempted from notification when:

• the purchaser already holds more than 50 per cent of the shares of the acquired company;

• the acquisition comprises bonds, debentures, certificates of indebtedness or shares without voting rights;

• the acquisition is that of a business under liquidation, which has not conducted business for at least one year; or

• the amount of the transaction or the assets acquired does not exceed 20 million pesos.

Moreover, during the two years following the enactment of the ACL, another exception was incorporated in an attempt to reduce the number of filings brought to the CNDC. Under said exception, the company will be required to notify the CNDC if the total combined amount of purchases or assets acquired over the course of the year exceeds 20 million pesos, or if said amount exceeds 60 million pesos looking backwards to the precedent three years.

After this initial notification, the CNDC shall approve or reject the transaction or again request more specific information from the parties.

In accordance with article 8 of the ACL, a company must notify the CNDC of a merger within one week from the occurrence of the following events:

• the conclusion of the merger agreement,

• the publication of a purchase or an exchange offer, or

• the acquisition of a controlling interest in a company.

The mandatory step of notifying mergers and acquisitions has been set forth under the Hart-Scott-Rodino Antitrust Improvements Act in 1978, adopted by the European Union in September 1990. The ACL attached such importance to this notification step that it subjects the effects of the transaction to the compliance thereof. Executed acts shall not be valid until the notifying procedure is completed.7

To comply with the notification stipulated by article 8, the company must fill in a standardised form, known as Form F1, which is compulsory to all merger cases and which shall include information about the parties involved in the transaction, an explanation of the merger (including the products and services involved), an analysis and a description of the markets in which the parties participate, details of substitute products or services available, and information on whether the parties have been investigated for anti-competitive practices.8

To round off, the ACL among other reforms:

• introduced the merger control in compliance with the antitrust legislation in force in most of the countries around the world;

• eliminated criminal charges among the sanctions for violation of the law;

• created a new administrative agency, namely the National Tribunal for the Defence of Competition (TDC); and

• replaced the court which shall review the decisions rendered by the administrative agency.


Conduct Cases

In its jurisdiction over acts which aim at or have the effect of limiting, restricting or distorting competition or access to the market, the CNDC investigated horizontal agreements (eg fixing prices or output), vertical practices (eg tying and exclusive dealings), and certain firm conducts (eg obstructing the entrance to or excluding others from the market).

Between 1999 and 2008, the CNDC resolved 194 cases regarding anti-competitive practices, of which only 21 ended up subject to the application of fines.

In the last 10 years, the fines imposed by the CNDC totalled approximately 473.7 million Argentine pesos.

One of the highest fines that has ever been imposed by the CNDC was that of 109,784,000 Argentine pesos imposed on YPF, a company dedicated to the exploration and exploitation of hydrocarbons, when it was found responsible of holding a dominant position due to several factors:

• YPF participated in approximately 50 per cent of the total production of gas in the country;

• competitors held relatively minor percentages of the total production of gas in the country, and failed to expand toward new clients;

• YPF was the main price-setter in the country; and

• the relevant market was not challengeable by imports due to significant barriers that prevented the latter from entering the market.9

In order to calculate the amount of the fine, the CNDC estimated YPF's illegal profits during the relevant period to be 91,370,000 and imposed a fine on the company of 120 per cent of such amount.10

In July 2005, the CNDC imposed a total fine of 275,129,289 Argentine pesos to the sixth largest concrete producers in Argentina (the Companies).11 The Companies were alleged to have engaged in a nationwide market allocation scheme for a 20-year period. The illegal practices under investigation included the distribution of market quotas, agreements to prevent the entry of new competitors, different price arrangements and exchange of confidential information.

At that same time, the CNDC decided on a case involving liquid oxygen. The relevant market was liquid and gas oxygen used for medical purposes. The claim was brought to investigation by the CNDC itself for price fixing and collusive conducts that took place between 1997 and 2002. During the course of the investigation, the CNDC addressed the issues of horizontal cartels, concentrated markets and high entrance barriers. The companies under investigation were fined a total of 24.3 million Argentine pesos.12

Mergers and acquisitions control

The CNDC has been very active in enforcing the ACL provisions concerning economic concentrations. After 10 years of the enforcement of the ACL, the CNDC has analysed 511 cases. Of those transactions 479 were approved, while 27 cases were approved with conditions and five cases were denied approval.13


One of the most important cases since the enforcement of the ACL is related to the media market. In 2006, Grupo Clarín SA, the main media company in Argentina, acquired a majority (60 per cent) of Cablevisión14stocks. Cablevisión merged with Multicanal, the second largest operator of paid television in Argentina, through a series of stock acquisitions and corporate restructuring. As a result of these transactions, the two leading companies in the pay-TV and internet markets would gain control of the fibre optic market, the fastest-growing consumer service in recent years. After investigation, the CNDC approved the merger, since they found that it was the natural result of changes within the industry and they understood it was an efficient concentration within the internet and television industries. Further, the CNDC found that this concentration would not restrict entry into the market and would provide better services to consumers. In order to ensure fair competition in the involved market, the purchaser promised to make quarterly presentations to the CNDC during the two years following the transaction, under which they committed themselves to ensure free availability of their exclusively owned signals to third parties, slots in their television line-up for non-integrated signals, and diversity and freedom of options in entertainment and sports programming.

Health care

Regarding the health-care market, one of the most important cases in the last few years was the acquisition of Consolidar Salud, a company owned by the group Banco Bilbao Vizcaya Argentaria SA (BBVA), by Omint, one of the major health-care companies in Argentina with affiliates in Uruguay and Brazil. The transaction was approved by the CNDC in September 2009. After the transaction was performed Omint became Argentina's third-largest health-care services company.

Oil and Gas

A relevant transaction in the field of oil and gas was the purchase of Petro Andina assets in Argentina by Pluspetrol,15an Argentine company dedicated to the exploration and exploitation of oil and gas. After the transaction, Pluspetrol positioned itself among the leading oil and gas companies in the country, behind Repsol-YPF, Pan American Energy and Chevron. This acquisition was originated in a hostile offer made to shareholders in Canada and under the terms of said offer the time was of the essence. The transaction stands out from others for being approved in only three months, record time for the CNDC.


One of the cases that caused more controversy in the last 10 years was the acquisition of Telecom Argentina, a subsidiary of Telecom Italia SpA, by Telefonica SA (Spain), parent company of Telefónica SA (Argentina). During its investigation, the CNDC prohibited the acquiring parties from exercising their voting rights in the acquired company. The parties appealed this resolution. The CNDC then revoked all decisions made by the boards and committees of the merged companies and, substituted the newly appointed Board of Directors with the board existing before the transaction. However, on appeal, the Federal Court ruled that the CNDC does not have jurisdiction to make resolutions that interfere with the administrative and decision making processes of a business.

This case provided an example of the limits of the CNDC's jurisdiction over the enforcement of the ACL. Further, it showed how the courts have undermined the effectiveness of the CNDC, for better or worse. Currently, the exact power and capacity of the CNDC to accurately monitor and supervise illegal business activities within Argentina remains an important issue.

However, even though the TDC is still not constituted as a court in fact, the CNDC continues to be the administrative body in charge of enforcing the ACL and regulating fair competition within all markets.


The 10th anniversary of the new antitrust law 25,156 finds the CNDC still acting on behalf of the TDC yet to be put in place. As indicated above, this 10-year period show a limited number of significant conduct enforcement cases and certain controversies in merger control analysis.


. Miguel Angel De Dios, 'Antitrust in Developing Countries: a report on Argentina', Southwestern Journal of Law and Trade in the Americas, vol XIV, No. 1, 2007.

. Nevertheless, 'general economic interest' is a deliberately vague concept, the CNDC understood, from an economic standpoint, pursuing economic efficiency. However, recent Supreme Court cases have indicated that certain precision shall be found in advancing consumer surplus and general welfare.

. Argentine Constitution, article 42.

. See Law No. 25156 article 58, 16 September 1999.

. See Law No. 25156 article 29, 16 September 1999.

. See Law No. 25156, article 3, 16 September 1999.

. Murzueta, Francisco. Comentarios a la nueva Ley de Defensa de la Competencia. ED-T.187, p.1222.

. Reg. 40/2001, Annex 1, Section G, 22 February 2001.

. Yacimientos Petrolíferos Fiscales, CNDC Res. (22 March 1999).

. Before currency devaluation. In the future no fine will probably reach those figures in Argentina.

. Loma Negra CIASA, Cementos Avellaneda SA, Cemento San Martín SA, Juan Minetti SA, Petroquímica Comodoro Rivadavia SA and Asociación de Fabricantes de Cemento Portland (AFCP).

. CNDC Res. 510 (8 July 2005).

. See Miguel del Pino, 'Dez Annos de Nova Lei da Defesa da Concurrencia na Argentina', IBRAC, Volume 16, N. 2 (2009).

. At the time of the notification Cablevision SA was the largest operator of paid TV in Argentina. We were the counsel of records representing the merging parties. Two years after approval was granted, the CNDC has challenged the concentration based on the alleged non-compliance by the merging companies of certain commitments granted by them at the time of approving the concentration by the CNDC. Said challenge is being revised by the appellate courts.

. We represented Pluspetrol for the merger control filing before the CNDC.

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