Chile: National Economic Prosecutor’s Office

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The National Economic Prosecutor’s Office (FNE) is working to protect consumers and to create a culture of competition in Chile through a combination of advocacy and balanced and effective enforcement of the Competition Act, DL No. 211. In 2012, the FNE enjoyed major successes before the Competition Tribunal (TDLC) and Supreme Court in various high-profile matters, including a price-fixing case against Chile’s major retail pharmacy chains.1 With fines totalling around $41 million for conduct that harmed countless Chilean consumers, the pharmacies case represents an important step in the FNE’s fight against cartels.2 Indeed, fines imposed last year in just two cartel cases were higher than the combined total since 2004, when the TDLC was created.3 The challenge facing the FNE over the next 12 months – as it enters its 50th year4 – is to continue building upon the recent successes in its enforcement and advocacy efforts.

Cartel enforcement

The top enforcement priority at the FNE is the detection and prosecution of cartels. To that end, the agency has made effective use of screening techniques to detect unlawful collusion, as evidenced by the pharmacies case. In addition, since 2009, the agency has had, as part of its anti-cartel toolkit, intrusive investigative powers (including dawn raid and wiretapping authority) and leniency.

The FNE first made use of its new investigative powers in a case currently pending before the TDLC against Chile’s three largest producers of poultry meat and their industry trade association. The complaint, filed in December 2011, alleges that the defendants colluded, for at least a decade, to reduce production output and allocate market shares, in the process causing widespread harm given the importance of poultry in the average Chilean’s diet.5 The FNE is asking the Tribunal to impose fines of $30 million on each of the producers, and $20 million on the trade association. Furthermore, the FNE is asking that the association be dissolved, due to its central role in the cartel.6 Because of the stakes involved, this case represents one of the biggest challenges facing the FNE’s litigation division, as it confronts many of Chile’s best private-sector litigators.

The agency continues investigating other potential cartel matters, and the results of these efforts will be seen during the next twelve months. The recent addition of a leniency programme has already resulted in a successful prosecution before the TDLC in the compressors case and the imposition of a $10 million fine against one of the cartel participants.7 While other applicants have come forward since leniency was introduced, the FNE recognises that challenges remain with respect to the leniency programme in Chile, as identified in a recent Presidential Commission report.8 Nevertheless, a recent study conduct by Deloitte on behalf of the FNE confirms that there is a growing awareness in the private sector regarding the agency’s effective use of the available investigative tools to combat cartels.9

Abuses of dominance

While increasingly emphasising cartel enforcement, the FNE is not ignoring abuse of dominance cases. In a small economy like Chile’s, where many important sectors are highly concentrated, enforcement in this area must remain a focus.

In April 2013, the FNE filed a complaint against Unilever Chile SA, challenging exclusionary practices in the market for laundry detergent, one of the primary mass consumption products purchased by Chilean consumers.10 The FNE alleges that Unilever –whose various detergent brands have shares of 70 per cent in the supermarket channel and 80 per cent in the ‘traditional’ distribution channel – harmed competition by adopting a series of non-linear discounts and loyalty rebates with its distributors (including awards for sales increases and share thresholds in total sales) aimed at preventing the entry or expansion of rival brands. The FNE is requesting that the TDLC impose a $20 million fine – the maximum available for non-cartel conduct – and enjoin the company from engaging in these anti-competitive practices in the future.

While the FNE is willing to litigate abuse of dominance cases when necessary, the agency increasingly has sought to resolve its competitive concerns through negotiated settlements when possible. For instance, in 2011, a dominance case against Coca-Cola bottlers in Chile was resolved when the defendants agreed to a series of behavioural modifications.11 The private and public savings resulting from this policy are significant, while competition in important markets can still be protected. Achieving the proper balance in the FNE’s enforcement efforts will continue to be a challenge going forward.

Merger enforcement

Merger review by the FNE faces certain challenges given the lack of any pre-merger notification requirement in Chile. The agency, however, has continued to seek ways to better work within these institutional restraints. In 2012, for instance, the FNE learned of a merger in the cinema industry involving the second and third largest operators in the country.12 Although the deal already had closed, the FNE nevertheless challenged the transaction before the TDLC – the first time in its history that the agency had initiated a ‘contentious’ proceeding just on the basis of a merger13 – and ultimately reached a settlement requiring divestitures in certain local markets to resolve the agency’s competitive concerns.14

More recently, the FNE reached an extrajudicial agreement with Nestlé and Pfizer in connection with Nestlé’s global acquisition of Pfizer’s infant nutrition business.15 This was the first time the FNE had reached an extrajudicial settlement in the merger context, and the agency was able to obtain TDLC approval for the agreement before the merger had been consummated in Chile, and without a ‘consultation’ having been initiated before the Tribunal.

To further the FNE’s goal of maximising its effectiveness within the current institutional restraints, the agency recently issued revised merger review guidelines. Not only do the new guidelines better reflect the substantive analysis currently followed, they also include commitments by the FNE to incentivise voluntary pre-merger notification of transactions that might raise competitive issues in Chile. These include self-imposed time periods in which the agency will review reported mergers. The challenge for the FNE over the near term is to continue strengthening the merger review process within the existing framework.


In addition to enforcement, the FNE views advocacy and education as important tools for safeguarding competition is Chile. In 2012, the agency released promotional materials regarding compliance programs, as well as the role of competition in the public sector.16 These add to the promotional materials released in prior years concerning trade associations and the public procurement process. Recent advocacy efforts have also involved assessments of Chile’s regulatory environment, including, for instance, a study of the private health sector.17

The FNE will continue with this a range of advocacy efforts over the coming year. Perhaps most importantly, the FNE is releasing new guidelines on vertical restraints following a public comment period. The agency recognises that while vertical agreements usually serve important pro-competitive functions, in certain circumstances they can be anti-competitive. The new guidelines are intended to provide economic actors, and the community in general, with better guidance regarding the criteria that will be utilised by the FNE in analysing the potential competitive risks that sometimes can arise.


The FNE’s cartel enforcement efforts are strong and have been getting stronger in recent years; the agency has become more efficient at resolving abuse of dominance matters; and it is working, within institutional limitations, to control mergers that raise competitive concerns. The challenge for the FNE this year is to continue refining the agency’s balanced approach to enforcement – prioritising those practices that are likely to cause the greatest harm to Chilean consumers, and doing so in an efficient manner – while engaging in effective advocacy efforts that deepen a culture of competition in Chile and provide guidance to the community about the agency’s actions.


  1. Sentencia No 119, FNE contra Farmacias Ahumada S.A. y Otros, TDLC Rol: C 184-08 (31 Jan. 2012) (, aff’d Supr. Ct. (7 Sept. 2012) (
  2. At the time of the unlawful conduct, the maximum available fine was 20,000 UTAs, or approximately $20 million. Fines in this amount were imposed on two of the three defendants (Salcobrand SA and Cruz Verde SA), while the third defendant (FASA) – which began cooperating with the FNE after the investigation had been initiated – paid around $1 million as part of an agreement. Id. The maximum fine for collusion was raised in 2009 to 30,000 UTAs, or about $30 million. See Art. 26, DL No 211.
  3. Sentencia No 119, Farmacias Ahumada; Sentencia No 122, FNE v Tecumseh do Brasil Ltda y Whirlpool SA, TDLC Rol: C 207-10 (14 June 2012) ( (approx. $10 million fine against Whirlpool SA). The Whirlpool matter is currently pending before the Chilean Supreme Court.
  4. The FNE was created in 1963 to investigate and prosecute anti-competitive conduct under the then-existing competition act, Law No. 13.305. An historical account of the FNE’s activities has been commissioned by the agency and will be released later in 2013 in commemoration of the fiftieth anniversary of the FNE’s founding.
  5. Requerimiento, FNE v Agrícola Agrosuper SA y Otros, TDLC Rol: C 236-11 (30 Nov. 2011) ( FNE 30 11 2011.pdf).
  6. Article 26 of the Competition Act allows the TDLC to adopt various remedies in addition to fines, including ordering the modification or dissolution of corporate entities that participated in anti-competitive conduct. Art. 26 b), DL No 211.
  7. Whirlpool SA, Sentencia No 122. While the TDLC imposed a fine on Whirlpool SA for its participation in the cartel, Tecumseh do Brasil Ltda. became the first company to meet the legal requirements established under the leniency program to be exempted from any fines.
  8. Informe de la Comisión Asesora Presidencial para la Defensa de la Libre Competencia (13 July 2012) (
  9. Informe de resultados: La percepción sobre el efecto disuasivo de las acciones de la Fiscalía Nacional Económica entre Abogados de Libre Competencia (March 2013) (
  10. Requerimiento, FNE contra Unilever Chile SA, TDLC Rol: 249-13 (4 April 2013) ( de la FNE 04-04-2013.pdf).
  11. See Resolución de Término, FNE contra Embotelladora Andina SA y Coca Cola Embonor SA, TDLC Rol: C 221-11 (22 Nov. 2011) (
  12. See Requerimiento, FNE contra Hoyts Cinemas Chile y Otros, TDLC Rol: C 240-12 (28 June 2012) ( de la FNE contra Hoyts Cinemas Chile y otros.pdf).
  13. Merger reviews by the TDLC traditionally have been handled in non-adversarial ‘consultations’ before the Tribunal.
  14. See Resolución de Término, Hoyts Cinemas Chile, TDLC Rol: C 240-12 (15 Jan. 2013) (
  15. See Resolución Art. 39 ñ), Acuerdo extrajudicial entre FNE, Nestlé Chile SA, Nestlé SA, Pfizer Chile SA y Pfizer Inc, TDLC Rol: AE 07-13 (18 April 2013) (
  16. See Competition Compliance Programs: Complying with Competition Law (June 2012) (; The Public Sector and Free Competition: Assessing its Behavior from the Competitive Perspective (June 2012) ( In addition to these documents, other advocacy materials are available on the FNE’s website (
  17. Mercado de la Salud Privada en Chile (October 2012) (

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