In Colombia, the Superintendency of Industry and Commerce (SIC) may impose fines against private and public parties for violation of the antitrust regime.1 The Law establishes the maximum value of the fines as well as a list of criteria the SIC must consider in their calculation.2 In certain recent rulings, the SIC has started to provide indications on the criteria that it will follow in the calculation of the fines.
Yet there are still a number of questions that remain unanswered regarding the methodology that the SIC uses to assess the monetary sanctions for antitrust violations in Colombia. This uncertainty is not irrelevant, particularly since the SIC has demonstrated in recent cases that it is prepared to use its statutory powers to the fullest and impose significant fines.
This article will summarise and refer to the most recent rulings from the SIC in which it has referred to the criteria that the authority may use in the calculation of the fines for antitrust violations in Colombia.
A common reference in the explanations that the SIC has included in the decisions is that the fines do not intend to be confiscatory or terminate with the activities of the undertakings involved. In line with the rulings of the Constitutional Court of Colombia on this matter, the fines imposed must be reasonable and proportionate to guarantee the rule of law.
In a couple of cases, the SIC has indicated that in calculating the fines, the SIC shall apply a cap of a 10 per cent of the turnover of the undertaking involved.
The fines on EBSA
In 2013, the SIC concluded that Boyacá energy company Empresa de Energía de Boyacá SA ESP (EBSA) had abused its dominant position in the power generation and distribution markets by foreclosing the entrance of third parties to an adjacent market and for trying to increase its market shares in such adjacent market. Consequently, it imposed on EBSA and its legal representative fines equivalent to approximately US$2.4 millions and US$25,000, respectively.
At the time of the ruling, the value of the fine against EBSA was the highest ever imposed by the SIC since prior to 2013 the fines imposed reflected the old statute.
However, the decision left open some questions as to which was the weight that each criterion in the Law had in the calculation of the fines. Furthermore, the decision of the SIC declared that the profit obtained by EBSA from the activities in the adjacent market during a term of three years was of approximately US$90,000 but failed to explain what was the proportionality of the fine in relation to the impact of the conducts in the market or the profit of the EBSA resulting from the conduct.
The fines on Claro (formerly Comcel)
After the SIC imposed fines on EBSA, the agency announced in September 2013 a record fine against mobile phone carrier Claro for market foreclosure and alteration of data to manipulate market statistics in the mobile phone market. The value of the fine was approximately US$46 million at the time it was imposed, demonstrating that the SIC was unafraid to use its powers. In the decision, the SIC stated that the combined value of the fines was intended to penalise Claro for incurring in abuse of its dominance by foreclosing the access of third parties to the mobile phone carriers and for artificially reporting data to the market. The SIC in fact distinguished between the value of the fines imposed to Claro for each one of the two different violations.
The value of the fine in this case was a minor percentage of the value of the turnover of the entity subject to the fines (ie, Claro). In this case, another important factor in determining the fines according to the SIC was the clear intention to manipulate market data so as to obstruct the free migration of users between carriers.
Fines against the EAAB
The SIC imposed the highest fine ever to Bogotá water company Empresa de Acueducto y Alcantarillado de Bogota (EAAB) and other companies for entering into an agreement to foreclose the entrance to three of the potential four participants in the market.
In this case, the SIC explained in more detail the criteria that it took into account when imposing the fines. In calculating the value of the fine, the SIC explained that it considered aspects such as:
- the percentage of participants that were effectively excluded from the market of garbage collection services;
- the public nature of the services in the affected market and the impact to the community; and
- the size and importance of the market affected (ie, Bogotá is the biggest market of this nature in Colombia).
The behaviour of the parties during the administrative visits of the SIC was another factor in the determination of the value of the fine. The assets, equity and financial information of the parties involved were also important factors in the calculation of the fines.
The EAAB received the maximum fine (ie, 100,000 minimum legal monthly salaries – equivalent to approximately US$32.5 million). The other two parties were imposed fines equivalent to 27.32 per cent and 3.6 per cent of the maximum fine respectively.
The representatives of the parties involved were subject to personal fines. The maximum fine was levied on Bogotá’s mayor for the equivalent of approximately US$216,000.
An important ingredient in the deterrent effect of the fines in the control of anti-competitive behaviour is the clarity and transparency of the methodology to calculate them. Although the recent rulings have allowed parties to better understand the criteria for the graduation of the fines that the SIC may impose for antitrust violations in Colombia, many aspects of the policy for the calculation of the fines remain uncertain. The SIC has recently started to include an explanation on how the calculations were made. This is a plausible exercise.
- According to the Statute, the SIC can impose fines against each party in violation of the antitrust laws which can be as high as €25.3 million (approximately, under current exchange rates). The Regulator can also impose fines against individuals responsible, which can currently be as high as approximately €505,000
- Law 1340 establishes that for the purpose of determining the value of the fine, the SIC will consider the following criteria:
the impact that behavior has on the market;
the size of the relevant market;
the benefit to the offender’s conduct;
the degree of participation involved;
the procedural conduct of the party under investigation;
the market share of the infringing party, and the percentage of its assets or sales involved in the
the equity of the offender.