Panama: Authority of Consumer Protection and Competition Defence

Panama’s Authority of Consumer Protection and Competition Defence (ACODECO) juggles multiple roles; the first is protecting the consumer, the second, defending free competition. The roles are complementary and seek a common goal, which is the consumer’s best interests.

The new administration was set up, whose focus is directed at improvements of very specific issues: transparency, efficiency and commitment, which leads to turning these objectives into viable plans that will provide the market and consumers with the certainty that all players clearly understand the rules of the game, and in turn, those entities will act in accordance with such standards.

From the perspective of free competition, the current Panamanian law provides a definite scheme of practices restricting competition, based on specific situations in which economic agents are found to be breaking the law, either through a cartel or monopolistic practices. Furthermore, Panamanian law imposes fines scheme that implies that ACODECO administratively investigates and subsequently sues before the courts, which are competent to determine the existence of monopolistic practices. Once it leaves the judicial phase, the process returns to the ACODECO to be sanctioned.

One of the actions we will continue proposing for 2016–2017 is to modify the administrative and judicial legal framework, which has led to a backlog of several court cases waiting for sentencing. In some situations, these have exceeded seven years for the first-instance ruling, and so are still awaiting the second-instance ruling before the feasibility of an appeal or even additional actions before the Supreme Court can be assessed. In terms of our goal of efficiency, this situation leaves the market in a state of helplessness, since the current applicable remedies are not appropriate or effective and are creating greater incentives to break the law.

Our proposed legislative amendment opts for an exclusively administrative system, to investigate, decide, fining and impose corrective measures in markets that are under investigation. In our opinion, this reform could significantly reduce the response time to market and remedy practices that may be causing serious harm to consumers, since ACODECO investigations have a maximum average duration of one year.

Likewise, we propose a system that gives businesses under investigation a chance to offer commitments and guarantees during the investigation, which could greatly speed up the restoration of damages.

Another issue that this administration aims to address during 2016 is the communication campaign to encourage application for the leniency programme as a legal tool to fight cartels, and for that reason we have already generated guidelines and a promotional video on that topic.

Although enshrined in our legislation for more than seven years, this measure has not yet been taken up by businesses, which leads us to assume that either it has not been sufficiently publicised or, as Panama is a very small market, there are few incentives to use it given the proximity in which economic actors coexist and will have to continue coexisting.

Our communication and promotion strategy of competition for 2016–2017 contemplates:

• continuing the dissemination of a bimonthly competition bulletin board;
• implementing an interactive prices board online in the seafood market beginning in the first quarter of 2016. Competition second quarter 2016;
• creating an application so that supermarkets share the prices with consumers when they make purchases in the third quarter of 2016;
• cooperation agreements with the main purchasing entities of the government of Panama (CSS, MEDUCA, etc) in the fourth quarter of 2016; and
• developing a corporate compliance programme by the first quarter of 2017.

Our goals to improve the effectiveness of the law enforcement in the period of 2016–2017:

• create new economic merger guidelines with a simplified procedure by the fourth quarter of 2016; and
• install an IT forensics laboratory by the fourth quarter of 2017.

At an international level, the institutional strategic plan for 2016-2017 contemplates:

• performing a new peer review of competition by the OECD/IDB in the second quarter of 2017 (the previous one was in 2010);
• being the headquarters of the Regional Competence Centre for Latin America from 2018; and
• hosting an international workshop of one of the International Competition Network (ICN) working groups before 2019.

We will redouble our efforts to strengthen market research, which has been weakened somewhat by the lack of information from the economic players as this is not required by law. We proposed a legislative modification in this regard, so these studies can be a true reflection of the situation in different sectors, which will serve as an important tool in the investigation of corrupt behaviour.

In short, we have very ambitious plans that involve radical reforms, ranging from how our investigations are to be conducted, to improving the effectiveness of market research, all of which is simply the reflection of a fully developed agency that has accumulated experience over several years and received valuable training and feedback from consultants. Now this enables us to think wisely about the best practices to be implemented in Panama and how to shorten the paths that we have already travelled.

The Authority of Consumer Protection and Competition Defence

It is a decentralised public entity of the state, with its own legal personality, autonomy in its internal regime and independence in the exercise of its functions under the Ministry of Trade and Industry. The Authority is subject to oversight by the General Comptroller of the Republic, according to the Constitution and laws.

The main objective is to protect and guarantee consumer rights and the process of free economic competition and free competition, eradicating monopolistic practices and other restrictions in the efficient functioning of markets for goods and services to preserve the interests of the consumer.

The institutional philosophy is committed to the welfare of Panamanians as consumers and producers through competitive insertion of the country into the global economy, what drives us to be proactive about transforming and changing the institutional organisation to make its management more efficient.

Within this framework of concepts and embodiments, the Authority for Consumer Protection and Defence of Competition is organised mainly into the National Direction of Free Competition and the National Direction of Consumer Protection (these are units of the organisation’s structure that report directly to the Head Office (General Administrator)), along with the support of other administrative units that make it possible to achieve corporate goals.

Mission

To actively promote and defend the rights of consumers and ensure fair competition.

View

To be recognised nationally and internationally, in promoting free markets that benefit consumers in conformity with the values of transparency, social commitment and efficiency.