Colombia

The Superintendent of Industry and Commerce is appointed by the President of Colombia. Due to a recent legal change, he doesn´t 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.

There are no political appointments at the SIC.

The total SIC’s competition-related budget for 2019 was COP$ 31,916,164,763. This budget was distributed in two main areas. The first one is the “Competition Investment Budget” which is approximately COP $20,839,217,434 (US$ 6 million) and the second one is the “Competition Functioning Budget” that is approximately COP $11,076,947,329 (US$ 3.2 million).

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

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. 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 big 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.

Law 1340 of 2009 has established the SIC as the sole authority in competition in Colombia. In recognition of that attribute, 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, by its acronym in Spanish) in the aeronautical sector

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

• The Superintendence of Finance (SFC, by its acronym in Spanish) in the financial sector

  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.

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

No, we are fully committed to the Competition Protection Regime.

Our mission is transversal to all sectors of the Colombian economy, Article 3 of Law 1340 of 2009, establishes “to ensure the observance of the provisions on protection of competition; deal with claims or complaints for facts that could imply their violation and process those that are significant to achieve in particular the following purposes: the free participation of companies in the market, consumer welfare and economic efficiency". However, we are constantly reviewing each of the markets in the economy where there may be a set of indications that could be elements to be investigated for alleged practices that limit competition. The implementation of data analytics tools shows the implementation of an intelligent mechanism for detecting violations of the regime.

The Superintendence of Industry and Commerce exercises the administrative functions (also known as powers) of inspection, surveillance and control over anyone who engages in or affects any economic activity in Colombia. The Colombian Constitutional Jurisprudence describes the inspection function as the power to request and/or verify information or documents held by entities that are subject to control of the Authority.

The activities that are a part of the SIC’s broad power of inspection are clearly limited in scope. Firstly, they must be exercised rigorously to guarantee and respect the Due Process tenets. Secondly, they must follow thoroughly the rules applicable to the administrative procedure and the provisions that regulate the gathering, request and practice of evidence by the Authority during the administrative proceedings. Thirdly, their use must be justified on their relevance and conduciveness to the verification of compliance with Competition Protection Regime. These activities or powers to investigate go from information requests and interviews to unannounced inspections.

For each violation and each offender, the companies will be fined in favour of the Superintendence up to the sum of one hundred thousand (100,000) Current Monthly Legal Minimum Wages or, if it turns out to be greater, up to 150% of the utility derived from the conduct by the offender.

Natural persons who collaborate, facilitate, authorize, execute or tolerate conduct that violates the regulations on the protection of competition will be fined up to two thousand (2,000) Monthly Legal Minimum Wages in force at the time of imposition of the sanction.

Yes, Kimberly Clark, registered in Colombia as Colombiana Kimberly Colpapel S.A., which was sanctioned by Resolution No. 31739 of May 26, 2016 by cartel in toilet paper and Resolution No. 43218 of the June 28, 2016 by cartel in diapers.

Another example, the case identified with the name "Chlorine – Soda”, Sanction Resolution No. 57600 of October 28 from 2019 where the following companies based outside Colombia participated in the cartel and were sanctioned by the Authority:

• Brinsa S.A.
• Quimpac De Colombia S.A.
• Trichem De Colombia S.A.S.
• Mexichem Derivados De Colombia

Yes. Article 14 of Law 1340 of 2009 established a leniency programme as part of Colombia’s comp etition law regime. That article is regulated by Decree 1523 of 2015, which establishes the general conditions and t he way that the SIC can award benefits to natural or legal persons who have participated as market agents or facilit ators in a restrictive agreement.

It is important to note that 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 protected]
[email protected]
Tel: +57 1 587 0000 (ext 20001)
 
According to Article 2.2.2.29.2.2 of Decree 1523 of 2015, the SIC is able to award both full and partial leniency, d epending on certain conditions. The same article establishes that full leniency will be granted to the first applica nt 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 i nvolved 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 conne ction 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 recognize the participation in the cartel.
• To provide information or useful evidence about the existence of the agreement and its operation, including a spects such as objectives, principal activities, functioning, name of the participants, level of participation, loca tion, 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 befo re the end of the 20 days given to the offender to provide or request evidence of the commission of the presumed inf raction.
 
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 al ready knows, including the information given by other applicants. The degree of exemption will depend on the order o f arrival to the programme.

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. Criminal enforcement of this conduct is pursued by the Office of the Attorney General and the final decision is made by a criminal judge.

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.

Yes, Law 1340 of 2009 (procedural provisions, leniency programme and fines) establishes individual responsibilities for both legal entities and natural persons for violating the free competition regime.

According to Article 74 of Law 1437 of 2011, there is no appeal against decisions of ministers, directors of administrative departments, superintendents, among other officials. Therefore, people do not appeal against SIC's competition decisions - there is not a second administrative instance to do so.

Final decisions of the SIC can only be challenged by reconsideration petitions, which can be presented before the same person who issued the decision (i.e. the Superintendent of Industry and Commerce).

In SIC cases, any party (including recognized third parties) is able to seek judicial review before the Administrative Tribunals through the action of “Declaration of Nullity and Restoration of Rights”.

Additionally, as a matter of constitutional law, a party (or any other affected person) may immediately seek a judicial writ (Acción de Tutela, or “tutela”) against an agency’s act or omission that violates or threatens to violate the petitioner’s fundamental constitutional rights, if effective protection of the right would be prejudiced by awaiting resolution of the underlying case.

Civil actions only proceed when the decisions made by the competition authority are final and have been ratified by the Council of State or the respective Court. They are independent actions within the reach of the competition authority.

• Decree 2153 of 1992, Article 49. Exceptions. For the fulfillment of the functions referred to in the article of this Decree, the following conducts will not be considered as contrary to free competition:
  1. Those whose objective is cooperation in research and development of new technology.
  2. Agreements on compliance with norms, standards and measures not adopted as mandatory by the competent body when they do not limit the entry of competitors to the market.
  3. Those that refer to procedures, methods, systems and forms of use of common facilities.

• Law 155 of 1959, Article 1. The Government, however, may authorize the conclusion of agreements or conventions that, despite limiting free competition, are intended to defend the stability of a basic sector of the production of goods or services of interest to the general economy.

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 Ginette Lozano Maturana, whose contact information has been listed above.

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

The objective assumption can be met in 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 of 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 involved markets, the transaction must be reviewed by the SIC.

Yes. In recent years, the SIC has conditioned an average of 2 merger operations per year. The most recent instances for such decisions are the following:

Not for now.