Approval of the Regulation for the Implementation of the Leniency Program under the Competition Defense Law
Competition & Antitrust department report | Approval of the Regulation for the Implementation of the Leniency Program under the Competition Defense Law
Through Resolution 98/2024 (RESOL-2024-98-APN-SIYC#MEC), the Secretariat of Industry and Commerce of the Ministry of Economy approved the Regulation for the Implementation of the Leniency Program elaborated by the National Commission for the Defense of Competition (“CNDC”).
The Leniency Program (the “Program”) is a mechanism provided for in Chapter VIII of Law 27,442 on Defense of Competition (“LDC”) that allows natural or legal persons who have participated in anticompetitive agreements prohibited by said regulations (that is, in practices commonly known as hard-core cartels – agreements to fix prices, restrict supply, divide the market, or coordinate positions in tenders, contests, or auctions) to access a reduction or even exemption from sanctions for their participation in such conduct if they report these practices and collaborate with the CNDC in the investigation of such conduct, providing relevant information for it.
This new regulation provides further details regarding the stages, procedure, and requirements that a natural or legal person who has incurred, or is incurring, one of the behaviors listed in Article 2 of the LDC must meet in order to benefit from exoneration or reduction of the corresponding sanction, as provided for in Articles 60 and 61 of the LDC and its complementary regulations.
It also establishes the possibility of making inquiries about the availability of markers (which determine the possibility of applying to the Program), details the form and content of the marker application (which must be made in person before the CNDC), as well as the holding of a coordination hearing with the applicant and further detail on how to request the benefit, with special emphasis on the scope and safeguards regarding the duty of confidentiality and cooperation of the applicants in the procedure as well as by the authority.
In its articles 34 and 36 it establishes:
– Duty of Collaboration: implies that the applicant must cease the reported practice, fully cooperate, provide all requested information in a timely manner and form, report any new relevant facts related to the reported issue, maintain confidentiality regarding the Clemency Request, make themselves available to the Clemency Unit, attend hearings, and cooperate with the execution of diligences and proceedings.
– Duty of Confidentiality: both the applicant and the Clemency Unit must maintain confidentiality from the Marker Request, including the content of the Marker Request and the Clemency Request, the conditional/definitive benefit of exoneration or reduction of the sanction, the evidence provided, acceptance within this Program, and all documents submitted, along with information related to the filing and processing of the Clemency Request.
Finally, it establishes the formation of a specialized team within the CNDC, called the “Leniency Unit” (“LU”), which will be responsible for receiving and processing leniency requests at its initial stage. The members of the LU, who will be appointed by the CNDC, must have independence from the National Directorate of Anticompetitive Conducts, from the National Directorate of Economic Concentrations, and must not be serving as CNDC authorities at the time of their appointment.
This constitutes a further step towards the effective implementation of the Leniency Program, which, since its inception more than 6 years ago since the the LDC was enacted, has not been embraced nor generated any precedent in which it has been used in a CNDC investigation.
With this new regulation, the CNDC aims to promote an environment of greater trust and determination of the scope and procedure of the Program, in order to inspire greater security and predictability to potential “repentants” who ultimately decide to denounce cartels by availing themselves of these benefits.
The CNDC hopes that the Leniency Program will become a relevant tool for the detection, investigation, and sanction of cartels.
Agustín Waisman
Tomás López Bisso
Pilar Fernández Sasso