An amendment to the competition law presented

Santo Domingo.- Efforts made in the country to promote fair competition among market participants have shown significant progress. However, to advance further in the interest of both the nation and consumers, the current administration of the National Commission for the Defense of Competition (ProCompetencia) plans to introduce amendments to Law 42-08 on the Defense of Competition.

María Elena Vásquez Taveras, president of ProCompetencia’s Board of Directors, stated that while the country has made notable strides and reached many sectors, “there is still a long way to go.” She announced that the institution will soon present a draft amendment to Law 42-08 aimed at establishing stronger penalties for unfair competition — a long-standing demand from the business community.

Currently, the legislation above penalizes offenders with minimum wages, but the bill proposes that fines be based on the previous fiscal year’s turnover.

It also proposes to control concentrations, since the Dominican Republic is the only country in the region that does not prevent market concentrations.

The current legislation has several weaknesses: a lack of a mechanism for prior control of the impact of economic concentrations on free competition; limitations on sanctions and procedures; insufficient inter-institutional coordination; a lack of human and financial resources; and a lack of a culture of competition.

He explained that before merging, companies should go through Procompetencia to prevent the creation of monopolies or abuses of dominant position.

This type of situation can have an internal impact, occurring either within or outside the country, as in the case of foreign airline mergers, which, had they taken place, would have led to agreement on ticket prices and created a monopoly.

In the amendment to the Competition Law, he also considers it essential to incorporate the issues of leniency, “to detect cartels and collusion,” since this tool encourages the reporting of anti-competitive practices, such as cartels. Another issue will be the review of expiration dates and statutes of limitations in criminal justice, because currently, the statute of limitations is only one year. And digital markets, where one parameter is price, and most digital platforms are free.

The official explained, while participating in the Listín Diario Breakfast, that this year, two workshops have been held to facilitate understanding of the entity and the importance of competition issues in the economy to communicators and journalists, judges of the Judiciary, and also to Government ethics and integrity officials and purchasing directors, to contribute to the training of key actors. The goal, she said, is to reach 1,000 public servants this year, and since last April, 800 have already been trained.

She said the idea is for Government ethics and integrity officers to become overseers, given the importance of public procurement, which accounts for 18% of the country’s gross domestic product (GDP). “When they are violated, the state ends up buying more expensive and lower quality goods,” she said.

According to the official, the first sanction for collusion was applied last year. There are currently four open investigations: one at the National Institute for Student Welfare (Inabie), two in the economic canteens, and another in the medical oxygen market. This is why she said: “The approach has a dual purpose.” The first is the training of key players, since “the specifications are where the rubber meets the road,” and to ensure that the objective of free competition is met. The second is the defense of competition, to identify collusion alerts.

The president of Procompetencia participated in the Listín Breakfast, accompanied by José Beltré, director of competition promotion and advocacy; Liverca Gómez, head of the economic and market studies department; José Miguel García, head of the communications department; Jorge Espinosa, head of media; Jacqueline Genao, office coordinator; and Lilian Tejeda, journalist for the entity.

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Article 61 of Law 42-08 establishes minimum fines equivalent to 30 times the minimum wage, with a maximum of 3,000 times; others are 200 times the minimum wage, with a maximum of 3,000 times; and 30 times the minimum wage, with a maximum of 3,000 times. For providing false information to the commission, the fine is 50 times the minimum wage, up to 200 times, depending on the offense.