Anti-competitive acts of the State

After the sanction imposed on Carvajal and other companies for allegedly engaging in anti-competitive practices was made public, the Superintendent of Industry and Commerce (SIC), Pablo Felipe Robledo, announced that he would again promote before Congress the bill to reform the competition regime in Colombia.

This bill has several purposes, namely: to stiffen the fines that the SIC may impose for the commission of restrictive business practices; to reform the regime of business integrations; to grant the SIC the ownership of the criminal action to investigate certain crimes; to modify the types of acts constituting unfair competition and to grant powers of intervention to the SIC in the issuance of administrative acts that have as purpose or effect the creation of anticompetitive situations, among others.

Given the announcement of the SIC regarding the insistence on this project, it is important to emphasize that it will regulate an issue that so far has not been fully addressed, although it has already been analyzed by the Council of State, and is related to the State as a generator of anticompetitive acts, through the judgments issued by its high courts.

This problem was analyzed by the high court in the dissenting opinion issued by Councilors Marco Antonio Velilla, María Elizabeth García and William Giraldo in the renowned judgment that settled the nullity action proposed by a citizen against the National Television Commission (Cntv), regarding the awarding process of the third television channel (file number 2010-0036-00 file 38924).

There, in summary, the aforementioned salvamento considered that if the Council of State declared the nullity of a section of the bidding conditions that established that the Cntv could consider only one offer (despite the fact that multiple interested parties had participated in the process) under the pretext that this violated the principle of free competition by restricting the multiplicity of bidders, such jurisdictional act, in itself, was anti-competitive.

The above, for artificially preserving, and against the consumer and the market, the existing duopoly in the television channels, as well as for ignoring the jurisprudential line that such entity established and by means of which the "compulsory award rule" was created, a rule that obliged the public administration to choose the contractor that had submitted the most favorable proposal, even if it was the only proposal submitted (see judgment of the Council of State of June 24, 2004, judge Ricardo Hoyos Duque).

Likewise, the dissenting counselors recalled that, in Colombia, on multiple occasions, important bids have been awarded to the sole qualified bidder, as was the case of the sale of the participation of La Nación in the electricity companies, the award of the concession to CityTV, the PCS personal communication services and, lastly, the sale of Isagen.

If such a project were to be promoted again, it should contain a rule that would allow the SIC to pronounce on draft rulings that could generate artificial distortions in the markets or have any type of anti-competitive effect.