ANTITRUST AS INDUSTRIAL POLICY TOOL THE CASE OF ARGENTINA

1
ANTITRUST AS INDUSTRIAL POLICY TOOL?THE CASE
OF ARGENTINA
Marcelo den Toom M. M. Bomchil, Buenos Aires
American Bar Association MeetingSao Paulo, May
8-9, 2008
2
The source of all evils The 90s

• Market deregulation

• Privatization of State owned companies and
  assets

• Opening of markets to international competition

• Stabilization of economy and prohibition of
  price indexation mechanisms

• Focus put in opening of markets and not
  competition rules

Effect on foreign investment (1000 largest
companies in terms of sales)
No. of foreign owned in 1990 34
in 1998 59
3
Merger control the early years (1999-2001)

• Increase in market concentration

• Minimum or no undertakings imposed

• Relevant cases

AC Inversora Atlántida Telecomunicaciones /
Telefónica Media
AES Gener
Total TGN
Liberty Media Cablevisión
EDF Edenor
Hipermercados Jumbo The Home Depot
4
The Duhalde Administration (Jan 2002 May 2003)

• First merger cases with substantial divestments
  or prohibitions.

• First case of possible discrimination due to
  foreign origin Transener I.

5
The Kirchners Era (2003 - )
Foreign-to-foreign transactions affected

• Fox Pan American Sports correct application of
  the law or national champion case?

• Transener II outright pressure to sell to
  favoured party

• Gaz de France / Suez undue proposal to subject
  merger review to withdrawal of judicial claim

• Telecom Telefónica Werthein Group strict
  application of competition laws

6
The Kirchners Era (2003 - )
Local transactions favoured

• Arcor La Campagnola soft undertakings

• Cablevisión Multicanal tailor-made
  undertakings

• ICSA CICSA loose interpretation of past
  divestment undertakings

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Conclusions

• Different standards of review exist in cases
  involving

• Certain national investors only

• Certain national and foreign investors

• Certain foreign investors only

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Conclusions

• Discrimination adopts some of the following
  forms

• Longer periods of review

• Stricter application of competition laws

• Deviation from older precedents

• Burdensome additional requests

• Outright pressure to choose different acquiror

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Conclusions

• Not really an issue of nationality, but
  alignment.

• Market instability and local business culture
  attempts against effectiveness of discrimination
  and does not change foreign- ownership trend in
  2007, out of 200 largest companies only 5 were
  controlled by Argentine nationals.

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