Goodbye Excessive Prices… as a Competition Law Infringement in Argentina

Abstract

On February 23, 2023, Argentina’s Supreme Court upheld a decision that struck down the first and only sanction made by the country’s competition agency over excessive pricing.2Following an investigation and resolution by the National Commission for the Defense of Competition (Comisión Nacional de Defensa de la Competencia, “CNDC”), the Secretary of Commerce had, in June 2018, issued a fine against the Argentinian organization that collectively manages the copyrights for music works (“SADAIC”) over their abuse of dominance in fixing the price of fees hotels must pay for installing a TV in their rooms. Furthermore, a recommendation was made to the National Executive Power (Poder Ejecutivo Nacional, “PEN”) to regulate said fees, given that existing norms did not cover them (unlike other activities, which included price caps).3On August 20, 2019, the Federal Civilian and Commercial Chamber – Chamber III – supported the recommendation to regulate hotel fees and, towards the end of August 2019, the PEN issued a decree regulating the fees charged for the public use of intellectual property of authors and performers by hotels.4 Nonetheless, the Chamber also struck down the fine. Later, the Supreme Court ultimately rejected the appeal presented by the State and upheld the decision striking down the fine in the SADAIC case.This had been the first and only case where Argentina’s competition authority had sanctioned an agent for excessive pricing. The legal test used by the competition authority was quite strict, and consistent with a comparable case upheld by the European Court of Justice. Therefore, if this case was not ratified as an exploitative abuse of dominance through excessive pricing, one must conclude that Argentina’s Law for the Defense of Competition (Ley de Defensa de la Competencia) does not consider excessive pricing to be an infraction-worthy conduct.In this article, we explain the details of the case, as well as the arguments and evidence considered by the CNDC when making their recommendations for a fine and the regulation. We then analyze the Chamber’s sentence, which was recently upheld by the Supreme Court.