a) Antitrust issues regarding economic concentrations

For purposes of conducting business in Argentina, a foreign investor is most likely to purchase of stocks or other equity interests in Argentina. The Argentinean Antitrust Act (Act Nr. 25,156 or "LDC", last amended on 2014 by Act Nr. 26,993) states that certain acts of economic concentration need to be approved by the Secretary of Commerce, with a previous opinion from the National Antitrust Commission ("Comision Nacional de Defensa de la Competencia" or "CNDC").

Acts of economic concentration of companies that need to be previously approved by the Secretary of Commerce and the CNDC are: (i) the merger of companies; (ii) the transfer of going concerns; (iii) the purchase of stock or other equity interests; and (iv) any other agreement transferring assets or vesting the decision-making power of the relevant company. The list is not exhaustive because even the acquisition of minority equity interests in some cases may be subject to notification and approval by the CNDC.

The LDC applies to all individuals or companies who operate in whole or in part of Argentina and to those who engage in economic activities outside the country, to the extent that may produce effects on the domestic (Argentine)  market. The CNDC takes into consideration the “economic reality” principle in order to evaluate this matter.

The LDC provides for exceptions in which the transaction does not have to be previously approved by the Secretary of Commerce and the CNDC. These exceptions are interpreted restrictively by the CNDC. 

The notification and, therefore, the approval by the enforcement authority are mandatory if the aggregate of local sales volume of all affected companies within the country for the last fiscal year exceeds ARS 200 million. 

If the transaction fits into the description, the previous approval procedure must be initiated before the CNDC prior to completion or within one week –5 business days– following: (i) the execution of the purchase or transfer agreement between the parties; or (ii) the acquisition of the controlling interest, whichever occurs first. The previous approval procedure does not entail the suspension of the transaction. Nevertheless, it should be taken into consideration that the transaction will only be effective among the parties and vis-à-vis third parties once approved. Its common practice to include among the provisions of the purchase or sales agreement several clauses: (i) suspending the effects of the transaction until it is approved; and/or (ii) regulating the procedure in case of its rejection.

Failure to comply with LDC may give rise to the imposition of fines amounting to up to ARS 150 million. Furthermore, fines of ARS 1 million may be imposed per day of delay if the parties fail to notify following the expiration of the term to notice. 
Within the process, the CNDC will review certain aspects regarding the transaction and its impact on competition: (i) the relevant product market and the relevant geographic market, (ii) the market shares of the competitors within the relevant market, (iii) barriers to entry of new competitors; and (iv) productive efficiency gains generated by the merger.

The CNDC will also analyze the existence of "no competition" clauses in the purchase or sales agreement between the parties (e.g. know-how, goodwill, etc.). The CNDC described in several legal opinions the terms of validity of such clauses.

The Argentinean Secretary of Interior Commerce, based on the CNDC recommendation, can decide to do any of the following: (i) approve the transaction; (ii) approve the transaction subject to conditions established through commitments submitted by the parties itself or restrictions imposed by the CNDC (e.g., structural and/or behavioral constraints); or (iii) reject or prevent the transaction. Tacit approval is admitted in this process, as well as the expiry of the procedure.

b) Antitrust issues regarding practices

(i) General Prohibition

The LDC lists a series of acts which are considered restrictive practices, provided that the requirement of harm to the general economic interest (“daño al interés económico general”) is met. This list, which is not exhaustive, includes: 

The LDC also prohibits the abuse of monopoly power (the abusive use of such dominant position provoking damaging effects on competition). The monopoly power occurs when - for a certain type of product or service - that person is the only supplier or buyer in the national market or in one or several parts of the world, or when without being the only one, he or she is not exposed to substantial competition or when, because of the vertical or horizontal degree of integration he or she is able to impact the economic potential of a competitor or participant in the market.

There are no safe harbors provided by the LDC for low market shares nor is there a legal presumption of dominance for high market shares. The CNDC decides dominance cases on a case-by-case basis. A firm accused of abusing its dominant position can justify the anti-competitive practice on the basis of the potential efficiencies derived from the practice.

(ii) Sanctions

The following sanctions could be applied if an infringement to the LDC is detected:

It is important to note that the fines imposed by CNDC should be paid in order to appeal the sanction before a court of appeals. The appeal will only be granted if payment of the fine has been carried out unless “irreparable harm” can be shown.


Matias Zaefferer (zaefferer@rctzz.com.ar)
Hernan D. Camarero (camarero@rctzz.com.ar)
Damian Navarro (navarro@rctzz.com.ar)