The new coronavirus pandemic has forced governments to adopt urgent and exceptional measures. In other markets, the decisions have focused on allowing certain agreements among competitors and on authorizing state aid programs.
In Ecuador, the competition agency (Superintendencia de Control del Poder de Mercado, “SCPM”) has issued some communications regarding procedural deadlines, prices, and public procurement proceedings. Below a summary of the Ecuadorian authority’s measures and pronouncements.
Deadlines
On March 16th, 2020, the SCPM decided to stop the clock of all its proceedings[1]. In response to the questions raised in the days that followed, on March 31st the SCPM explicitly included on that suspension the 8-day deadline for the notification of economic concentrations[2]. In other words, companies who celebrate M&A agreements with effects in Ecuador during the sanitary emergency must calculate the filing deadline once the emergency is over (if they have not already filed during the suspension). It is nevertheless worth pointing out that the general obligation of notification and authorization, as well as the consequences derived from its infringement, has not changed[3], only its deadline has.
Prices
On March 29th, 2020, the SCPM published a press release[4] on its website reiterating that:
- Any change on prices must respond to the market dynamic and to the individual and independent decisions of the economic players, not to anticompetitive agreements or to guilds’ recommendations.
- Manufacturers, suppliers and vendors cannot take advantage of the emergency in order to increase their margins by means of unlawfully extracting the consumer surplus or in prejudice of the state’s resources.
Bid-rigging
On occasion of a recent complaint for an allegedly excessive pricing on the public procurement of N95 face masks[5], the SCPM has insisted on the same press release that, despite not being competent for regulating prices, it does have competence for investigating and sanctioning agreements among suppliers and vendors who rig public bids.
These declarations are added to the ‘exhortation’ made in a similar note by the SCPM on March 1st, 2020[6].
[1] Cfr. Resolution SCPM-DS-2020-14 of March 16th, 2020.
[2] Cfr. Resolution SCPM-DS-2020-015 of March 31st, 2020.
[3] The competition agency keeps functioning via telework, vid. Executive Decree 1017 of March 16th, 2020, Ministerial Agreement MDT-2020-076 of March 12th, 2020, and Resolution SCPM-DS-2020-13 of March 13th, 2020.
[4] https://www.scpm.gob.ec/sitio/wp-content/uploads/2020/03/EXHORTO-A-los-fabricantes-proveedores-y-comercializadores-a-las-instituciones-p%C3%BAblicas-organismos-de-control-y-a-2.pdf
[5] Vid. https://www.elcomercio.com/actualidad/coronavirus-iess-contrato-mascarilla-contraloria.html
[6] Vid. https://www.scpm.gob.ec/sitio/wp-content/uploads/2020/03/EXHORTO-Coronavirus.pdf
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