On Friday, November 19, 2021, the General Secretariat of the Andean Community (SGCAN or General Secretariat) issued its decision on the Kimberly-Clark – Familia case for alleged price fixing in the tissue paper market (Resolution No. 2236).
The SGCAN investigation initiated 5 years ago at the request of the Ecuadorian competition authority (SCPM) and became notorious for the use of confidential and self-incriminatory information provided by the parties in the context of a leniency application filed in Ecuador. The potential detrimental effects of a ruling adopted against this background on national leniency programs have been widely discussed in recent years.
The latest decision was adopted as a result of an appeal for reconsideration against the SGCAN’s 2018 pronouncement and was filed by Productos Familia Sancela del Ecuador S.A., Colombiana Kimberly Colpapel S.A., the Ministry of Foreign Trade and Tourism of Peru and the Superintendence of Industry and Commerce of Colombia. These are some of the most relevant topics addressed by the Andean authority:
- The General Secretariat has confirmed its finding that Familia and Kimberly fixed their prices with binational anticompetitive effects between 2006 and 2016 in violation of Article 7(a) of Decision 608.
- As a result, a fine of approximately US$34 million – US$17 million for each economic operator – has been set to be paid by the end of the year. This amount represents a reduction of US$1 million from the original 2018 decision.
- Another difference between the 2018 and 2021 resolutions is that the fine is no longer to be paid to the SCPM, as previously ordered, but to the SGCAN instead.
- Kimberly and Familia argued that the proceeding was void for having used illegally declassified evidence – i.e. illegal evidence. Similar concerns were raised during the case by the representatives of Colombia and Peru. In this regard, the SGCAN has said that “it is possible to analyse the evidence in a flexible manner, in the sense that any evidence which may lead to the truth must be admissible”.
- The General Secretariat has also pointed out that the Ecuadorian judicial authorities have confirmed the validity of the SCPM’s actions, for which reason the evidence used for the opening of its investigation was not flawed and that, in any case, it only constituted “initial circumstantial evidence” which did not affect the rest of the supranational investigation process.
- Likewise, the SGCAN has stated that the national leniency programs could not be harmed by this proceeding since Kimberly did benefit from them in the jurisdictions where such programs are applicable; however, communitarian effects could not be attributed to national proceedings.
- It is important to note that the new resolution could only be issued after the conclusion of three court proceedings in Ecuador in which various aspects related to the origin of the communitarian case were being discussed: one against the order to declassify the information provided by Kimberly to the SCPM in the context of the leniency program, and two against the SCPM’s decision to ask the SGCAN to initiate an investigation of its own. This request had been made in July 2018 by the appellants and accepted by the General Secretariat. Once resolved, the jurisdiction of the SGCAN was re-activated and the SGCAN was able to issue its decision.
Resolution No. 2236 is still subject to annulment by the Court of Justice of the Andean Community.
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