14 May Due process in Competition Law in Latin America: Presentation in the ABA Antitrust in the Americas 2019
Last week I had the honor of participating in a panel of the Antitrust in the Americas 2019 conference, organized by the American Bar Association in Buenos Aires. The panel was about due process and the role of judges in Competition Law. I had the pleasure of sharing this session with Elaince Johnston (Allen & Overy LLP, New York), Robert L. Barnes (Judge, Federal Court of Canada, Ottawa) and Javier Tapia (Judge, Chilean Competition Tribunal “Tribunal de Defensa de la Libre Competencia de Chile”).
Below I share some notes of my presentation, which was focused on the three main following aspects: 1) great diversity of trajectories among the authorities that apply Competition Law in Latin America and the Caribbean; 2) The guarantee of due process requires a political independence of the competent authority, material access to justice and reasonable decision-making time frames; and 3) The need to consider due process, not only for the accused/defendant, but also for the complainant/plaintiff.
1. One cannot speak about Competition Law in Latin America and the Caribbean as if it were a fully homogeneous and harmonized unit.
– In Latin America and the Caribbean (LAC) there are 22 enforceable national legislation and three regional (supranational) norms.
– In addition, there is a total of 31 competition authorities in the region and around 85% of these authorities are active.
– LAC jurisdictions have different historical, institutional and political-economic trajectories.
– These divergences have an impact on the way that competition proceedings are carried out and on the answer of how each jurisdiction guarantees due process within their local context. This has been recognized by the ICN’s guidelines on this matter (2015 – Guidance on Investigative Process):
“[c]ompetition agencies operate within different legal and institutional frameworks that impact the choice of investigative process and how these fundamental procedural fairness principles are implemented.”
At the same time, several supranational organizations that have influence over LAC jurisdictions have tried to identify universal criteria or minimums. This is, however, highly-challenging given the aforementioned differences in trajectories, but the recent steps that have been taken on this matter are promising. A good example is the Framework for Competition Agency Procedures (CAP), which the ICN just published and which will entry into force as of 15 May, 2019:
‘On April 3, 2019, the ICN Steering Group approved what it called the Framework on Competition Agency Procedures (CAP).28 The ICN described the CAP as an “opt-in” framework, open to all competition agencies, whether or not ICN members, and aimed as an implementation tool to advance basic fairness principles among all competition authorities. ‘
2. Due process is also related to the authority’s political independence and its neutrality (i.e. non discrimination based on nationality)
– This broad understanding of due process has been recognized by recent ICN’s documents (i.e. 2018 – Guiding Principles for Procedural Fairness in Competition Agency Enforcement), which includes among its principles: impartiality of enforcement, effectiveness of enforcement and that proceedings are efficient and completed in time (reasonable duration). This is also recognized by the ICN’s CAP 2019.
– All of the aforementioned becomes relevant to reflect on the nature of the authority (in which brand of the public powers is located, who appoints the head of the authority, if it has financial autonomy, etc.). Generally speaking, judges and courts offer higher procedural guarantees than the authorities located in the executive branch of the public power, which have both investigative and disciplinary powers.
There is currently in Europe an intense discussion about a Franco-German proposal to introduce political criteria in antitrust proceedings, particularly in merger control. Perhaps political independence can only be achieved when the competent authority is a judge. This feature is an exception in LAC, since only in Chile and Panama the judges are the ones with powers of enforcement, once the cases are promoted/initiated by competition agencies or private parties. However, such an institutional design could be very costly and perhaps the way to balance proceedings is, instead, offering a full judicial review to competition authorities’ decisions.
– The following sections from the article of Judge Douglas H. Ginsburg and Taylor M. Owings, illustrate the aforementioned:
“This difference in the standards of review perhaps reflects that a district court is a forum that provides all the procedural safeguards we have already discussed. Particularly when the agency does not follow best practices, a robust right of appeal is necessary to safeguard due process. “
“Of course, where a company or an individual is charged with a criminal violation of an antitrust law,’ the proceedings originate not before a competition agency but in court, where due process protections are ordinarily at their strongest.”
“A neutral decision-maker is fundamental for ensuring a case is decided on its merits. The US Supreme Court put it this way: ‘Not only is a biased decision-maker constitutionally unacceptable but “our system of law has always endeavored to prevent even the probability of unfairness”‘.”
3. Due process is also about material access to justice (i.e. damages proceedings) and procedural efficiency (completing proceedings within reasonable time frames).
– Due process also involves the effectiveness and efficiency in proceedings, particularly in proceedings related to damages. If procedural pathways are, in practice, blocked in LAC, there is no material access to justice. Perhaps we have been focusing too much on due process for the investigated parties, and less on the plaintiffs rights.
— Due process is also related to technical capacity and resources of the authority to complete proceedings within reasonable time frames. The delays in solving cases can be against due process. The following sections from the article of Judge Ginsburg and of Owens illustrates this, as follows:
‘The same may be true of an agency acting in all good faith but insufficiently funded to move expeditiously.’
‘Too often, justice delayed is -as the maxim says -justice denied. Likewise, due process delayed is due process denied.’
How to open paths to promote private enforcement? The Peruvian 2018 reform is worth to be followed up, since it allows the competition authority to represent the victims of an anti-competitive practice in damage claims. However, that could also represent a due process problem, since we would have an authority that decides in first instance a case through a governmental procedure, and then has legitimacy to present a lawsuit for damage compensation regarding the very same case.
Another interesting example to follow is the reform to the Argentinian Competition Law of 2018, which included punitive damages and follow-on actions for proceedings on damage compensation.
Finally, I venture to present my own proposal, which I will further explain in detail. It consists of the possibility for the law to empower agencies of national governments, which are experts in managing strategic State litigation, to present actions for damages in cases of bid rigging in public procurement. As a matter of example, the State National Agency of Judicial Defense in Colombia “Agencia Nacional de Defensa Jurídica del Estado” can be expressly empowered for this purpose.