The year 2024 began with important legislative developments in Uruguay regarding the defense of competition, referring in particular to the regulations for the control of economic concentrations.
On January 1, 2024, the modifications to Law No. 18,159 on the Defense of Competition (hereinafter the “LDC”) included in the Accountability Law No. 20,212 came into force. We comment below on the main developments.
I. Modifies the billing threshold applicable to economic concentrations. It goes from a joint billing of the parties, in any of the last 3 fiscal years, from 600 million indexed units (tax included), approximately 90 million dollars, to 500 million indexed units (tax-free), currently close to 75 million dollars.
II. It incorporates an exception to the prior authorization regime for low-impact operations (“de minimis” rule). It establishes that, in addition to meeting the billing threshold indicated in the previous point, the minimum individual billing (tax-free) of two or more participants in the operation must be, in any of the last 3 fiscal years, equal to or greater than 30 million indexed units, approximately 4.5 million dollars. If this condition is not met, the transaction does not require authorization. Those who take advantage of the exception must also notify the Commission about the operation. Once notified, the Commission may determine by reasoned decision, within a period of 15 business days from notification, whether the operation requires authorization. In this way, the legislator tried to prevent what some local politicians and economists called “pac-man” acquisitions (repeated acquisitions of low-billing companies) from being left out of the prior control system.
III. Incorporation of “joint ventures” to the list of economic concentration operations and definition of “control”. The new wording of article 7 of the LDC expressly includes the creation of joint ventures in the list of economic concentration operations subject to authorization (if the indicated billing thresholds are met). Likewise, a definition of the term “control” is incorporated, which is understood “as the possibility of continuously and decisively influencing, directly or indirectly, the strategy and competitive behavior of one or several entities.”
IV. Referral to the general rules of the common administrative procedure. The new wording of article 29 of the LDC establishes that in everything not provided for in said law or in its regulatory decree, the provisions of Decree No. 500/991 will apply, that is, the general rules of the common administrative procedure. Previously, the LDC only referred to these rules for the investigation of anti-competitive practices and not for the prior control regime.
The Accountability Law also establishes that the Executive Branch will approve specific regulations related to the criteria to quantify notification thresholds, as well as the requirements and conditions that notifications and requests for authorization of economic concentration must meet.
For more information contact:
Carla Arellano | Counselor Ferrere | carellano@ferrere.com
