Interim Measures in Abuse of Dominance Investigations – Roxana Arellano – 2024 LACCF

This presentation by Roxana Arellano (Lawyer and Professor at Universities of Pacific and UPC, Peru) was made during a discussion on Interim Measures held during the 2024 OECD-IDB Latin American and Caribbean Competition Forum in the Dominican Republic on 9-10 October 2024. More materials and information can be found at https://oe.cd/laccf24.

This presentation was uploaded with the author’s consent.

1. Restricted Use - À usage restreint
Interim measures in
abuse of dominant
position cases:
the Peruvian
experience
Panelist: Roxana Arellano García

2. Restricted Use - À usage restreint
Whathas
happened in
thepast20
years?

3. Restricted Use - À usage restreint
Thesodium
hypochlorite
case

4. Restricted Use - À usage restreint
The complaint (2003)
Source: Resolution 068-2004-INDECOPI/CLC (Own translation)

5. Restricted Use - À usage restreint
First interim measure
(2004)
❑GROMUL'srequest:ThatQUIMPACsellthemdirectly
sodiumhypochlorite(SH)at“competitiveprices”,with
discountsaccordingtothevolumetobepurchasedandin
theformofcashpayment.
❑Analysis of the interimmeasure:
•The likelihood of the infringement(fumus bonis iuris)
➢Dominantposition:nosubstitutionanalysiswas
conducted/QUIMPACwastheonlySHproducerin
Peru.
➢Refusaltodeal:theauthorityrejectedthelegaland
commercialreasonsgivenbyQUIMPAC.
•Theurgency to prevent harm(periculum in mora)
➢Fromalladvancedintheprocedure,theauthority
inferredthatinhibitingGROMULfrombuyingHS
directlyfromQUIMPACwouldcauseserious
damagestotheplaintiff,giventhattheycouldbe
pushedoutofthemarket.
❑Interimmeasure:QuimpacmustsellSHtoGROMULunder
thefollowingtermsandconditions:
•Paymentmethod:cash
•Priceandsalesvolume:thosewhichmayarisefromfree
negotiationbetweentheparties
❑Tribunal:revokedtheinterimmeasureasthesubstitution
analysishadnotbeenconducted.

6. Restricted Use - À usage restreint
Second interim measure
(2004)
❑Newfact:discriminationcomplaintagainstQUIMPAC
•GROMULrequestedthatQUIMPACsellthemtheSHatthe
samepricepertonasofferedtoClorox(US$65).
❑Analysis of the interimmeasure:
•The likelihood of the infringement(fumus bonis iuris)
➢Dominantposition:QUIMPACheld100%oftherelevant
market.
➢Discrimination:Pricesandquantitiessoldtoother
companieswerecompared,andadiscriminatory
strategyinfavorofCLOROXwasverified.
•The urgency to prevent harm(periculum in mora)
➢TheCommissionreferredtotheargumentsofthefirst
resolution.
➢CLOROXobtainedagreatermarketshareinregions
whileGROMULhadproblemstopaytheirdebts.
❑Interim measure: QUIMPAC must sell sodium hypochlorite to
GROMUL under the following terms and conditions:
•Payment method: cash
•Sales volume: 20 TN mínimum per month. Any greater amount will
be the result of free negotiation of the parties.
•QUIMPAC must providethegeneral public with all information
regarding theSH final prices, as well as the supplytermsand
conditions.
❑Tribunal:declaresthedecisionnull(lackofmotivationrelated
totheurgencytopreventharm)

7. Restricted Use - À usage restreint
Lessons
Exhaustive review of
each stage of the
methodologyforan
abuse of dominant
position case
Difficulty in designing
the interim measure
Difficulty of
compliance/monitoring
of interim measures
that involve
negotiation

8. Restricted Use - À usage restreint
The
intermediate
stage

9. Restricted Use - À usage restreint
Reasons for
denying
interim
measures
Absence of likelihood of
dominant position
Insufficient evidence related to
the urgency to prevent harm
Formal aspects
(e.g. fee payment)

10. Restricted Use - À usage restreint
Electronic
payments
case

11. Restricted Use - À usage restreint
The complaint
(2021)
Source: Resolution 013-2023/DLC-INDECOPI (Own translation)

12. Restricted Use - À usage restreint
Analysisof
theinterim
measure
(2023)
The likelihood of the infringement The urgency to prevent harm
Dominantpositioninthemarket
ofpaymentcardnetworksand
otherpaymentmedianetworksor
platforms(includingvouchersor
coupons,walletsandtransfers)in
Peru.
Unjustifiedrefusaltoaffiliateand
processtransactionsfromnon-
domiciledbusinesses(Niubizand
Izipaycommunications).
Exclusionaryeffect:impacton
Ebanx'spermanenceinthe
market (consideringthe
importanceofnon-domiciled
businesses).
Preponderanceofnegativeeffects
overpositiveonesincompetition.
Asof09/16/2023,Visawouldstop
acceptingauthorizationand
compensation requestsfor
“unauthorized”transactions(thatis,
fromnon-domiciledmerchants).
Fromthebeginningofitsoperations
in2019toJuly2023,Ebanxhas
processed61.47%ofthetotalvalue
ofitstransactionsthroughpayment
cards.Ofthesetransactions,88.91%
wereprocessedthroughtheVisa
network.
Thetermoftheproceeding.
Proportionality and feasibility
analysis:
maintainingthe status quo

13. Restricted Use - À usage restreint
OrderingVisaInternationalService
AssociationandVisaInternationalPeru
S.R.L.torefrainfromrefusing,directly
orindirectlythroughthirdparties,to
affiliateorprocesstransactionsfrom
businessesnotdomiciledinPeru;as
wellasfromimposingpayments,fees
oranyothermeasurethatrestrictsthe
accessofEbanxPerúS.A.C.toVisa’s
paymentnetwork.
Interim measure
** Decision confirmed by the Tribunal (2024)

14. Restricted Use - À usage restreint
Some lessons: recent practice
Evaluation of all stages of
the methodology ofan
abuse of dominant position
case
Cautious position in the
issuance of interim
measures/Weighing of
harms and benefits.
Interim measures and
changes in thebehaviorof
theparties
Importance ofcountingon
informationin the initial
stage
(from previous market
studies)

15. Restricted Use - À usage restreint
Bonus track
Consumer protection

16. Restricted Use - À usage restreint
Tottus
panettone
case

17. Restricted Use - À usage restreint
Theinitiationoftheproceeding
and the interim measure (2021)
❑Sanctioningproceeding: violationof the suitability duty
(Consumer Code)
❑Analysis of the interimmeasure:
•The likelihood of the infringement
➢Report ALS (0,01g/100g): provided by the party
➢Report SAT (5,02g/100g): ex officio
•The urgency to prevent harm
➢Presumption ofproducthomogeneous
composition
➢Health risk
❑Interim measure:
•Cessation of selling the product
•Withdrawal of lots from the market
•Withdrawalofadvertising
Hypothesis of the case: the
product exceededthe2 g of
fatty acids per 100 g of fat
established in DS 033-2016-SA

18. Restricted Use - À usage restreint
Variation of the interim measure
(2021) and final decision (2022)
❑Analysis:
•The likelihood of the infringement
➢LabreportCMA:withintheparametersofthe
regulation/providedbytheparty/testcarried
outonaproductbelongingtoaspecificbatch
•The urgency to prevent harm
➢Theauthoritymaintaineditspositiononthe
presumptionofhomogeneousproductsand
healthrisks
❑New interimmeasure:
•Presentingasampleforeachbatchthatentersthe
marketinordertoverifyifitcomplieswiththe
regulation.
❑Finaldecision:unfounded(lackofevidence/atleast4
laboratoryreportsrevealedthattheproductwaswithinthe
parametersoftheregulation)

19. Restricted Use - À usage restreint
Some reflections
Use of presumptions
Quantity and quality of the evidence
Costs for companies / Analysis of less harmful
measures
Type I error

20. Restricted Use - À usage restreint
Thank you
[email protected]