UNFAIR COMPETITION V. COMPETITION DEFENSE

UNFAIR COMPETITION V. COMPETITION DEFENSE

It is very common to confuse Unfair Competition with Anticompetitive Competition or defense of Competition, even among legal professionals certainly homonymy does not help much and, although both disciplines may have some common elements, they are different areas and different protected legal assets. That is why in this post we will try to give some notions on how to distinguish them.

In general, it can be said that the difference between both branches lies in the fact that competition law is primarily aimed at defending the public interest, which is not an essential element of unfair competition regulation, which belongs to the sphere of competition. private right.

Broadly speaking, competition law pursues agreements, decisions, recommendations or practices that may prevent, restrict or distort competition, as well as the fact that companies that by their power in the market have a position of power of relevant ownership and Abuse her to unfairly subdue other operators.

For example, an agreement between several competitors to agree on the prices of their products or the unjustified refusal of a company with a dominant position to supply its products to a distributor. It also establishes the procedures for controlling economic concentrations to prevent them from having a pernicious effect for the existence of free competition in the affected market. To delimit it in a practical way, the rules on reference competition law are those set forth in Supreme Decree No. 29519 of April 16, 2008, where it establishes two types of anti-competitive behaviors that threaten the public interest and that are established in The following items:

Article 10 – (Absolute anticompetitive behaviors)

  1. Absolute anticompetitive behaviors are acts, contracts, agreements, arrangements or combinations between competing economic agents, whose purpose or effect is any of the following:
    1. Set, raise, arrange or manipulate the sale or purchase price of goods or services to which they are offered or demanded in the markets, or exchange information with the same object or effect;
    2. Establish the obligation not to produce, process, distribute, market or acquire but only a limited or limited amount of goods or the provision or transaction of a number, volume, frequency restricted or limited services;
    3. Divide, distribute, assign or impose portions or segments of a current or potential market of goods and services, by means of customers, suppliers, specific or determinable times or spaces;
    4. Establish, arrange, coordinate positions or abstention in tenders, contests, public auctions.
  2. Economic agents who engage in absolute anti-competitive behavior will be liable to apply administrative sanctions, without prejudice to the criminal and civil liability that may result.

Article 11 – (Relative anticompetitive behaviors). – The acts, contracts, agreements, procedures or combinations whose object or effect is or may be unduly displacing other market agents are considered anticompetitive conduct; substantially impede their access, establish exclusive advantages in favor of one or more people, in the following cases:

  1. Among economic agents that are not competitors with each other, the establishment, imposition or establishment of the exclusive marketing or distribution of goods or services, by reason of subject, geographical situation or for certain periods, including the division, distribution or assignment of customers or suppliers ; as well as the imposition of the obligation not to manufacture, distribute goods, provide services for a certain or determinable time;
  2. The imposition of the price and other conditions that a distributor or supplier must observe when marketing, distributing goods or providing services normally different or distinguishable, or on the basis of reciprocity;
  3. The sale, purchase or transaction subject to the condition of not using, acquiring, selling, marketing, providing the goods and / or services produced, processed, distributed or marketed by a third party;
  4. Unilateral action consisting in refusing to sell, market or provide certain persons, goods and / or services available and normally offered to third parties;
  5. The agreement between several economic agents or the invitation to them, to exert pressure against any economic agent or to refuse to sell, market or acquire goods or services to said economic agent, in order to dissuade him from a certain conduct, retaliate or force him to act in a certain sense;
  6. The systematic sale of goods and / or services at prices below their total average cost or their occasional sale below the variable average cost, when there are elements to presume that these losses will be recovered through future price increases.
  7. In the case of goods and / or services produced jointly or divisible for marketing, the total average cost and the variable average cost will be distributed among all by-products or co-products;
  8. The granting of discounts or incentives by producers, suppliers to buyers with the requirement not to use, acquire, sell, market, provide the goods and / or services produced, processed, distributed or marketed by a third party, the purchase, transaction subject to the requirement of not selling, marketing, providing to a third party the goods and / or services object of the sale or transaction;
  9. The use of the profits that an economic agent obtains from the sale, commercialization or provision of a good or service to finance the losses due to the sale, commercialization or provision of another good and / or service;
  10. The establishment of different prices, conditions of sale or purchase for different buyers and / or sellers located on equal terms;
  11. The action of one or more economic agents whose object or effect, direct or indirect, is to increase costs or hinder the production process or reduce the demand faced by competitors.

On the other hand, Unfair Competition is provided for in article 69 of the Bolivian Commercial Code, which protects the private interests of businessmen against acts of other market operators that may be deemed unfair to them (deception, confusion, induction of contractual breach, sale at a loss, etc.), but also protects the collective interests of consumers (consumer confusion, pyramid sales, coercion, etc.), acts that constitute unfair competition are:

  • Violate the provisions that protect the commercial name, trademarks, invention patents, notices, samples, secrets and others of the same nature. For example, that a company bears the same name or brand as another, knowing that it is already registered.
  • Use supposed names, deform ones known or adopt distinctive signs that are confused with the products, activities or propaganda of other competitors. For example, that a company, for winning customers use the colors and name similar to that of an already established company of the same item.
  • Use means or systems to discredit the products or services of a competitor or alter them for the purpose of deceiving. For example, that a competitor maliciously indicates that his opponent’s products are of poor quality.
  • Use a designation of origin or imitate and take advantage of the qualities of third-party products for your own benefit. For example, that a company sells an imported product without having the rights of said appellation of origin.
  • Use weights or exaggerations whose use may lead to errors in the public. For example, advertise a product with larger dimensions than the real ones.
  • Bribe employees of another company to scare away customers or engage in machinations to deprive trusted competitors of technicians and employees.
  • Use malicious means or systems intended to disorganize the commercial market. For example, divert customers, dumping, etc.
  • Perform any other procedure to the detriment of other entrepreneurs, which is contrary to the Law and commercial customs.

The distinction between these two areas also has a very substantial practical effect. Behaviors contrary to competition law are supervised by the Business Control and Control Authority (AEMP).

On the contrary, acts of unfair defense are always prosecuted at the request of a party as they belong to the field of civil jurisdiction and their knowledge is assigned to the Civil and Commercial Courts of the Superior Court of Justice.

In short, competition law and unfair competition are separate areas regulated and controlled separately, although they have some elements that are sometimes related.



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