Is the application of the “rule of reason” and the “per se rule” viable in Colombia?

At a forum organized by the Department of Economics Law, experts analyzed the application of competition rules in the Colombian legal sphere.

In national legislation, economic activity and private initiative are free within the limits of the common good; therefore, while free economic competition is a right, it also entails serious responsibilities.

In this sense, the State is responsible for monitoring and controlling any manipulation companies exert over the domestic market through anticompetitive agreements, such as cartel prices. To review these agreements, there are categories determining if a particular behavior is, or not, anticompetitive.

In fact, the Economics Law Department held a forum to deepen on the concepts and application of the “per se rule” and the “rule of reason,” as well as the elements justifying its use in the Colombian legal system.

The “per se rule” applies to behaviors whose nature is so clearly anti-competitive, it does not need an elaborate study to establish their illegality. The “rule of reason” applies to behaviors whose anticompetitive effects can only be evaluated through analysis of individual acts, their nature, and the market, among others.

Although the two categories have greater acceptance in Europe and the United States, the speakers spoke about their implementation in Latin America, and agreed that the implementation of these practices has not been entirely effective without taking into account the context of the region:

“The first obstacle is the interpretation of these rules in the Administrative Sanction Law. In Mexico, the issue has been addressed from relative, absolute, and restrictive practices,” explained jurist Andrés Palacio.

In the Colombian case, he said, the “rule of reason” has been adjusted to the standards’ design and mentions prohibited competition conducts. However, these have to be addressed within a constitutional framework, so the competition authority can independently interpret the law.

“In Latin America, Mexico has the Federal Economic Competition Commission; Chile has the Free Competition Defense Court, and Colombia, the Superintendence of Industry and Commerce – SIC,” he added.

Nevertheless, for José Miguel de la Calle, former Industry and Commerce Superintendent, unlike the control entities of other countries in the region, the SIC does not enjoy the same independence, as it is part of the National Government.

“We do not need to adopt a “rule of reason” for the competition authority to take into account the consequences of an act to determine its illegality. Additionally, adopting these rules also has effects on what can be proven, and, therefore, penalized,” said de la Calle.

The panelists agreed that in Colombia, there are still no adequate strong institutions to adopt the “per se rule” and the “rule of reason.” “The system still lacks the separation of duties, independence, and autonomy to apply a model like this,” they concluded.

The event also featured participation by academics and consultants such as Felipe Serrano Pinilla, Alfonso Miranda Londoño, Camilo Ossa Bocanegra, and Juan Pablo Herrera Saavedra.

Within the framework of the Conference, the book “La institucionalidad en el Derecho del Consumo y metodología para la evaluación y seguimiento de la regulación” was launched, as a contribution to regulators, supervisors, analysts, and all private and public sectors interested in this important branch of Economics Law.