“The Superintendence of Market Power Control (SCPM by its Spanish initials) has analyzed regulatory provisions that could constitute regulatory barriers to entry and permanence in the market.” This is how Ana Samudio begins her latest article published in Industria Legal magazine, in which she addresses the issue of “evaluation of regulatory barriers” from the competition and antitrust standpoint.
As Samudio analyses in her article, “the Constitution recognizes the right of people to develop economic activities, individually or collectively, in accordance with the principles of solidarity, social and environmental responsibility; and the power of State intervention in economic activities to promote forms of production that ensure good living for the population and discourage those that violate their rights or the rights of nature”.
Therefore, this intervention is legitimate in the extent that a balance of these guarantees is achieved. In this way, any regulation that imposes restrictions on the entry and permanence of economic operators in the different markets must also be useful and sufficient, with the aim of always guaranteeing the public interest. They will also have to be reasonable and proportional, thus the development of efficient markets will take place.
Samudio concludes with the recommendations issued by the SCPM for the different markets:
- “Hemp: the reasonableness of: (i) the norm that prevents natural persons from obtaining development licenses for activities associated with the production and commercialization of hemp has not been justified; and (ii) the norm that determines a minimum area for hemp cultivation; and the recommendations to the Ministry of Agriculture to review said regulations, so that the entry of economic operators in this market is not unjustifiably restricted.
- Commercialization of automotive fuel: it was determined that the norm that requires an established network of -at least- 10 service stations to continue operating as a fuel distributor, has no technical support, therefore it constitutes an unjustified restriction to the number of economic operators that serve the automotive industry which harms competition. Consequently, it recommended the Agency for the Regulation and Control of Energy and Non-Renewable Natural Resources to remove this requirement.”