Dominican Antitrust Law is Coming of Age

The objective of the Dominican Antitrust Law is to guarantee the wellbeing of consumers and prevent companies already established in the Dominican market from limiting the entrance of new products or companies into the country.

To achieve its objective, the law makes effective competition a matter of public order and makes its dispositions applicable to all economic actors (domestic or foreign) that carry out activities in the national territory, or whose activities originate outside the country but impact it.

The law forbids: (i) concerted practices and anticompetitive agreements, such as price agreements and production limitation agreements; (ii) dominant position abuse; and (iii) disloyal competition.
To ensure full compliance with the law, the National Commission for the Defense of Competition (CNDC or Pro-Competition) was created. This organism, which has jurisdiction to administratively be informed of claims and controversies that arise on the occasion of the application of the law, has the purpose of promoting the prevalence of effective competition.

For the provision of this guarantee, the CNDC can recommend initiatives that promote the simplification of administrative formalities, especially when regulating entities and municipal authorities in the fulfillment of their duties, and identify obstacles or undue interferences to individuals that may block their right to free enterprise and competition. In turn, administrative actions of the remaining market regulatory entities that dictate regulations or resolve sanctioning administrative purposes must be forwarded to the CNDC for review.
An important faculty of the CNDC is its sanctioning capacity. The CNDC can impose fees of up to the equivalent of 3,000 times the minimum wage of the economic sector in question through the commission on agreements and practices against free competition and the abuse of dominant position.

However, the CNDC has precarious time restraints in which to do its job; it only has 30 business days to carry out its investigation once a complaint has been received. If the given period of time is exceeded without ruling on its origin, the complaint is considered unfair, which implies that a meritorious complaint could be declared unfair by the lack of time to carry out an adequate preliminary investigation.

Equally, the maximum duration for the CNDC’s sanctioning procedure phase is 12 days, counted since the formal beginning of this period until the case is transferred to the Directive Council for its resolution. When this term expires, it will proceed ex officio or at the request of any interested party to be declared expired.
Entry into force of this law constitutes an important challenge, not only for the CNDC but to market participants as well. The CNDC has ordered many investigations of various sectors of the national economy and the findings indicate that there has been abuse of dominant positions by economic agents; that the dispositions of a regulatory entity have constituted a severe restriction to market competition that the given entity regulates; and that the structure of the distribution channels and existence of vertical restrictions (exclusive dealing) in certain markets could constitute obstacles to new companies, among others.
These findings should not be taken as a negative representation of Dominican economic activity. Rather, they represent the health of the country’s legislative and commercial practices and processes and the desire to comply with the standards followed by other business partners.

Moving forward, commerce and the law in the Dominican Republic are even more related to each other, and economic agents need legal teams whose orientation and advice allow them to continue developing their businesses without participating in anti-competitive practices.