Competition Law at El Salvador
Competition Law in El Salvador
El Salvador’s competition framework is designed to promote free competition, prevent monopolistic practices, and protect consumers, in line with regional economic integration efforts.
Key Legislation:
Law on the Defense of Competition and the Protection of Intellectual Property (Ley de Defensa de la Competencia y Protección de la Propiedad Intelectual) – enacted in 2006.
Complemented by regulations and oversight mechanisms aligned with Central American Integration System (SICA) principles.
Regulatory Authority:
The Superintendence of Competition (Superintendencia de Competencia - SC) is the independent body responsible for enforcing competition law.
It investigates anti-competitive behavior, reviews mergers, and imposes sanctions.
Main Features:
1. Prohibited Practices
Anti-competitive agreements: Cartels, price fixing, market allocation, bid rigging, and other collusive practices are banned.
Abuse of dominant position: Firms with market power cannot engage in exclusionary or exploitative conduct (e.g., predatory pricing, refusal to deal).
Unfair competition: Acts that mislead consumers or distort market conditions.
2. Merger Control
Pre-merger notification is required if the transaction exceeds established thresholds in terms of market share or value.
The Superintendence evaluates whether mergers substantially lessen competition.
3. Investigation and Enforcement Powers
The SC has investigative powers, including dawn raids and requisition of documents.
It can impose fines, order cessation of anti-competitive conduct, and recommend structural remedies.
4. Penalties
Fines can reach up to 10% of the company's annual sales.
Repeat offenders may face higher penalties.
5. Regional Coordination
El Salvador coordinates with other Central American countries through SICA to harmonize competition policies and enforcement.
Summary Table:
| Aspect | Details |
|---|---|
| Governing Law | Law on the Defense of Competition (2006) |
| Enforcement Authority | Superintendence of Competition (SC) |
| Prohibited Conduct | Cartels, abuse of dominance, anti-competitive agreements |
| Merger Control | Mandatory notification above thresholds |
| Penalties | Fines up to 10% of annual sales |
| Regional Coordination | Collaboration through Central American Integration System (SICA) |
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