CHILE: An Introduction to Competition/Antitrust

Although Chile is a relatively small economy on the global stage, it has a robust and well-regarded competition system. Central to this framework are two key institutions: the Fiscalía Nacional Económica (FNE) and the Tribunal de Defensa de la Libre Competencia (TDLC). The FNE is responsible for investigating and prosecuting competition cases as well as managing the merger control system, while the TDLC is a specialised court composed of lawyers and economists that rules on competition cases. Both institutions have gained significant respect within Chile and internationally. Their decisions are often considered benchmarks in the region, showcasing the country’s leadership in this area.

As in other jurisdictions, our country has seen a surge in cases related to platforms and digital markets, e-commerce, ride-hailing and information-sharing apps, and other new economy markets, while the regulators also continue to focus on traditional areas of the economy, including some affected by price increases and output shortages in the context of the pandemic.

From a policy perspective, although there have been calls for legal reforms to address different issues, significant changes to Chile’s competition laws are not expected in the short term. Instead, it is anticipated that competition regulation in the country will continue to evolve gradually through the decisions of the authorities and their advocacy activities, with economic efficiency, consumer welfare and the promotion of competitive markets remaining at the core of Chile’s competition system, as these have now been the key drivers for the past three decades.

Beyond these trends, Chile’s competition landscape is also shaped by several specific cases, policy discussions, and developments that will likely dominate the agenda in the coming years and which are explored below.

Data Protection

One area that has gained considerable attention is personal data protection. In Chile, as in many other countries, the issue of personal data has transcended its origins in the protection of fundamental rights. Today, the collection, storage, and use of personal data are increasingly recognised as critical inputs for competitive development in certain markets. This has led Chilean authorities to consider the impact of personal data on market dynamics, including issues of information asymmetry, market power, and barriers to entry. This has been particularly evident in competition analyses related to abuse of dominant position cases and in merger control review.

As to this matter, a significant debate has emerged regarding the investigative powers of the FNE. One of the most pressing discussions revolves around the extent to which the FNE can access data, as highlighted by a recent case involving a market study on higher education, where the FNE requested information from universities regarding their students. This case, which is ongoing, underscores the tension between the need for comprehensive data in competition investigations, and the rights to privacy and data protection.

Merger Control

Merger control is another area where recent developments have raised important issues. Recent claims by the FNE and a key decision by the TDLC have brought to light concerns about the standards of completeness required for merger filings. These cases have set a high bar for the quality and thoroughness of the information that parties must provide, emphasising the need for diligent and transparent submissions. The FNE has made it clear that while they are open to discussions with parties regarding the completeness of filings, failure to provide the required information in a timely and thorough manner will lead to questionings or even prosecution by the FNE. This underscores the importance of co-operation between the notifying parties and the authorities, as the integrity of the merger control process heavily depends on the accuracy and completeness of the data provided.

In addition to the procedural aspects of merger control, there has been a growing focus on the review of non-compete and non-solicitation clauses related to merger agreements. This trend has gained relevance in the context of labour markets, where such clauses can have significant implications for competition.

Interlocking Directorates

Another critical issue in Chile is the regulation of interlocking directorates, a prohibition included in Chilean competition law eight years ago. Despite its introduction, only two cases involving alleged cross-shareholdings of directors in companies within the banking, securities brokerage, and insurance markets have been prosecuted by the FNE. These cases have sparked significant debate about the definitions and guidelines surrounding this offence, particularly in terms of what constitutes a “competing company” and the types of participation that fall under scrutiny. The TDLC’s rulings on these cases are highly anticipated, as they are expected to clarify the currently somewhat ambiguous regulatory landscape.

Abuse of Dominant Position

Abuse of dominant position is another area that has seen recent activity, and where activity is expected to increase.

The TDLC has dismissed some recent cases of alleged dominance abuse when the supposed violation occurred in the context of a contractual breach, declaring itself not competent to rule and deferring the matter to the civil courts. These rulings have highlighted the complex relation that in some cases exists between contract law and competition law.

On other hand, the FNE has indicated its intention to pursue more abuse of dominant position cases. An example of this enforcement focus was made evident at the end of 2023, when the FNE secured out-of-court settlements with food delivery platforms that had established restrictive clauses in their contracts with restaurants. This proactive stance by the FNE indicates a shift towards more rigorous enforcement in this area of competition laws.

New Economic Crimes Law

The new Economic Crimes Law (2023) includes several relevant changes to crimes related to business activity, establishing new offences and sanctions, and dramatically increasing the number of offences for which legal entities may be criminally liable.

This regulation refers to almost all areas of the law, from environmental, to labour, tax and also competition. The Law introduces specific criminal sanctions for collusion, falsely applying for leniency programmes, and the submission of false information in competition investigations. The possibility of holding legal entities criminally liable for these offences marks a new era in Chilean enforcement. However, it remains to be seen how these new regulation and sanctions will interact with the existing penalties established under Competition Law (Decree Law No 211). The Economic Crimes Law has also reignited discussions around competition compliance programmes, particularly considering the upcoming new guidelines being prepared be the FNE.

Digital Markets and Artificial Intelligence

As the Chilean economy continues to evolve, digital markets and artificial intelligence are becoming increasingly relevant for the competition authorities. The rise of cryptocurrency markets, the increasing prevalence of food delivery platforms, the growth of payment processing services, and the dominance of web browsers and online search engines are all areas where competition law is being tested. It is expected that in the coming years, these issues will take centre stage in Chile’s competition law practice, requiring all market players to be well-prepared for the regulatory challenges ahead.

* ** * *

Chile’s competition landscape is marked by a dynamic interplay of traditional legal principles and emerging economic realities. As the country navigates these challenges, the role of its competition authorities, particularly the FNE and TDLC, will be crucial in shaping a fair and competitive market environment that can adapt to both local and global changes. The ongoing discussions and legal developments in areas such as personal data protection, merger control, abuse of dominant positions, and digital markets will continue to influence the direction of competition policy in Chile, which faces the challenge of remaining at the forefront of competition enforcement in the region.