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Peru: Congress moves to reduce penalties for price-fixing

 |  June 19, 2018

In an unexpected turn, the Consumer Defense Commission of the National Congress of Peru approved last week an opinion that reduces the maximum level of sanctions applicable to anti-competitive practices, such as collusion between companies or agreements to eliminate competitors.

“The bill was going down a different path, which was raising the sanctions, but in the end the document was approved in different way. I do not agree, but I still voted in favor, now we have to debate in the plenary session, “said Juan Carlos Gonzales, congressman of Fuerza Popular, who first authored the initiative.

The new standard increases, from 1,000 UIT (1 UIT = US $ 1,233, approximately) to 1,500 UIT the amount of the fines that can be collected, as long as this figure does not exceed 12% of the total sales of the offending group or economic agent. However, the new standard modifies this last detail, calculating the cap on the income gained for the specific product or service, not for the total of the company or economic group.

In this regard, the president of the Consumer Defense Commission, Miguel Castro, defended the proposal, indicating that it is aimed at sanctioning the product line in which the infringement occurred.

“If, for example, there is a violation of a supermarket for the sale of toothpaste, you should not impose the penalty on all income, but only on the product line. Otherwise, it could greatly affect the company and force it to close” he said. .

However, Jesús Espinoza, technical secretary of Indecopi’s Free Competition Commission, spoke of his surprise at the initiative, considering that “… a benevolent treatment is offered to companies, which goes against the formulas that are used in other countries across the region … ” and expressed concern that companies will feel encouraged to engage in this type of practice.

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