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The Interface Between Competition Law and Regulation in Chile—Who’s the Boss?

Paulo Montt, Jul 14, 2010

The context of post-liberalization has led to different tensions between competition law and regulation in several markets such as telecommunications and electricity. Whereas certain segments of those markets remain considerably regulated, competition prevails in other sectors. However, competition law and regulation coexist in most segments and this interface has created new challenges for competition and regulatory authorities. For instance, the same matter can be under the scope of two different sets of rules and different authorities may be empowered to deal with the same issue.

Several questions arise from this interface between competition law and regulation. First, it is unclear to what extent competition law may be applicable in regulated markets. The second question is whether regulation can be used as a defense for a claim based on anticompetitive conducts. The answer to both questions is not an easy task.

If these challenges have been difficult to solve for U.S. and EU authorities, the situation has been more problematic for developing countries like Chile, whose competition and regulatory systems lack the strength and tradition of more developed regimes.

In chapter II I will show, based on relevant case law, that U.S. and EU competition law systems have approached this matter in different ways and this divergence might be explained (not only) by the objectives pursued by competition law in both jurisdictions.

In chapter III I will describe how Chilean authorities have approached to this problem and will conclude that those authorities have left a considerable scope for competition law even where detailed regulation exists. This particular view may be explained by a number of legal changes introduced since 2003 that have entailed a new design of the competition law system.

 

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