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The Government seeks to facilitate market concentration

Consistent with the president’s proposals Javier Milei, who defends the idea that market concentration is better for the economythe omnibus bill contains modifications to the law of Defense of Competition that, somehow, They help a company to buy its competitor in an activity.

As published in In the Official Gazette this Wednesday, the Secretary of Commerce, Pablo Lavigne, raised the threshold from which companies have to inform the Government that they are going to start a market concentration. He set it at $50,610 million, which is equivalent to about US$60 million. at the official value. But the ruling party wants to take it higher.

That corresponds to the law that establishes what is called “unit of value”, equivalent to 20 pesos of 2018, which was adjusted once a year based on inflation. The rule says that operations equivalent to 100 million value units must be reported. This amount includes the volume of business involved in a concentration.

In the kilometer-long bill that the Executive Branch sent to Congress a few days ago, It is proposed to raise the threshold to about $85,000 million, which would be equivalent to about $100 million.. That is, the margin increases by 66% compared to the current one. The Value Unit that is at $506 would go to $850.

The standard defines mergers between companies as acts of economic concentration:

  • The transfer of goodwill;
  • The acquisition of ownership or any right over shares or capital participations or debt securities that give any type of right to be converted into shares or capital participations,
  • and any other agreement or act that factually or legally transfers the assets of a company to a person or economic group or grants it influence, among others.

One of the most important elements of the proposed changes is that The five-member Competition Defense Court will be appointed by the President of the Nation with agreement of the Senate. But while the approval of the specifications is delayed, The Executive Branch may appoint a commission. It simplifies the previous method, which required a public competition for background and opposition. In more than 25 years that Argentina has had a Competition Law, it has never been able to designate a court.

The authorities can advise themselves by a maximum of 15 specialists. Approval procedures are reduced. In the event that the authorities approve an economic concentration, then this process It cannot be challenged or stopped at administrative headquarters.

In his participation in Davos, Milei defended economic concentration: ”Regulating monopolies, destroying profits, and destroying increasing returns would automatically destroy economic growth.”said.

About, Humberto Guardia, former vice president of the National Commission for the Defense of Competition, told Ámbito that the theory presented by the President “says that monopolies in the medium or long term create their own competition.” “The Austrian theory (which Milei follows) states that the monopoly comes to do something that was not done before,” he explained. However, he indicated that European countries and the United States “all have strong anti-trust organizations” and quoting Maynard Keynes said “in the long run we are all dead.”

If everything is maintained and there are no last minute changes in the area, when the new omnibus law is finished, the modifications will go to the Defense of Competition, which translate into a simplification and ease of processing permits and streamlining mergers. and company acquisitions.

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