Global enforcement priorities in vertical agreements

Name and the website of the competition authority

Australian Competition and Consumer Commission (ACCC)

Description of legal background

Australia’s competition laws are set out in the Competition and Consumer Act 2010 (Cth)

Relevantly, the Act includes prohibitions on:

• Cartel conduct
• Anti-competitive agreements
• Misuse of market power
• Resale price maintenance
• Exclusive dealing and third line forcing

Link to annual reports

ACCC and AER annual report 2019-20 | ACCC

ACCC and AER annual report 2020-21 | ACCC

ACCC and AER annual report 2021-22 | ACCC

Can participants to vertical agreements benefit from leniency?

A person may apply to the regulator for immunity from prosecution for cartel conduct under the ACCC Immunity and Cooperation Policy.

While the policy may cover vertical arrangements that constitute cartel conduct (as defined in the legislation), it does not extend to other competition law contraventions that involve vertical agreements (such as resale price maintenance or exclusive dealing practice).

To be considered for immunity, parties must apply to the ACCC who will assess the application against the policy to determine if immunity ought to be granted.

Key trends and developments or particular sectors of interest in relation to verticals. Impact of COVID-19, if any.

Limited recent cases

While there have been few cases in the courts dealing with vertical arrangements in recent years, the ever-vigilant ACCC is likely to continue to thoroughly investigate such cases when they are brought to its attention.

By way of example, the ACCC recently brought proceedings against ‘Peters Ice Cream’, in which the Federal Court awarded penalties of 12 million AUD for anti-competitive conduct, relating to agreements for the exclusive distribution of ice creams sold in petrol stations and convenience stores (discussed further below).

In recent cases the parties have admitted to the contravening conduct and put a joint penalty to the Court. However, this may change going forward as the regulator continues to push for higher penalties.

Maximum penalties have increased

In late 2022, the Australian Parliament passed changes to the Australian competition legislation, increasing the maximum penalties for anticompetitive conduct in Australia five-fold.

Off the back of these changes, we expect to see the regulator continuing to push for higher penalties when contraventions involving vertical restraints are brought before the courts.

Regulator enforcement priorities

Each year the ACCC releases its compliance and enforcement priorities for the year.

The 2023-24 priorities put vertical restrictions clearly in the regulator’s sites with ‘exclusive arrangements by firms with market power that impact competition’ as one of its 13 target areas for enforcement.

The regulator also identified ‘competition and consumer issues in global and domestic supply chains, with a focus on transport and logistics’ as a focus area – an industry with a high number of vertical arrangements by its nature.

Recent cases

ACCC v Peters Ice Cream (2022)

In March 2022 the Federal Court ordered that Australasian Food Group, trading as Peters Ice Cream, pay a AUD12 million penalty for anti-competitive conduct, relating to the distribution of ice creams sold in petrol stations and convenience stores, in proceedings brought by the regulator.

Peters Ice Cream is an Australian ice cream manufacturer and a subsidiary of British global ice cream manufacturer Froneri. Peters Ice Cream manufactures various single serve ice creams and tub and multipack ice cream products. It is one of the two major manufacturers of single serve ice creams that are sold in petrol stations and convenience stores.

PFD is Australia’s largest distributor of single serve ice creams and is able to reach more than 90 per cent of Australian postcodes.

Peters Ice Cream admitted that, from November 2014 to December 2019, it acquired distribution services from PFD Food Services on condition that PFD would not sell or distribute competitors’ single serve ice cream products in various geographic areas throughout Australia without the prior written consent of Peters Ice Cream.

Peters Ice Cream admitted that in doing so, it had engaged in exclusive dealing conduct that had the likely effect of substantially lessening competition in the market for the supply by manufacturers of single serve ice cream and frozen confectionary products.

In the relevant period PFD was approached by manufacturers of ice cream to distribute new single serve ice cream products to some national petrol and convenience retailers in competition with Peters. However, PFD advised that it could not distribute those products due to its exclusivity arrangement with Peters. Peters Ice Cream admitted, that if PFD had not been restricted from distributing other manufacturers’ ice cream products, it was likely that one or more potential competitors would have entered or expanded in this market.

Peters admitted that it had contravened the Competition and Consumer Act and made joint submissions with the ACCC in respect of penalties and orders.

ACCC v B & K Holdings (Qld) Pty Ltd (2021)

In March 2021 the Federal Court ordered wholesale distributor B & K Holdings (QLD) Pty Ltd, trading as FE Sports, to pay a AUD350,000 penalty after it declared by consent that FE Sports engaged in resale price maintenance in relation to cycling and sporting products.

The Court declared that between February 2017 and June 2019 FE Sports provided 328 agreements to existing or prospective dealers containing terms prohibiting the dealer from advertising or promoting certain brands of products online for less than the recommended retail price (RRP). FE Sports entered into 242 of those agreements with dealers.

The agreements were for supply of bicycle accessories and sporting products by the brands Wahoo, Pirelli, 100%, 3T and Stages. In total, 246 dealers were affected.

FE Sports admitted liability and made joint submissions to the Federal Court with the ACCC, including on penalty.

ACCC v Ramsay Health Care (2020)

In 2020 the Federal Court dismissed a case by the regulator alleging that Ramsay Health Care had misused its market power and engaged in exclusive dealing.

Ramsay operates Baringa Private Hospital, the only private hospital in Coffs Harbour. In 2015, Ramsay also operated Coffs Harbour Day Surgery, the only private day surgery in Coffs Harbour at that time.

The ACCC alleged that senior Ramsay executives told a group of surgeons planning to establish a competing private day surgery facility in Coffs Harbour that their access to operating theatre time at Baringa Private Hospital would be substantially reduced or withdrawn if they proceeded with their plans.

The Court found that there was not sufficient evidence Ramsay made the alleged threats to surgeons. While the case was ultimately dismissed, it illustrates that the regulator will not hesitate to take cases, even where they are of an uncertain nature. Even where cases are successfully defended, the costs of complying with an ACCC investigation and defending a case can be substantial.

Key contact: John Fogarty, Simon Uthmeyer

Last updated: November 2023

Name and the website of the competition authority

The Administrative Council for Economic Defence (CADE) is the agency responsible for handling and enforcing the laws governing vertical agreements and the conduct of dominant firms. CADE’s structure is divided into three departments: the General Superintendence (GS) (investigative body); the Department of Economic Studies (DEE) (technical body), and the Tribunal (the ruling body). 

View website

Description of legal background

The Brazilian Antitrust Law (No. 12,529/2011) covers all areas of antitrust in Brazil, including a pre-merger review system and the prosecution and punishment of anti-competitive conduct, and leniency and settlement programmes. 

With regard to anti-competitive conduct, the Brazilian Antitrust Law determines that any practice aimed at and/or with the potential effect of jeopardising competition (Article 36) constitutes an antitrust infringement subject to penalties. However, it does not define vertical restraints.

Since CADE has not yet issued any regulation that sets out criteria for the economic assessment of the positive and negative effects of such conduct, it has based its decision-making process primarily on Resolution No. 20/1999, which is rather generic and outdated.

Although past rulings issued by the authorities are also an important source of guidance when it comes to vertical restraints, the CADE Tribunal commissioners are not bound by past decisions when evaluating new cases, meaning that they are completely free to form their own opinion in ruling on a case, based on the specificities thereof, within the boundaries provided by the legislation.

The Brazilian Antitrust Law also foresees the possibility of filing claims for damages with respect to anti-competitive conduct, such as certain vertical restraints. Article 47 indicates that injured parties “may take legal action in defence of their individual interests or individual homogeneous interests, so that the practices constituting violations to the economic order cease, and compensation for the losses and damage suffered be received, regardless of the investigation or administrative procedure, which will not be suspended due to the filing of court action”.

An important recent development was the passing of Law No. 14,470/2022 in November 2022, promoting changes to the Brazilian Antitrust Law, particularly with regard to the private prosecution of antitrust issues in Brazil. The law introduces the right to double compensation for third parties in connection with damage caused by anti-competitive conduct (double compensation), but it exempts from double compensation companies that have signed leniency agreements or settlements with CADE. It also sets a five-year limitation period for private damage actions, which starts to run from the publication by CADE of the final judgment of the related administrative proceedings.

Link to annual reports

CADE’s Annual Report for 2022

Can participants to vertical agreements benefit from leniency?

Participants in vertical agreements cannot benefit from leniency, but a Cease and Desist Agreement can be negotiated with CADE upon the following conditions: (i) the defendant undertakes to cease the investigated activity, or its harmful effects, and makes any other undertakings deemed applicable; and (ii) the defendant will pay specific fines if it fails comply with its undertakings; and (iii) fines will be paid to the Diffuse Rights Defence Fund (when applicable – only when related to cartel practices).

Historically, CADE’s investigations more often end in settlement agreements than in fines. In 2020, CADE collected BRL140.9 million through settlement agreements while it imposed BRL138.4 million in fines. In 2021, this scenario changed. CADE collected BRL1.3 billion in fines for antitrust infringements versus BRL58.8 million collected through settlement agreements. In 2022, CADE collected BRL724.2 million through settlement agreements while it imposed BRL1.8 billion in fines.

Key trends and developments or particular sectors of interest in relation to verticals. Impact of COVID-19, if any.

In recent years, CADE has increased its efforts to investigate potential anti-competitive effects arising from exclusive deal arrangements and exclusivity clauses. As a result, CADE has confirmed that exclusivity clauses are not illegal per se and must be assessed under the rule of reason approach, taking into account the legitimacy of the economic rationale behind the exclusivity.

Recent cases

The following recent cases involving exclusivity agreements and alleged discriminatory practices against rivals are worth highlighting:

1) Administrative Inquiry No. 08700.004136/2020-65

On 21 September 2022, CADE ratified a Cease-and-Desist Agreement with Gympass concerning alleged anti-competitive conduct in the Brazilian sector of health club aggregator platforms. CADE investigated whether the firm was abusing its dominant position on the market by using clauses that allowed it to control the minimum price offered by businesses that use its platform ― and thus securing the prices in Brazil, and by using exclusivity clauses in contracts.

According to the terms of the Agreement, Gympass’s exclusivity clauses with the affiliated gyms are to answer to the proof of efficiency and correspond to a maximum of 20% of its base of gyms in cities or districts. The Agreement also prohibits the use of advantage clauses (like Most Favoured Nation clauses) and any clauses that prevent its business partners from using other aggregator platforms once their contracts with Gympass have expired.

In the case of unilateral conduct, concluding Cease-and-Desist Agreements is especially beneficial since it immediately ends the alleged antitrust violation.

2) Administrative Inquiry No. 08700.001992/2022-21

In March 2022, a complaint was filed with CADE (together with a preliminary injunction request) against the beverage company Ambev concerning the possible abuse of a dominant position through exclusivity requirements with cold beer sale points (in bars, restaurants and nightclubs), which could close the market to competitors and limit consumer choice.

In October 2022, CADE confirmed the granting of the injunction to prevent Ambev from executing or renewing exclusivity agreements with bars and restaurants in certain regions in which it holds a market share equal to or above 20%, and also for other regions in which it could potentially hold a significant market share, until the end of 2022. 

3) Administrative Inquiry No. 08700.003211/2016-94

In September, GS closed an Administrative Inquiry which had been opened after a complaint by Yelp, a local company that provides search services for commercial establishments, to investigate the possible abuse of dominant position by a search engine provider by diverting user traffic in favour of its own search services. 

GS concluded that the elements available did not prove the existence of anti-competitive conduct, ruling out the understanding that the prominent position of  organic search could be considered an essential input for local search engines. 

GS concluded that investigated search engine results occupy a limited space, being inaccessible to all agents who wish to appear in the top positions.

4) Administrative Inquiry No. 08700.001797/2022-09

GS opened an investigation against Ifood based on a complaint filed by Associação Brasileira das Empresas de Benefícios ao Trabalhador (ABTT) alleging that Ifood would be using a database obtained from its activities in the digital platforms market to prospect its business in the benefit voucher market, as well as using revenues earned in the digital ready-meal delivery platform to finance discounts and other advantages for corporate clients in the benefit voucher market (cross-subsidy).

After investigating ABBT's allegations, GS concluded that there was no evidence that the iFood platform operates as a gatekeeper for benefit voucher operators, given that the value of benefit vouchers spent on the platform is insignificant in relation to the total benefit voucher market. GS also assessed that there was no evidence that iFood discriminates against its competitors in the benefit voucher market. 

One of the members of the CADE Tribunal requested a review of the case, and it was referred back to GS in order to investigate further discrimination against iFood’s competitors on the iFood platform and self-preference. The case is still ongoing. 

Key contact: Luciana Martorano

Last updated: November 2023

Name and the website of the competition authority

Competition Bureau Canada

Description of legal background

There are no requirements under the Competition Act for vertical agreements to be pre-approved by the Competition Bureau, although vertical agreements may be reviewed under the civil (reviewable matters) provisions of the Competition Act.

There are no block exemptions available, but advisory opinions may be sought in certain circumstances.

There are a few general exemptions from the application of the Competition Act. Provisions in the Competition Act relating to price maintenance, exclusive dealing, tied selling and market restriction do not apply where the supplier and the customer are affiliated.

Competition Act s. 76-79

Link to annual reports

Competition Bureau Performance Measurement & Statistics Report

Can participants to vertical agreements benefit from leniency?

No.

Vertical agreements between suppliers and customers are not assessed under the criminal conspiracy provisions of the Competition Act. As such, the Immunity and Leniency Programs, which are available to parties involved in a horizontal criminal conspiracy, do not apply to participants to a vertical agreement.

Key trends and developments or particular sectors of interest in relation to verticals. Impact of COVID-19, if any.

Key trends and developments

In May 2021, the Bureau issued updated Competitor Collaboration Guidelines, reaffirming its position that purely vertical agreements between suppliers and customers fall under the civil reviewable matters provisions, not under the criminal conspiracy provisions of the Competition Act. However, if vertical arrangements involve competitors conspiring to fix prices, allocate markets, or restrict product supply, they may be subject to such criminal provisions.

In 2022, the Bureau established a Digital Enforcement and Intelligence Branch, demonstrating its continued commitment to enforcement in digital space.

Sectors of interest

The Competition Bureau has been particularly concerned with industries that significantly affect Canadians, notably in the health care sector and digital space.

Legislative Amendments

On June 23, 2022, the Competition Act was amended. The amendments including the following changes to the abuse of dominance provisions, which may apply to vertical agreements and practices:

• introducing a private right of access to the Competition Tribunal (with leave);
• codifying and expanding what is an “anticompetitive act”
  • g. a selective or discriminatory response by a dominant player to make it more difficult for a competitor to enter a market or grow, or to remove a competitor from a market;
• adding new factors for the Tribunal to consider when assessing ‎competitive effects of a conduct;
• raising the maximum Administrative Monetary Penalties allowing for up to three times the benefit gained from the anti-competitive conduct or, if that cannot be reasonably determined, up to 3% of annual global revenues.

Starting in November 2022, the government conducted a broad consultation on further amendments, receiving 130 submissions. In September 2023, the government signaled that it would seek an amendment addressing restrictive covenants used by major grocers in the retail grocery sector. In the Bureau’s June 2023 report on its market study of this sector, the Bureau identified such covenants as an impediment to competition.

Impact of COVID-19

The Competition Bureau focused on identifying and preventing anti-competitive conduct affecting global and domestic supply chains in light of pandemic-related disruptions to global markets.

Recent cases

In March 2023, the Bureau entered into a Consent Agreement with Isologic Innovative Radiopharmaceuticals, Ltd. (Isologic) to change some of the company’s contractual clauses that the Bureau contended contravened the abuse of dominance provisions.

Pursuant to the Agreement, except with hospital buying groups, Isologic is restricted from entering into new contracts that contain specific terms, including:

• requiring customers to purchase certain products exclusively from Isologic;
• mandating minimum purchase quantities of certain products as a percentage of total purchases; and
• implementing restrictive auto-renewal clauses.

While hospital buying groups are allowed to include these terms in their requests for proposals, Isologic cannot induce hospital buying groups to include these terms in the requests for proposals.

The Agreement is set to remain in effect for the next 10 years. This Agreement demonstrates that the Bureau has reaffirmed its commitment to promoting competition within the Canadian healthcare sector.

Key contact: Kevin Wright

Last updated: November 2023

Name and the website of the competition authority

The National Economic Prosecutor’s Office (FNE) and Competition Court (TDLC).

Description of legal background

Decree Law No. 211 of 1973 seeks to promote and defend competition.
Internal Guidelines on Leniency in Cartel Cases.
Vertical Restraints Guidelines of 2014 state that vertical restraints should be analysed on a case-by-case basis and probably do not produce anticompetitive effects when both parties have a market share below 35% in the vertical related markets (where the product is sold and purchased). 

Link to annual reports 

Can participants to vertical agreements benefit from leniency?

Every year, the FNE carries out a public account process in which it discloses the main milestones and results of its management, making public relevant information about its policies, programmes, actions and budget.

Every year or half-year, the FNE prepares a report with a summary of the results obtained in the area of rulings obtained in injunctions filed before the courts.

Key trends and developments or particular sectors of interest in relation to verticals. Impact of Covid-19, if any.

• The FNE has conducted investigations into digital platforms and delivery apps, especially since Covid-19.
• The FNE has conducted investigations in the gas market.
• The FNE has conducted investigations in the energy market.
• No special impact of Covid-19 in the investigations on verticals.

Recent cases

FNE investigation in the electricity industry (2016)¹

(Change of conduct agreement with the FNE in 2022).

The investigation was initiated ex officio based on the observation that in the electricity industry (involving the companies Chilquinta, Engie, Enel Distribución, Enel Generación and AES Gener) it was difficult for smaller customers who were not subject to price regulation to obtain competitive supply contracts because they lacked bargaining power. This could result in the imposition of abusive contractual clauses on such customers.

It was confirmed during the investigation that in contracts entered into by certain electricity generation and distribution companies with some smaller customers, or those not subject to price regulation, the existence of contractual clauses to equalise the rates of competition or "meeting competition clauses".

The case was closed in April 2022 after the companies involved agreed to change their conduct. They proposed several measures to prevent the anti-competitive risks of the clauses from materialising: (i) with regard to contracts already entered into, the companies committed to adopt unilateral waiver measures and/or renegotiate the contracts, and (ii) the companies agreed not to incorporate an English clause or price matching clause with free or eligible customers in future contracts.

Supermarket case (2016)²

(Cartel enforced through vertical restraints, sanctions imposed in 2020).

The country's main supermarket chains - Cencosud, SMU and Walmart - executed an agreement in the fresh chicken meat market to fix minimum resale prices in their promotional prices, through their poultry suppliers, between 2008 and 2011. The TDLC condemned all the supermarkets.

In 2019, the supermarkets appealed against the ruling issued by the TDLC, and in 2020, the Supreme Court upheld the ruling and fined the supermarkets.

Cencosud was fined 11,532 Annual Tax Units (UTA), which is approximately EUR 9.7 million; SMU was fined 6,876 UTA (approx. EUR 5.8 million), and Walmart was fined 11,160 UTA (approx. EUR 9.4 million), all for tax benefits.

The Supreme Court disagreed with the criteria used by the TDLC in its ruling for setting the fines, doubling their amount. The cartel was created through vertical restraints. The poultry suppliers were not fined, because they had already been fined for a collusive practice two years before, that motivated this conduct in the supermarkets.

Canal del Futbol (CDF) case

(Vertical restraint imposed on TV cable operators by the holder of the transmission rights to the national football tournament, claimed by the FNE in 2020 – not decided yet).³

CDF has the entire rights to transmit the national football cup and it negotiates with every TV cable operator. It offers a basic “radio” channel that does not show live football matches, but just shows the crowd in the stadium and provides a commentary on the match, and a HD channel or premium version of the same channel, which allows full access to every live and recorded match of the national football tournament. According to the FNE, there are four practices that conjointly limit competition between the cable operators: (i) CDF controls and limits all promotions; (ii) CDF restricts the minimum price that a cable operator can charge; (iii) CDF imposes a different target on every cable operator in terms of the minimum number of customers that it must have; and (iv) CDF demands that the customers of every operator have access the basic channel, even if they don’t want it.

The FNE has asked the TDLC to instruct CDF to stop the practices and impose a USD 24 million fine on CDF.

The case is still pending before the TDLC.

Key contact: Sofía O’Ryan

Last updated: November 2023

Name and the website of the competition authority

Superintendencia de Industria y Comercio, “SIC”
(Office of Superintendence of Industry and Commerce)

Description of legal background

Competition law is regulated in the following: 

• Law 155 of 1959.
• Decree 2153 of 1992. 
• Law 1340 of 2009.
• Decree 1074 of 2015.

In particular: 

• Regulation on vertical restraints (anti-competitive agreements): Article 47 of Decree 2153. 
• Regulation on vertical restraints (unilateral conduct): Articles 48 and 50 of Decree 2153.
• Regulation on block exemptions: the paragraph of the first Article of Law 155; Article 46 of Decree 2153, and Article 5 of Law 1340.
• Leniency programme: Article 14 of Law 1340 and Chapter 29 of Decree 1074. 

Link to annual reports

Office of Superintendence of Industry and Commerce

Can participants to vertical agreements benefit from leniency?

Yes. A participant of any anti-competitive agreement (either vertical or horizontal) may apply to Colombia’s leniency programme.

Key trends and developments or particular sectors of interest in relation to verticals. Impact of COVID-19, if any.

As part of the actions taken to combat the sanitary and economic emergency caused by the COVID-19 pandemic, Decree 482 of 2020 was issued. 

Under this decree, a Logistics and Transportation Centre (Centro de Transporte y Logística) was created. Alongside other faculties, this Centre was allowed to analyse and authorise the collaboration agreements between those that needed cargo moved and transportation companies, in particular to ensure that essential goods were delivered. 

This Centre is now a permanent addition to the Ministry of Transportation as a tool to accompany and guarantee the correct and efficient transportation of essential goods in all of Colombia’s territory. 

Recent cases

There have been no cases concerning vertical agreements in Colombia in the period 2020-23. 

Key contact: María Claudia Martínez Beltrán

Last updated: November 2023

Name and the website of the competition authority

Israel Competition Authority

Description of legal background

Several types of block exemptions:

• block exemptions for non-horizontal agreements with no price restrictions, which do not contain market share thresholds
• block exemptions for exclusive distribution/exclusive supply/franchising agreements/joint ventures, which include:
  • market share thresholds; and
  • certain additional specific criteria.

de minimis block exemption:

• combined market share thresholds of up to 15%; and
• certain additional specific criteria

If outside the block exemptions - individual notification and authorisation process available.

Economic Competition Law

Link to annual reports

Annual Report on Competition Policy Developments in Israel

The 2019 report is the most recent report in English (there are more updated reports in Hebrew).

Can participants to vertical agreements benefit from leniency?

No. An immunity programme is reserved only for horizontal anti-competitive agreements.

Key trends and developments or particular sectors of interest in relation to verticals. Impact of COVID-19, if any.

The 2017 policy was recently replaced with a new policy published in February 2023 - below is a summary of the new policy:

A policy statement of the Antitrust Authority published in February 2023 stated that RPM Fixed Prices and RPM Minimum Prices may only be exempted under the current block exemptions provided that the following cumulative conditions are met:

• the RPM arrangement does not limit competition in a significant portion of the market or, if they do, they do not have a significant influence on the competition in the market; and
• the essence of the RPM arrangement is not reducing or preventing competition, and it does not include provisions which are unnecessary for its execution.

When analysing the two cumulative conditions, the conclusion is that such RPM arrangements will fail to meet them unless they can bring about significant and substantial improvements in the sale and customer services which cannot be reasonably achieved by other, less restrictive means, and also provided that such improvements exceed the probable restriction on competition. The policy states that, as a rule, when the competition in the relevant market is more fierce, the probability that the pro-competitive benefits of such RPM arrangements will overcome the restriction of competition is higher.

As for maximum RPM, in general, such arrangements may have a certain pro-competitive effect but they should be evaluated on a case-by-case basis to verify that they have not turned into a de facto RPM fixed arrangement.

A policy statement regarding the Antitrust Authority’s considerations in determining the size of penalties was published in October 2016 and includes the following provisions: 

With regard to corporations: after determining the maximum possible penalty under the law, the Authority evaluates the severity of the offence.

The first criterion to be examined is the harm to the competitive market and its impact on the public and the market.

Another criterion is the duration of the breach.

The third criterion is the specific circumstances of the breach. This criterion can lower the penalty by 50% or increase it by 20%.

The fourth criterion is the external circumstances that are related to the breach: for example, former breaches may lead to an increase of up to 30% of the penalty.

With regard to individuals: in general, the Authority will impose penalties on an officer of a breaching corporation who has been identified as performing the breach or responsible for

its performance, only if the breach has the potential to materially harm competitiveness in the market. In the event the breaching party is a person who managed a non-incorporated business, the breach does not have to have such a potential. The sum of the penalty is calculated based on the person’s salary, the severity of the breach, the potential it has to harm competition, the specific circumstances, and the external circumstances. If the amount of time between the end of the breach and the moment the breach was discovered is at least three years, there may be a decrease of 20% in the penalty.

If the person has a personal interest in the breach, the penalty may be increased by 15%.

In January 2019, the Israeli Antitrust Law was amended in order to strengthen antitrust enforcement. Among the changes made was an increase in the maximum penalty under the law to ILS 100 million. In addition, the names of the Antitrust Authority and the Antitrust Law were changed to the Economic Competition Authority and the Economic Competition Law.

In recent years, the Authority has seen an increasing trend towards self-assessment. In 2018, the Authority published amendments to two block exemptions, one of which is the block exemption for Joint Ventures, in which an option for self-assessment was added. Such amendments allow the parties to inspect by themselves whether they are in compliance with the requirements of the Antitrust Law, by determining whether the following cumulative conditions exist in their case, based on past interpretation of such conditions in case law, decisions and studies: (i) the objective of the arrangement is not to reduce or eliminate competition, and the arrangement does not include any restraints which are not necessary to fulfil its objective, and (ii) the restraints in the restrictive arrangement do not limit competition in a considerable share of a

market affected by the arrangement, or if they are liable to limit competition in a considerable share of such market, they are not sufficient to substantially harm the competition in that market.

[As far as we know, and in the light of our review, no significant changes have occurred during such time as far as vertical arrangements are concerned. We are reviewing the issue once more to make sure that there is nothing else worthwhile mentioning, and will update you accordingly].

Recent cases

The Tnuva case (September 2018)

The Economic Competition Authority investigated Tnuva (the largest food conglomerate in Israel, with a significant market share in the dairy produce market) for six years. Tnuva was under suspicion of dictating prices to major retail chains. Following the investigation, the Antitrust Authority and Tnuva signed a settlement order in which Tnuva agreed to pay ILS25 million (and two of its officers would pay ILS75,000 each). According to the settlement,

Tnuva admitted that it has been dictating the prices of certain products to major retail chains, and that this constitutes restrictive arrangements. The Economic Competition Authority agreed not to file criminal charges against Tnuva or any of its officers in this matter.

ARGENTOOLS Case (July 2022)

Argentools is an importer of work tools and is the exclusive importer of MAKITA brand tools(Makita). In July 2022, the Economic Competition Authority determined that Argentools was a party to unlawful restrictive vertical arrangements with its MAKITA retailers, under which Argentools dictated minimum resale prices (RPM minimum price) to its retailers and initiated and organised the secession of its retailers from their publication in one of the most popular price comparison sites in Israel in order to reduce Makita’s inter brand competition.

The Economic Competition Authority fined Argentools approximately NIS5.5 million and fined three of its officers a total of approximately NIS850,000.

In its decision, the Economic Competition Authority considered, among other things, Argentools’ market power and the fact that Argentools tried to prevent parallel import at the time.

No appeal was filed.

In this unprecedented decision, the Economic Competition Authority determined that in an online market (click-to-buy), restrictions on internet published prices constitute restrictions on sale prices. 

Energym Consent Decree (December 2022)

Energym, an importer of sports equipment, signed a Consent Decree with the Director-General of the Economic Competition Authority in December 2022, under which Energym admitted that it had violated the Economic Competition Law by entering into vertical restrictive arrangements with its retailers. Under the arrangements, Energym interfered with the minimum prices for its products published and used by its retailers. The fine imposed under the Consent Decree was NIS1.65 million.

Key contact: Tal Tsuk

Last updated: November 2023

Name and the website of the competition authority

Federal Economic Competition Commission (Comisión Federal de Competencia Económica; COFECE)

Federal Institute of Telecommunications (Instituto Federal de Telecomunicaciones; IFT), which is the competent authority exclusively in relation to the broadcasting and telecommunications sectors in Mexico

Description of legal background

The Federal Economic Competition Law regulates vertical restraints. It is available here.

Link to annual reports

COFECE 2022

COFECE 2021

COFECE 2020

Can participants to vertical agreements benefit from leniency?

No. The leniency programme in Mexico only applies to cartels (absolute monopolistic practices). However, there is a similar process whereby sanctions may be dispensed or reduced in cases of the abuse of dominance. To be entitled with such benefit, the business entity in question must appear before COFECE or the IFT at any time during the investigation period, but in any case before the issuance of a statement of probable responsibility (i.e. the Statement of Objections) to express in writing its intention to apply for the exemption and reduction in the fine.

Key trends and developments or particular sectors of interest in relation to verticals. Impact of COVID-19, if any.

In the last few years, both authorities, the IFT and COFECE have had an interest in digital markets.

COFECE has initiated:

• an investigation of the abuse of dominance in the market for the development, distribution and payment processing of mobile applications and digital content, as well as related services; and
• an investigation of the abuse of dominance in the market related to e-commerce platforms.

The IFT has initiated:

• an investigation (based on a complaint) of the abuse of dominance in the market of app stores of mobile operating systems and their related markets, as well as the distribution of audiovisual content through internet platforms.
• an investigation (based on a complaint) of the abuse of dominance in the market of App Stores for mobile operating systems and related markets.

Additionally, during the COVID-19 crisis, COFECE announced that collaboration agreements between business entities in the context of the sanitary contingency will be supported by law and will not be subject to investigation and/or persecution. Such agreements had to be temporary and aimed at maintaining or increasing the supply of goods and services, meeting demands, protecting supply chains, and preventing shortages or the hoarding of products, and they should not have had as their purpose fostering the participation of other competitors selling goods or services in a relevant market. This was applicable to any collaboration agreement entered into either between competitors or between business entities that are not competitors, and it is important to distinguish between collaboration agreements and mergers that needed to be notified in accordance with relevant thresholds and criteria set forth under the Mexican Antitrust Law. This was not a waiver to allow collaboration agreements, since such agreements are not prohibited per se. What COFECE acknowledged in this case is that due to the situation caused by COVID-19, it was possible to temporarily enter into agreements of this kind. However, the lack of precision in the abovementioned announcement led us to carry out an analysis on a case-by-case basis.

Recent cases

1) COFECE fines Mexico City’s International Airport (AICM) (2022)

In 2022, COFECE fined AICM for preventing a business entity from providing federal public transportation services and establishing exclusive advantages in favour of two permit holders. Through various actions, AICM improperly refused to provide Transportación Terrestre UNE (UNE) with access to the airport and thus prevented it from offering passenger transportation services from the airport to Puebla and from Puebla to the airport, establishing exclusive advantages in favour of two permit holders on that same route, which isolated them from competition to the detriment of users.

COFECE imposed a fine of MXN848.8 million (approximately EUR42 million) on AICM, accusing it of being a repeat offender in monopolistic practices (the abuse of dominance) and ordered it to eliminate the anti-competitive practice.

COFECE’s Plenum ordered AICM to eliminate the anti-competitive practice and to do the following:

• Justify the opinions issued based on Article 47 of the Federal Law of Roads, Bridges and Transportation (Ley de Caminos, Puentes y Autotransporte Federal) for the entry of a new operator, or for the increase of the vehicle fleet to existing permit holders, based on technical and non-discriminatory considerations, stating the reasons, motives and circumstances it deems applicable.
• Guarantee access to the airport, both for UNE, if it is still interested and applies for it again, as well as for other business entities that obtain or have obtained a permit granted by the Ministry of Infrastructure, Communications and Transportation (Secretaría de Infraestructura, Comunicaciones y Transportes) for the provision of trucking services at the airport, as long as they comply with the requirements, which must be applied in a non-discriminatory manner.

For more information, please refer to COFECE’s resolution available at: https://www.cofece.mx/CFCResoluciones/docs/Asuntos%20Juridicos/V353/0/5685580.pdf

2) COFECE closes an investigation of abuse of dominance in the market for the commercialisation, storage and transportation of petroleum products in Mexico, as well as services related thereto (2022)

In 2018, COFECE opened an investigation on the possible commission of relative monopolistic practices (abuse of dominance) in the market for the commercialisation, storage and transportation of petroleum products in Mexico, as well as services related thereto.

The investigation was primarily focused on Pemex Transformación Industrial, a subsidiary of Pemex (Petróleos Mexicanos; the Mexican state-owned petroleum company managed and operated by the Mexican government), as it presumed Pemex had engaged in the abuse of dominance (i.e. the establishment of different prices or conditions for sale or purchase by different buyers or sellers in equivalent conditions) and had market power in the aforementioned markets.

However, in 2022, COFECE closed the investigation as there was insufficient evidence to prove this conduct.

For more information, please refer to COFECE’s resolution available at: https://www.cofece.mx/CFCResoluciones/docs/Asuntos%20Juridicos/V355/1/5837996.pdf

3) COFECE closes an investigation on the abuse of dominance in the market for e-commerce platform services in Mexico and services related thereto (2020)

While not a vertical agreement per-se, in 2017, COFECE opened an investigation on the possible commission of relative monopolistic practices (abuse of dominance) in the market of electronic commerce platform services in Mexico and services related thereto.

The investigation focused only on Mercado Libre (a company from Argentina dedicated to e-commerce in Latin America) and its fintech subsidiary Mercado Pago (an online payment collection platform) and, specifically, on whether Mercado Libre conditioned the use of its marketplace to the use of its transactional service “Mercado Pago”.

In 2020, after almost three years of conducting an investigation for the alleged commission of relative monopolistic practices in the e-commerce market in Mexico, COFECE closed the investigation as there was insufficient evidence to prove this conduct.

For more information, please refer to COFECE’s resolution available here.

Key contact: Jorge Benejam

Last updated: November 2023