Submitted by the OAS Trade Unit to the FTAA Working Group on Competition Policies

Peru: Report on Developments and Enforcement of Competition Policy and Laws (1995 - 1996) (Continued)

Summary of Rulings

Ruling No. 001-95-CLC
* Independent investigation into the company INCAMOTORS S.A. for alleged violations of the provisions of Legislative Decree No. 701, namely, the fixing of the price of fuel.
* The Commission ordered that the records of the case should be placed on file.

Ruling No. 002-95-CLC
* Independent investigation into the company SURMOTORS S.A. for alleged violations of the provisions of Legislative Decree No. 701, namely, the fixing of the price of fuel.
* The Commission ordered that the records of the case should be placed on file.

Ruling No. 003-95-CLC
* Independent investigation into the District Municipality of Socabaya for alleged violations of Legislative Decree No. 776, namely, the collection of tolls.
* The Commission decided not to investigate further.

Ruling No. 004-95-CLC
* Independent investigation launched against the Provincial Municipality of Camaná for alleged violations of the provisions of Legislative Decree No. 776, namely, the collection of tolls.
* Commission found that grounds existed for the independent investigation which it had launched.

Ruling No. 005-95-CLC
* Complaint lodged by the Premix Concretera S.A. Company against the Municipality of Metropolitan Lima for alleged violations of the provisions of Legislative Decree No. 776, namely, the imposition of licensing fees for announcements and advertisements.
* Commission found that grounds existed for the complaint.

Ruling No. 006-95-CLC
* Complaint lodged by the Empresa Periodística Nacional S.A. against the Municipality of Metropolitan Lima for alleged violations of Legislative Decree No. 776, namely, the imposition of licensing fees for announcements and advertisements.
* The Commission found that grounds existed for the complaint.

Ruling No. 008-85-CLC
* Request for the issue of a warning submitted by the company Empresa Superconcreto del Peru S.A. in the case brought against the executive management of the CHAVIMOCHIC project for alleged unjustified discrimination in the criteria attached to Public Tender No. 004-94-INADE/8401 for the supply of prestressed concrete pipes.
* Commission found that there were no grounds for the issue of a warning.

Ruling No. 009-95-CLC
* Appeal for review of Ruling No. 008-95-CLC, in which the Commission found that no grounds existed for the issue of a warning, lodged by the company Empresa Superconcreto del Peru S.A. in the case brought against the executive management of the CHAVIMOCHIC project for alleged unjustified discrimination in the criteria attached to Public Tender No. 004-94-INADE/8401 for the supply of prestressed concrete pipes.
* Commission found that the appeal was without merit.

Ruling No. 010-95-CLC
* Request for rectification of material error in ruling 006-95-INDECOPI/CLC presented by the company Empresa Periodística Nacional S.A. (EPENSA), on 13 March 1995, in the case brought against the Municipality of Metropolitan Lima for violation of Legislative Decree No. 776, namely, the unlawful imposition of licensing fees for announcements and advertisements.
* The Commission decided to clarify its Ruling No. 006-95-INDECOPI/CLC.

Ruling No. 012-95-CLC
* Appeal for review of Ruling No. 023-94-INDECOPI/CLC lodged by the company Fábrica Peruana Eternit S.A. in connection with the complaint brought for abuse of dominant market position by the Water Supply Improvement Board of the District of La Molina.
* The Commission found that the appeal was without merit.

Ruling No. 013-95-CLC
* Complaint lodged by a group of residents of the District of Santa Rosa against the Municipality of Santa Rosa for alleged violations of Legislative Decree No. 776 for excessive fees for waste disposal.
* The complaint was declared inadmissible.

Ruling No. 014-95-CLC
* Complaint brought by Mr. Gerardo Castro Zapata on behalf of the Association of Dealers in Agricultural Products of Aguas Verdes for alleged violation of Legislative Decree No. 776, namely, the imposition of subsistence fees and charges for use of the market.
* The complaint was declared inadmissible.

Ruling No. 015-95-CLC
* Complaint brought by the entertainment company Chomin's Promotion S.R. Ltd against the Peruvian Association of Authors and Composers and the Peruvian Society of Authors and Composers for various infractions of the norms of free competition.
* The complaint was held to be partially grounded.

Ruling No. 016-95-CLC
* Complaint brought by the Mayor of Lambayeque against a group of bus owners in that city for alleged infraction of Legislative Decree No. 701, namely, the fixing of tariffs for the inter-city transport of passengers.
* The Commission found that there were grounds for the complaint.

Ruling No. 017-95-CLC
* Complaint lodged by Mr. Lucio Collazos and others against violations of Legislative Decree No. 776 by the Municipality of La Victoria, namely, the institution of fees for operating licenses and the high cost of such fees.
* The Commission found that there were no grounds for the complaint.

Ruling No. 018-95-C.C
* Complaint brought by Mr. Florencio Daga Salgado against the company Cemento Andino S.A. for alleged abuse of dominant position.
* Declared to be without merit.

Ruling No. 019-95-CLC
* Appeal for review of Ruling No. 033-94-INDECOPI/CLC lodged by Mr. Enrique Cespedes in the case brought against the Municipality of Surquillo for alleged violations of Legislative Decree No. 776, namely, the imposition of excessive excise taxes.
* The appeal was declared to be without merit.

Ruling No. 020-95-CLC
* Request by Hoteles Helvéticos S.A for a warning to be issued in the case brought against the Provincial Municipality of Lima, for violation of the provisions of article 61 of Legislative Decree No. 776.
* The Commission agreed to issue the warning.

Ruling No. 021-95-CLC
* Complaint lodged by the company Embotelladora Lima S.A, against the companies Embotelladora Lima S.A. and Servicios del Norte for alleged infractions of the provisions of Legislative Decree No. 701, namely, abuse of dominant market position and practices restricting free competition.

Ruling No. 022-95-CLC
* Complaint brought by the company Distribuidora de Cerveza La Victoria S.A. against the Mayor of the District Council of Punta Negra, Mr. Francisco Buitrón Huapaya and the companies Embotelladora Lima S.A. and San Nicolás Distribuidores S.A. for restrictive trading practices, namely, the attaching of unlawful conditions to the sale of beer and soda on the beaches of Las Pocitas and Punta Rocas.
* The complaint was held to be admissible.

Ruling No. 023-95-CLC
* Request for the rectification of a material error in Ruling No. 016-95-INDECOPI/CLC presented by the company Empresa Expreso del Norte S.R.L. on 20 June 1995, in the case brought against the transportation companies: Cooperativa de Transportes San Pablo, Empresa de Transportes Naylamp Express, Empresa de Transportes Lamnayeque Express S.R.L., Empresa de Transportes Brunning Express, Empresa Lambayeque Tours and Empresa Propietarios Unidos en Omnibus, for unlawful price fixing.
* Article 1 of Ruling No. 016-95-INDECOPI/CLC was rectified.

Ruling No. 024-95-CLC
* Complaint brought by the company Empresa Panamericana Television S.A. against the Municipality of Metropolitan Lima for alleged violations of the provisions of Legislative Decree No. 776, namely, the imposition of licensing fees for announcements and advertisements.
* The complaint was held to be admissible.

Ruling 025-95-CLC
* Complaint brought by the company Empresa Aries Producciones S.A. against the Municipality of Metropolitan Lima for alleged violations of the provisions of Legislative Decree No. 776, namely, the imposition of licensing fees for announcements and advertisements.
* The complaint was held to be admissible.

Ruling 026-95-CLC
* Claim filed by the Inca Cusco Bottling Company against the Cusco Manufacturing Company, the producer of Coca Cola and the body responsible to the Huancaro Fair (FONGAL), for alleged restriction of free competition by fixing marketing terms.
* The complaint was declared without merit.

Ruling 027-95-CLC
* Claim filed by the Frente Unico de Trabajadores Informales del Distrito de Pueblo Libre [United Front of Workers in the Underground Economy of the Pueblo Libre District], for alleged violations of Legislative Decree No. 776, for charging the "Sisa" fee and overcharging for health certificates.
* Complaint declared to be well-founded in part.

Ruling 028-95-CLC
* Claim filed by "The Golden Falcon" S.A. transportation company against the Provincial Municipality of Arequipa for alleged abuse of authority.
* The Commission abstained.

Ruling 029-95-CLC
* Complaint filed by the "Señor de la Ascensión de Cachuy" transportation company against the Cañete Provincial Council for alleged abuse of authority.
* The Commission abstained.

Ruling 030-95-CLC
* Complaint filed by the rapid service transportation company "Señor de la Ascensión de Cachuy No. 1" against the Municipality of Cañete and its Transportation Commission for abuse of authority, in that it had not allowed the complainant to participate in bidding for routes.
* The complaint was declared to be well-founded.

Ruling 031-95-CLC
* Standard investigation on the scope of possible fixing of prices for both bread and wheat flour.
* The Commission resolved to launch investigation.

Ruling 032-95-CLC
* Appeal for reconsideration of judgment submitted by the Wholesale Markets Company of Lima against Resolution No. 034-94-INDECOPI/CLC.
* The appeal for reconsideration of judgement without merit.

Ruling 033-95-CLC
* Official investigation instituted on alleged violation of Legislative Decree No. 701 by the Association of Bread-making Industries, and its representative, Gilberto Hinojosa Teves, for engaging in practices restricting free competition in the recommendation modality.
* It was decided to adopt the compromise suggested by Gilberto Hinojosa Teves and the Association of Bread Manufacturers.

Ruling 034-95-CLC
* Complaint filed by Parrillada a la Brasa Casablanca E.I.R.L. and the Casablanca Restaurant owned by Fernando Oyakawa Oyakawa against the Provincial Municipality of Lima, for charging a fee for the Advertising and Publicity Permit established by Edict No. 179-93-MLM.
* The complaint was declared to be well-founded.

Ruling 035-95-CLC
* Complaint filed by Hoteles Helvéticos S.A. against the Provincial Municipality of Lima, for alleged violations of the provisions of Legislative Decree No. 776 by charging a fee for the Advertising and Publicity Permit.
* The complaint was declared well-founded.

Ruling 036-95-CLC
* Complaint filed by Julio Oshiro Oshiro y Kamato "Casa Aki" and various others against the Municipality of Metropolitan Lima (MLM), for allegedly violating Legislative Decree No. 776, by charging a fee for the Advertising and Publicity Permit.
* The complaint was found to have merit.

Ruling 037-95-CLC
* Complaint filed by the company "CHOMIN'S PROMOTION S.R. Ltda." against the Union of Performance Artists of Peru et al for alleged abuse of authority in the market.
* The complaint was found to have merit.

Ruling 038-95-CLC
* Complaint filed by the Federation of Street Vendors of Barranco against the Municipality of Barranco for allegedly violating Legislative Decree No. 776, by charging a "sisa" fee, and official standard investigation of the Pacific Bottling Company S.A. (CEPSA) for a presumed violation of Legislative Decree No. 701.
* The complaint on collection of this excise tax on food products was declared to be well-founded, pursuant to the provisions of Legislative Decree No. 776. The official investigation of the alleged violation of Legislative Decree No. 701 was declared without merit.

Ruling 039-95-CLC
* Complaint filed by the Association of Beef Cattle Giblet Traders in Huaral Province against a Municipal Councilman of that Province, Carlos Medina Mercado, for alleged violation of Legislative Decree No. 701 consisting of abuse of authority by ordering a shutdown of the rotation system for the marketing of meat products, pursuant to Regulation No. 371-94-CLC; and an official investigation of the Suppliers' Association for price-fixing in violation of Article 6 of Legislative Decree No. 701.
* The official investigation of price-fixing was declared to be justified, and the abuse of authority charge to be without merit.

Ruling 040-95-CLC
* Complaint filed by the "J.U. Automotriz S.R.L." company against the Municipality of Jesús María, for allegedly violating Legislative Decree No. 776, by charging a fee for the Advertising and Publicity Permit.
* The complaint was declared to have merit.

Ruling 041-95-CLC
* Complaint filed by the Small Business of Solid Materials Workers S.R.L.--PETRAMAS, against the Provincial Council of Lima and the Municipal Services and Cleaning Company of Lima -ESMLL, for allegedly violating Legislative Decree No. 701, by monopolizing and restricting free competition in the end disposal of solid waste, as well as for alleged violations of Legislative Decree No. 776.
* The complaint on restrictive practices was declared to be justified, while the charge of violating Legislative Decree No. 776 was declared to be without merit.

Ruling 042-95-CLC
* Precautionary Measure requested by Pachacutec Construction and Distribution Company S.A. in the proceedings against the Provincial Municipality of Lima, for violating Legislative Decree No. 776, by charging a fee for the Advertising and Publicity Permit.
* The request for a precautionary measure was granted.

Ruling 043-95-CLC
* Complaint filed by Víctor Rojas and various other parties against the Municipality of Ate Vitarte, for charging a fee for the Advertising and Publicity Permit established through Edict No. 179-93-MLM.
* The complaint was declared to be well-founded.

Ruling 044-95-CLC
* Complaint filed by Merchants of Ate Vitarte against the Municipality of Ate Vitarte, for charging a fee for the Advertising and Publicity Permit established by Edict No. 179-93-MLM.
* The complaint was declared to be well-founded.

Ruling 045-95-CLC
* Complaint filed by the Andean Automobile Distribution Company S.A. against the Municipality of Santiago de Surco, for charging a fee for the Advertising and Publicity Permit established by Edict No. 179-93-MLM.
* The complaint was declared to be well-founded.

Ruling 046-95-CLC
* Complaint filed by the América Production and Distribution Company S.A. against the Municipality of San Borja for charging a fee for the Advertising and Publicity Permit established by Edict No. 179-93-MLM.
* The complaint was declared to be well-founded.

Ruling 047-95-CLC
* Official Investigation of the Wheat Mills Committee of the National Association of Industries and eighteen milling companies for allegedly fixing the prices of wheat flour.
* The official investigation was declared to have merit.

Ruling 048-95-CLC
* Complaint filed by Ladbroke Holdings of Peru S.A. against the Provincial Municipality of Lima, for charging a fee for the Advertising and Publicity Permit established by Edict No. 179-93-MLM.
* The complaint was declared to have merit.

Ruling 049-95-CLC
* Complaint filed by the Backus and Johnston Brewery S.A. against the Municipality of Metropolitan Lima, for charging a fee for the Advertising and Publicity Permit, established by Edict No. 179-93-MLM, amended by Edict No. 213-95-MLM.
* The complaint was declared to be well-founded.

Ruling 050-95-CLC
* Complaint filed by the "Baúl de la Felicidad S.A." company against the Municipality of Metropolitan Lima, for charging a fee for the Advertising and Publicity Permit, established by Edict No. 179-93-MLM, amended by Edict No. 213-95-MLM.
* The complaint was declared to be well-founded.

Ruling 051-95-CLC
* Complaint filed by "Alfonso Ugarte" Bakers S.A. against the Municipality of Metropolitan Lima, for charging a fee for the Advertising and Publicity Permit, established through Edict No. 179-93-MLM.
* The complaint was declared to be well-founded.

Ruling 052-95-CLC
* Complaint filed by the Backus and Johnson Brewery S.A. against the Municipality de Breña, for charging a fee for the Advertising and Publicity Permit established through Edict No, 179-93-MLM, amended by Edict No. 213-95-MLM.
* The complaint was declared to be well-founded.

Ruling 053-95-CLC
* Complaint filed by the Mercantile and Investment Company S.A. (SOMERISA) against the Provincial Municipality of Tumbes for charging a fee for the Advertising and Publicity Permit.
* The complaint was declared to be well-founded.

Ruling 054-95-CLC
* Standard Investigation of the Municipality of Breña for alleged violations of Legislative Decree No. 776 for charging a fee for the Advertising and Publicity Permit.
* The standard investigation was declared to be well-founded.

Ruling 055-95-CLC
* Complaint filed by El Jet Brake Service Company S.A. against the Municipality of Surquillo, for charging a fee for the Advertising and Publicity Permit.
* The complaint was declared to have merit.

Ruling 056-95-CLC
* Complaint filed by Mario Canales and Eduardo Clériga Sarmiento against the Castro Fuentes Transportation Company S.A. (KEJVIDSA), the Municipal Secretariat of Urban Transportation of the Municipality of Metropolitan Lima, Ivonne Fuentes Zárate, Doris Fuentes de Castro, and Víctor Castro Ruiz for alleged abuse of authority.
* The complaint was declared to be without merit.

Ruling 057-95-CLC
* Complaint filed by the Peruvian Consumer and User Association (ASPEC) against the "Los Portales S.A." company and the Peruvian Corporation of Airports and Commercial Aviation S.A. (CORPAC), for alleged abuse of authority in managing the parking lot at the Jorge Chávez International Airport.
* The complaint was declared to be well-founded.

B. Economic Mergers and Concentrations

The Technical Secretariat drew up a draft regulation to control mergers in the electricity sector, in conformity with the provisions of D.S. No. 27-95-ITINCI. This work was carried out in conjunction with advisors from the Indecopi Economic Studies Area and from the Ministry of Energy and Mines.

The draft has not yet been adopted - a factor that is essential in this regard since the regulation of reference will establish the basis for the Commission's role in regulating mergers in the electricity sector. Without that norm, there is no proper legal framework (the definition of mergers, prior notification systems, sanctions, etc.) for exercising such authority.

Accordingly, no action has been taken to control economic mergers within the only available sphere of action for doing so, as noted above.

III. Regulatory and Trade Policy Matters

Aside from the work entailed in monitoring markets and the investigations and resolution of proceedings, meetings were held with the authorities responsible for privatizing a number of state-owned companies.

The intervention and coordination of the Committee on Privatization (COPRI) and the Special Committees on Privatization (CEPRIS) were aimed at including suitable mechanisms for preventing the restraint of free competition on the agenda for privatization and terms of negotiation.

In particular, the authorities participated in the privatization of Empresa de la Sal-Emsal and Hierro Peru, state companies for which the privatization process has been completed.

IV. International Affairs

One of the main concerns in this respect has been the ongoing concern over training the members of both the Commission on Free Competition and the Technical Secretariat. This has been achieved in the past through visits to foreign organizations responsible for ensuring compliance with regulations governing competition. Those visits allowed the organization and operation of such entities to be observed - experience that is used as a reference point for our situation. The following training and representation visits were made by the Commission:

• Internship in Washington, May 8-19, 1995. Visits to the Federal Trade Commission and the Department of Justice on issues related to protecting free competition. Dr. Carmen de Piérola Caravedo, Technical Secretary of the Commission on Free Competition.

• Visit to the Federal Law Office for Consumers-PROFECO of Mexico, May 22-26, 1995. Dr. Carmen de Piérola Caravedo, Technical Secretary of the Commission on Free Competition.

• Visit to the Office of the Supervisor for the Promotion and Protection of Free Competition of Venezuela, October 23-24, 1995. Dr. Alejandro Alfageme Rodríguez Larraín, Chairman of the Commission on free Competition.

• First Meeting of Competent Authorities from Spain and Latin America, held in Cartagena de Indias, Colombia December 4-7, 1995. Dr. César Guzmán-Barrón, a member of the Commission on Free Competition, and Joselyn Olaechea Flores, Acting Technical Secretary of the Commission on Free Competition.

The training of Technical Secretariat personnel has also been the subject of an exchange of information with foreign organizations that regulate free competition, especially through consultations on specific cases. Some of the organizations consulted were: the Superintendencies of Venezuela and Colombia; Mexico's Federal Commission on Competition, the United States Federal Trade Commission and Department of Justice; the Competition Defense Service and the Tribunal for the Protection of Competition in Spain; and the Bundeskartellam in Germany.

Conversations were also held for that purpose with the Competition Division of the European Union as a basis for execution of a Project on Economic Cooperation and Cooperation in Training in the area of Competition.

That project's overall goal is to develop the rules for competition and ensure the effective implementation thereof as instruments to support the economic reforms and improvements of Latin American economies. It includes internships in the competition offices of some of the European Union member countries of the European Union, visits to our country by experts; the organization of international seminars, etc.