Guatemala law of companies and relationships


The EUCAAA marks an important step forward in the relationship between the two regions.
However, despite the obligation to have an adequate Competition Framework in accordance
with Chapter VII of the EUCAAA, Guatemala is falling short. It is the only country without a
special competition law in Central America. To this date, Bill 5074 (the “Competition Bill”) has
not been approved yet. Congress opened a first debate on April 2018 after years of ample
discussions from various sectors of the economy including a previous bill (Bill Nr. 4426) that
was archived by Congress. However, no further discussions have taken place.
It cannot be affirmed that Guatemala does not have any competition related provisions as
these exist albeit, precariously, in scattered laws. The Political Constitution of the Republic of
Guatemala contemplates fundamental aspects regarding competition and market economy,
such as: the duties of the State to protect the market economy and prevent practices that
restrict competition and that, therefore, are detrimental to the interests and welfare of
consumers (prohibition of monopolies, for example). These conducts are in turn prohibited by
the Criminal Code, which typifies and punishes with monetary fines and imprisonment,
practices harmful to competition and the welfare of consumers.
In the same way, the Commercial Code of Guatemala establishes in Book II, Title II, the norms
that relate to “The Protection of Free Competition”

 (articles 361 to 367), which establish the
prohibition of conducts and acts that may affect the rights of competitors and consumers, such
is the case of unfair competition. Article 361 states: “All companies have the obligation to enter
into contracts with any party that may require their products and services, and they must abide
equal treatment among the diverse categories of consumers.”.
TA to Support the Implementation of the Trade Pillar of the EU-CA Association Agreement
Legal review of the Central American Competition framework
Notwithstanding the above, it was not possible to identify any case brought before the courts
claiming a violation to such article 361 based on competition grounds. Instead, there is much
case law based on unfair competition analyzed in Guatemala solely from the protection of the
rights of a company A that is being affected by the acts of company B, without determining
existence of dominant positions or market power, etc.
Guatemala approved the Central American Competition Regulations, which entered into force
in March 2021. Here, Guatemala recognized that the country’s competition laws were
comprised by the following (in addition to the aforementioned): Public Procurement Law, Law
on Hydrocarbons, Law for the Commercialization of Hydrocarbons, General Law of
Telecommunications, Banks and Financial Groups Law, Law for Insurance Activities, as well as
“any other that law related to competition notified to COMIECO”. However, the focus in these
laws is not to allow or promote competition in such sectors, but rather, these are laws that
restrict competition in those regulated sectors. These types of laws are sometimes presented
as laws to incentivize a sector, but instead they foster privileges, monopolistic practices and
2. Competition Authorities (article 279 of the EUCAAA) 

Currently, due to the lack of a competition law in force, there is no designated competition
authority to promote, supervise and establish sanctions with regards to anticompetitive
practices. The Competition Bill proposes the creation of a Superintendency of Competition
in charge of defending and promoting free competition, as well as to prevent, investigate and
punish anticompetitive practices with authority in the territory of Guatemala. The
Superintendency will be a public entity with autonomy and independence. All governmental
entities will have the obligation to support the Superintendency within their capacities. The
Superintendency will be formed by the Superintended and a Directory formed by 3 members,
one appointed by the Executive branch, the second by the Judicial branch and the third by
Congress. The Directory will appoint the Superintendent. However, there will be an Evaluator
Committee in charge of proposing the candidates of both bodies. 

With regards to budget, the Competition Bill establishes that the Superintendency will have its
own budget, approved by Congress and revenue generated from dues and levies established
by the Directory. The Bill does not establish a fixed amount based on a particular index, such
as a base salary, used in other jurisdictions which could create uncertainty as to the funds to
be received by this competition authority. The Superintendency will have the authority to
exchange information with other supervisory entities either national or foreigner, as well as
request information. The Competition Bill also establishes that the Superintendency will be
able to suggest measures for the elimination of entry and exit barriers, as well if any other
restrictions that distort an efficient market.
Guatemala’s Ministry of Economy created a Department for the Promotion of Competition
divided into the Department of Analysis and Information and the Department for the
Promotion of Competition based on the Ministry’s Organic Regulations approve by
Governmental Decree Nr. 170-2015 22 and also the Vice-Minister’s office was created in 2000,
which includes amongst its functions, the promotion of competition and protection of
TA to Support the Implementation of the Trade Pillar of the EU-CA Association Agreement
Legal review of the Central American Competition framework
consumers. 23 The Department for the Promotion of Competition assisted in 2005 in the
drafting of the competition in 2005 bill24 archived later by Congress.

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