1. Introduction
The Law for the Defense and Promotion of Trade (Decree No. 357-2005) was created as a result
of the Credit Agreement for Trade Facilitation and Productivity Improvement between the
World Bank and the Government of Honduras. Its objective is to reduce anti-competitive
conducts and improve the investment climate in the country. With the entry into force of
Decree 357-2005, the CDPC was created, with focus on three main aspects: investigations for
violation of the law, control of concentrations and the execution of sectorial studies. 43 Since its
enactment, the Law for the Defense and Promotion of Competition has not suffered major
42 National Pharmaceutical Profile. Published by the Ministry of Public Health and Social Assistance of Guatemala in
collaboration with the Pan American Health Organization/World Health Organization (PAHO/WHO).
43 https://www.cdpc.hn/
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changes, only one reform in 2015. The Government’s competition policy has been relatively
passive in recent years. At the national level, efforts have been made to forge alliances between
the CDPC
, institutions from the public sector such as the Supreme Court of Justice, the National
Banking and Insurance Commission, the National Telecommunications Commission and some
civil associations such as the National Anti-Corruption Council. At the international level, the
CDPC is a member of the International Competition Network, the Ibero-American, Latin
American and Central American Competition Networks, and the Inter-American Competition
Alliance.
The Competition Framework is comprised of 1. Law for the Defense and Promotion of
Competition (Decree 357-2015) and its amendments; 2. Regulations for the Law for the
Defense and Promotion of Competition (Legislative Agreement 001-2007); 3. Regulations of
the Administrative Clemency Program or Procedure for Cases of Restrictive Practices and
Conducts. Since its creation, the CDPC has issued 3 normative resolutions and 2 official
circulars: 1. 04-CDPC-2014-YEAR-IX: Resolution on new thresholds for notification of
concentrations. 2. 04-CDPC-2012-YEAR-VII: Regulatory resolution Art. 13 LDPC regulation. 3.
005-CDPC-2021-YEAR-XV: Resolution adjusting fines for inflation. 4. Circular No. 01-2015-SG:
Fee for verification of economic concentrations. 5. Circular No. 1-SG-CDPC-2022: Payments of
Economic Concentrations Verification Fee in business days.
The State of Honduras, within the framework of the Council of Ministers of Economic
Integration, approved without reservations Resolution No. 441-2020 (COMIECO-XCIII)
containing the Central American Regulations on Competition, which entered into force on
March 10, 2021. The regulation has not been published in the official gazette and an
application manual for the regulation is being worked on by the Competition Commission.
2.
Competition Authorities (article 279 of the EUCAAA)
The CDPC operates as an autonomous institution with legal capacity, with functional,
administrative, technical and financial independence. The CDPC is integrated by 3
commissioners who have the role of public officers who shall be appointed for a term of 7
years. The CDPC focuses on 2 areas: Law Enforcement, which refers to sanctioning procedures,
economic concentrations, recommendations or opinions, and other established infractions,
and the second is Competition Advocacy, which includes the activities carried out in relation
to the promotion of a competitive environment in economic activities. 44Article 34 of the Law
for the Defense and Promotion of Competition establishes the CDCP ‘s functions.
In the exercise of its functions, the Commission has signed several agreements with public
sector institutions, civil society, competition authorities of countries such as Nicaragua,
Panama, Paraguay and Ecuador, as well as institutions of higher education. In general terms all
these agreements establishes that the parties are not obligated to provide confidential,
reserved or sensitive information by the parties or the competent authorities of their respective
jurisdictions in accordance with the applicable legislation. If provided, public officers must
maintain full confidentiality of the information supplied in connection with the activities carried
out under the agreement.
44 Idem.
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3. Anticompetitive Conducts and Concentrations (article 279 of the EUCAAA)
Agreements/Cartels: Agreements or cartels are known as “restrictive practices prohibited
due to its nature” and are void in accordance with article 5 of the Law and the economic agents
that participated in these practices will be punished from a civil or criminal stance, as
applicable, even if such agreements did not have any effects. The prohibited agreements are
the ones identified as Hard-Core Cartels: i. Price fixing; ii. Restriction of Output; iii. Submit
collusive tenders; iv. Division of markets. The Leniency Program in Honduras was approved in
2015. Fines per economic agent is of 3 times the amount of the profit obtained. If it is not
possible to determine the profit, a fine of 10% of the gross profit in sales of the preceding fiscal
year will be set. In case of a second offense, the fine will be twice the amount of the last fine
imposed. If the fine is not promptly paid, the CDCP may charge with an additional fine from
US$70.64 up to US$ 3,532.37 (exchange rate of L. 24.55) per day for up to a maximum of thirty
calendar days.45 The enforcement of cases concerning this type of conduct has been low.
The
CDCP has investigated 2 cases where fines were imposed in 2013 and 2014. However, since
then, no further cases have been investigated. 46 The CDCP main web page those do not show
activity of any type of either resolution, investigations, provisional measures, or any type of
information after 2015. 47 Both cases of cartels date from 2013 and 2015 and refer to the
pharmaceutical and sugar markets, both cases concerning price fixing agreements.
Abuse of Market Power: Anticompetitive conducts under this category are identified as
“restrictive practices prohibited due to their effects” by article 7 of the Law for the Defense and
Promotion of Competition. These are the agreements, contracts, covenants, combinations or
conducts that were not included in article 5 of the law (agreements), that restrict, diminish,
damage, impede or vulnerate the process of free competition in the production, distribution,
supply or commercialization of goods and services. Among the practices described by the law
there is: imposition of conditions, tying, restrictions to territory, volume or clients, boycott, as
well as “any other act or negotiation that the CDPC considerers that restricts, diminishes,
damages or impedes or vulnerates the process of free competition in the production,
distribution, supply or commercialization of goods and supplies”. The legal provision,
therefore, accepts a numerus apertus for this type of conduct. The fines imposed in for these
types of anticompetitive practices are the same as for cartels. There have been 2 cases
investigated and where fines were imposed in the telecommunications market and beverages
market (against Amnet de Honduras and Cervecería Hondureña). No other cases have been
solved.
Concentrations: The Law for the Defense and Promotion of Competition defines
economic concentrations as the taking or change of control in one or several companies
through shareholding, management control, merger, acquisition of ownership or any right
over shares or equity or debt securities that cause any type of influence in the company's
decisions or any act or acts by virtue of which shares, equity, trusts or assets are grouped
among suppliers, customers or any other economic agent. Before having their intended
effects, economic concentrations must be notified to the Commission by the economic agents
and may be subject to verification.
Concentrations that require approval must be notified to
the CDPC if they surpass the thresholds established by the CDPC based on: 1. The amount of
45 I.e., the highest fine that can be imposed under this scenario is of USD$ 105, 971. 00. 46 COMPAL, Performance Evaluation of National Agencies Defending Competition Participating in the COMPAL
Program in Impact Terms on the Markets, 2018, p 18. 47 https://www.cdpc.hn/?q=www.resolu_pac2015
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assets. 2. Participation in the relevant market; and 3. Turnover. The process may be initiated ex
officio or at the request of a party, and the decisions adopted by the Commission may be:
Favorable, Prohibited or Authorized with conditions. In case of untimely notification of a
concentration transaction, failure to deliver or delay in the delivery of the information
requested by the Commission, a fine will be applied to the offender in accordance with the
rules of successive fines of article 41, i.e., fines from US$70.64 up to US$ 3,532.37 (exchange
rate of L. 24.55 per USD$1.00) for up to a maximum of thirty calendar days. Maximum Fine:
USD$117,500. In total since 2007, the competition authority has authorized 99 concentrations
of which 27 were authorized subject to the fulfilment of conditions and none were rejected.
In the Telecommunication market it is mandatory that the transactions in or between operating
companies that provide services authorized by CONATEL be submitted to CONATEL's
approval prior to take effect. Such operations include: 1. Merger of companies. 2.Acquisition
of shares resulting in a total ownership equal to or greater than 10%. Takeover or change of
control of the administration, assignment or change of effective control, acquisition of
ownership or any other right over shares or capital participations or any other act by virtue of
which shares, social parts or assets are legally grouped. 3. CONATEL must be notified but no
prior approval required of the acquisition of a shareholding of less than 10%
