This article is published in the Journal of Competition and Intellectual Property Indecopi (Year 3-Number 5 - Spring 2007). If in case you're interested, here is the link to the full article:
http://www.indecopi.gob.pe/ArchivosPortal/boletines/recompi/castellano/articulos/primavera2007/HIGA.pdf
The purpose of this paper is to analyze, using tools from of logic and argumentation theory, the reasoning in the Court Constitu-tion that recognizes the power of INDECOPI to issue additional measures in cases of infringement of the rules of free competition, which was issued in File No. 1963-2006-PA/TC (Case Dino).
I. Background
the case under the Constitutional Court ruling under which it recognizes the power of INDECOPI to impose additional measures has its origin in the complaint for alleged abuse of dominant position in the forms of price discrimination and tied sales in the distribution market of cement and other materials construction, submit Deposits Santa Beatriz SRL (hereinafter, Santa Beatriz) to the Competition Commission against the company INDECOPI Distribuidora Norte Pacasmayo SRL2 (hereinafter, Dino) on January 16, 2001. Santa Beatriz
reported that Dino cement offered S /. 13.97 for cement type 1 and S /. 13.85 1Co/MS for cement type, while the price for firms affiliated to the network of sub-distributors of Dino was S /. 13.70 for cement type 1 and S /. 13.57 1Co/MS3 for cement type. According to Santa Beatriz, the price differential was an abuse of dominant position in the market in the form of discrimination, since no justification because his company purchased cement volumes greater than those obtained by members, and, moreover, to make the payment in advance, unlike the member companies who enjoyed a loan to five days.
Also, Santa Beatriz said the contract of affiliation with the network of sub-distributors of Dino containing an obligation by which member companies had to provide, in addition to cement, construction materials, solely from this company, which constitute an abuse of dominant position in the market in the form of tied sales.
By Resolution No. 006-2005-INDECOPI/CLC, the Commission Free Competition declared unfounded the complaint lodged by the companies Deposits Santa Beatriz SRL, Eleodoro EIRL and Commercial Quiroga Quiroga Ramos SRL That decision was appealed to the Board of Competition of INDECOPI second administrative level.
The Board of Competition, by Resolution No. 0256-2006/TDC-INDECOPI, revoked Resolution No. 006-2005-INDECOPI/CLC and upheld the complaint against Dino for abuse of dominant position and ordered as an additional measure "immediate and definitive cessation of the acts constituting abuse of dominant position in the market (...)".
In light of that ruling, the April 5, 2005, Salvador Hardware SRL (hereinafter, the Hardware) lodged an appeal against the INDECOPI grounds that it violated his right to due process, freedom of private initiative , free enterprise and free contract.
Main Hardware arguments were:
• The mandate of INDECOPI meant nullifying the performance contract was signed with Dino, which violated his constitutional right to free employment;
• INDECOPI had no power to declare a contract invalid, as this can only be declared by the judiciary;
• Indecopi had also committed a violation of his right to due process because the procedure has never been located, although the decision of this condition affected his status.
The Constitutional Court ruled unfounded by stating the request for defense in its entirety noting that: (i) the INDECOPI if he had authority to issue fines up action, and (ii) had not violated the right to due process of the Hardware.
This paper will focus on analyzing the reasons that the Constitutional Court used to support the first point of delivery; ie, to analyze, using logical tools and the theory of argumentation, reasoning adopted by the Constitutional Court to justify its ruling relating to the INDECOPI did have power to issue measures. In our analysis we will follow the outline of the Constitutional Court.
http://www.indecopi.gob.pe/ArchivosPortal/boletines/recompi/castellano/articulos/primavera2007/HIGA.pdf
The purpose of this paper is to analyze, using tools from of logic and argumentation theory, the reasoning in the Court Constitu-tion that recognizes the power of INDECOPI to issue additional measures in cases of infringement of the rules of free competition, which was issued in File No. 1963-2006-PA/TC (Case Dino).
I. Background
the case under the Constitutional Court ruling under which it recognizes the power of INDECOPI to impose additional measures has its origin in the complaint for alleged abuse of dominant position in the forms of price discrimination and tied sales in the distribution market of cement and other materials construction, submit Deposits Santa Beatriz SRL (hereinafter, Santa Beatriz) to the Competition Commission against the company INDECOPI Distribuidora Norte Pacasmayo SRL2 (hereinafter, Dino) on January 16, 2001. Santa Beatriz
reported that Dino cement offered S /. 13.97 for cement type 1 and S /. 13.85 1Co/MS for cement type, while the price for firms affiliated to the network of sub-distributors of Dino was S /. 13.70 for cement type 1 and S /. 13.57 1Co/MS3 for cement type. According to Santa Beatriz, the price differential was an abuse of dominant position in the market in the form of discrimination, since no justification because his company purchased cement volumes greater than those obtained by members, and, moreover, to make the payment in advance, unlike the member companies who enjoyed a loan to five days.
Also, Santa Beatriz said the contract of affiliation with the network of sub-distributors of Dino containing an obligation by which member companies had to provide, in addition to cement, construction materials, solely from this company, which constitute an abuse of dominant position in the market in the form of tied sales.
By Resolution No. 006-2005-INDECOPI/CLC, the Commission Free Competition declared unfounded the complaint lodged by the companies Deposits Santa Beatriz SRL, Eleodoro EIRL and Commercial Quiroga Quiroga Ramos SRL That decision was appealed to the Board of Competition of INDECOPI second administrative level.
The Board of Competition, by Resolution No. 0256-2006/TDC-INDECOPI, revoked Resolution No. 006-2005-INDECOPI/CLC and upheld the complaint against Dino for abuse of dominant position and ordered as an additional measure "immediate and definitive cessation of the acts constituting abuse of dominant position in the market (...)".
In light of that ruling, the April 5, 2005, Salvador Hardware SRL (hereinafter, the Hardware) lodged an appeal against the INDECOPI grounds that it violated his right to due process, freedom of private initiative , free enterprise and free contract.
Main Hardware arguments were:
• The mandate of INDECOPI meant nullifying the performance contract was signed with Dino, which violated his constitutional right to free employment;
• INDECOPI had no power to declare a contract invalid, as this can only be declared by the judiciary;
• Indecopi had also committed a violation of his right to due process because the procedure has never been located, although the decision of this condition affected his status.
The Constitutional Court ruled unfounded by stating the request for defense in its entirety noting that: (i) the INDECOPI if he had authority to issue fines up action, and (ii) had not violated the right to due process of the Hardware.
This paper will focus on analyzing the reasons that the Constitutional Court used to support the first point of delivery; ie, to analyze, using logical tools and the theory of argumentation, reasoning adopted by the Constitutional Court to justify its ruling relating to the INDECOPI did have power to issue measures. In our analysis we will follow the outline of the Constitutional Court.
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