Competition cases are investigated by the Fiscalia Nacional Economica (FNE) a talented and reasonably well resourced agency. The head of the FNE is appointed by the President with the aid of a panel of experts and has a four year term. Currently the FNE has a budget of about $8 million and a staff of 80-90. It is a hot job for new law grads and often staff go off for an LLM in the US or UK and return. Most of the division heads have substantial experience. Historically the FNE has brought mainly abuse of dominance cases in keeping with Chile's staus as a relatively small country with a highly concentrated economy. Case law in this area follows the EU with US cases only occasionally being used to support a decision to bring a case. Merger enforcement is limited with no mandatory pre-merger notification. The first voluntary notification brought a successful challenge and appears to have deterred future use of this option.
There is an increased emphasis on cartel cases. Leniency exists but is seldom used but it only applies to fines and doesn't apply to potential criminal prosecution which is handled by the general criminal prosecutors. No specific antitrust statute permits criminal prosecution but ancient 19th century statutes theoretically permit such actions. The general prosecutors office does not have a strong interest or background in this area. The FNE uses dawn raids and the possibility of wiretaps to make cartel cases carrying medium levels fines. One of the first successful ones involved pharmacies resulting in rather modest fines) and a current case involves the poultry industry.
I was impressed with the head of the FNE and the staff I met. Felipe Irrazabal, the chief, is smart, practical, and keenly aware of the need to pick and choose his shots given his budget and staff. Everyone I met was sophisticated in both and economics and knowledgeable in the substance of US and EU law.
The FNE brings the cases it does not settle before a specialized court, the Tribunal for the Defense of Free Competition. The Tribunal has 5 judges, three lawyers and two economists. The Central bank appoints 3 of the judges with the help of a panel of experts and the President appoints the other 2 judges. One of the current economists holds a PhD from the University of Chicago without sharing those politics. Another judge is the former head of the FNE. The Tribunal hears 20-30 cases a year with the help of a small staff and a budget of about $2 million. The Tribunal also hears private cases for injunctions but not damages. All appeals go to the commercial chamber of the Supreme Court of Chile which is slowly becoming more sophisticated in its handling of the substance as well as the procedure of the cases before it.
What about private actions for damages? Stay tuned for Part Tres after mid-term grading concludes later tonight or tomorrow.