Fish BaitOn January 16th, 2008, the Dominican Republic enacted Law No. 42-08 for the Defense of Competition (“Law No. 42-08”), which is of public policy nature and seeks to promote free competition and sanction unfair practices in the Dominican market. The entry into force of Law No. 42-08, however, was conditioned on the appointment of the Directive Committee and the Executive Director of the National Commission for the Defense of Competition, respectively, pursuant to Article 67 of the law.

The Directive Committee was sworn into office on January 29th, 2011, and just recently, on January 6th, 2017, the Executive Branch[1] appointed the Executive Director of the National Commission for the Defense of Competition. Hence, the legal requirements for the full entry into force of the law are complete.

The immediate consequences resulting from the application of Law No. 42-08 include:

  • Investigation of potential unfair practices or other violations to Law No. 42-08. These investigations can be conducted ex-officio by the National Commission for the Defense of Competition, which is also the sanctioning authority.
  • Remittance to the Executive Branch of the rules of procedure for the application of the law.
  • Consolidation of an effective channel for claims related to unfair trade practices.
  • Investment of the regulated economic sectors’ authorities for the joint revision of the regulations that will cover regulated sectors, within the 2 years following the entry into force of the law (pursuant to Article 69).

As per Article 5 of Law No. 42-08, the following acts are considered unfair practices:

  • Agreeing to price-fixing, discounting, imposing extraordinary charges, or other conditions to sell, as well as exchanging information that has the same objective or effect.
  • Coordinating or fixing offers or the absence of offers in public tenders, competitions and public auctions.
  • Redistributing, distributing or assigning segments or parts of a goods and services market, while identifying a specific timeframe or area, as well as providers and clients.
  • Limiting the production, distribution or commercialization of goods; or the delivery and/or frequency of services, notwithstanding the nature of the same.
  • Eliminating competitors from the market or limiting their access to the same, whether it is from the competitors’ position of buyers or sellers of specific products.

If the necessary steps towards the appropriate application of Law No. 42-08 are taken, the Dominican authorities – particularly the National Commission for the Defense of Competition – will oversee the existence of free trade and lawful conduct between the existing actors, as well as secure a more competitive access to the Dominican market. This will ultimately benefit the consumers and impulse the growth of foreign investment in the Dominican Republic.

[1] Decree No. 5-17 dated as of January 6th, 2017.