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MIDA Wants Proposed Antimonopoly Bill Amended

Says bill didn’t turn out as it expected


June 24, 2004
Copyright © 2004 CARIBBEAN BUSINESS. All Rights Reserved.

After initially leading the lobbying effort in support of the antimonopoly bill proposed by the Legislature (CB May 27, 2004), the Chamber of Food Marketing, Industry & Distribution (MIDA by its Spanish acronym) has changed its mind.

Now, it is recommending some amendments to the bill that it hopes will make it acceptable to other business organizations, the vast majority of which are strenuously opposed to the measure.

"At first MIDA was in favor of the bill, but when we studied its final version we saw it wasn’t what we intended it to be. This being the case, we can’t support it as it is and are recommending some amendments," said the organization’s President Atilano Cordero Badillo.

Fernando Bonilla, a member of MIDA and vice president of Pueblo Supermarkets, said, "The bill has some deficient criteria, so MIDA proposes that Puerto Rico’s laws adopt the same criteria as federal laws."

For instance, MIDA is now recommending that prior certification by the local Justice Department be limited to mergers and acquisitions that could unreasonably restrict competition, but not expansions, as proposed in the original bill.

"What we now propose is similar to what is required by the Federal Trade Commission, which calls for a compulsory evaluation when one of the parties’ assets totals $100 million or more and when the transaction’s value is $50 million or more," said Cordero Badillo.

The original bill required the Justice Department to evaluate and certify mergers and acquisitions that could result in a combined market share of 30% or more, or in which the assets of any one of the companies involved exceed $25 million. It also required prior Justice Department approval of any expansion of 90,000 square feet in any geographic market, or of a new locale of 10,000 square feet in a geographic market where the proponent already has another locale, or of any new locale larger than the average size of similar businesses in the same geographic market.

Another amendment calls for the creation of procedures that guarantee that evaluations are performed quickly. MIDA recommends establishing a 60-day period for the Justice Department to make a final determination on the proposed merger or acquisition.

MIDA also wants companies or private businesses to be able to take legal action against merger or acquisition plans that could constitute a monopoly only if they are directly affected by them. The organization is also recommending the elimination of the public administrative hearing procedure contemplated in the original bill. It has been harshly criticized because it would open the door for competitors to obtain sensitive business information from businesses proposing expansions.

With respect to expansions, MIDA wants the bill changed so that businesses would merely have to notify the Justice Department about their intention to expand upon filing for permits at Regulations & Permits Administration, for example. It would be up to the Justice Department to investigate whether the expansion involves the intent to monopolize a market.

Some of the criteria to take into consideration when determining what could constitute an intent to monopolize would be size, a market share of 30% or more, the frequency and proximity of new units or expansions, and the amount of businesses already owned by the company in one geographical market. But instead of defining the procedure for such review in the bill, MIDA suggests it should be determined by regulation to be adopted by the department later.

Both Cordero Badillo and Bonilla believe that if these amendments are taken into consideration and made, the business community will be able to join together to support the new antimonopoly bill.

This Caribbean Business article appears courtesy of Casiano Communications.
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