- Has your national competition authority published guidelines on competition compliance programmes (“CCPs”)? If so, what are the key components of an effective CCP?
- Are there any recent cases in your jurisdiction where the NCA/competent courts have discussed the impact of CCPs?
- What arguments have been taken into account in relation to a CCP? Has the fact that a company has a CCP been assessed in terms of the effort made or the results achieved, i.e. the efficiency of the programme? Is the focus on future changes in CCPs or on existing programmes?
- Has the role of the management and/or employees of the company been assessed with respect to preventing, participating in, detecting and reporting violations, or remediating violations? Is there a link between the role of the company's management and/or employees and an effective CCP?
- Has the fact that an undertaking has a CCP been helpful in reducing a fine for an infringement of competition law? What facts, arguments or commitments were used to justify the reduction and what is the maximum reduction that can be granted? If a reduction is not granted, why not?
- Are CCPs (their adoption or updating) used as evidence for "self-cleaning" measures when an economic operator risks being excluded from a public procurement procedure for collusive behaviour?
- Please indicate any additional considerations / rules, trends that are important in your country in relation to CCPs.
- Are there legal developments on the horizon in relation to CCPs?
jurisdiction
1. Has your national competition authority published guidelines on competition compliance programmes (“CCPs”)? If so, what are the key components of an effective CCP?
The Colombian competition authority: Superintendency of Industry and Commerce
The Colombian NCA published the “Guidelines for the Implementation of Competition Compliance Programmes” in 2022, which outline the key elements for an effective CCP, including:
- Cultural Commitment from Top Management: Ensuring leadership fully endorses the programme.
- Risk Analysis and Management: Relevant criteria to identify, assess, mitigate and control risks stemming from market conditions and from breaching competition law.
- Allocation of Resources: Suggestions to dedicate appropriate resources to the CCP.
- Appointing a Programme Compliance Officer: The Colombian NCA suggests appointing an independent officer to oversee the CCP.
- Internal Communication Mechanisms: Establishing internal reporting and alert channels.
- Training: The Colombian NCA suggests regularly training staff who are close to the identified risks on competition law and compliance.
- Incentives for Compliance: Market agents should encourage adherence to the CCP through organisational rewards.
- Disciplinary Processes: Market agents should define sanctions for non-compliance.
- Supplier and Partner due diligence: Market agents should adopt a high-level due diligence to confirm whether a proposed supplier has been engaged in breach of competition law, before entering into an agreement.
- Periodic Programme Evaluation: Market agents should perform regular audits and adjust the CCP as needed.
The key elements set out above have been updated in the 2024 version of the Guidelines, as well as the current legal framework applicable to CCP and Competition Law enforcement. This version is currently called “Guidelines for the Design of Competition Compliance Programmes”.
2. Are there any recent cases in your jurisdiction where the NCA/competent courts have discussed the impact of CCPs?
There are two recent cases in which the Colombian NCA discussed the impact of CCPs.
The first case is Suzuki Motor of Colombia S.A. (“Suzuki”) (Resolution N. 27906 of 2022). In this case, the Colombian NCA imposed a fine on Suzuki for engaging in anti-competitive practices. This case is particularly significant because it was the first time the Superintendence of Industry and Commerce (SIC) ordered the implementation of a CCP alongside an economic sanction. The Colombian NCA acknowledged that CCPs could play a key role in fostering a culture of compliance in a company and preventing future violations.
In this case, the Colombian NCA pointed out the objectives of CCPs. Additionally, it highlighted the benefits that the implementation of a CCP could bring to a company and to the market in general, and the order issued to Suzuki highlighted that the CCP must meet the conditions set out in the Technical Standard of Compliance 6378 of 2020 (“NTC 6378”), issued by the local entity supporting the Government as the National Standards Body. The order included a 2-year follow-up scheme for the CCP.
It is worth noting that the Colombian NCA recognised that one of the benefits from adopting a CCP is the proof of behaviour that demonstrates due diligence. Although the CCP adoption was not taken into account when estimating the fine in the Suzuki case, the above statement would be relevant to presenting the adoption of a CCP as evidence of less intervention in anti-competitive conduct as relevant criteria to reduce a fine.
The second case is the Colombian NCA granting a settlement to Bavaria S.A. (“Bavaria”) (Resolution N. 50340 and 66152 of 2022) for the alleged abuse of a dominant position. Bavaria was deemed a dominant player in the Colombian beer market, and in this case, they were investigated based on alleged conduct to obstruct market entry by competitors. Bavaria sought an early termination of the investigation by offering a settlement, including the creation and implementation of a CCP.
Bavaria’s CCP was part of a broader set of structural commitments aimed at modifying its commercial practices. The CCP was aligned with NTC 6378 of 2020 and included policies to prevent future exclusivity agreements that could hinder competition. The Colombian NCA granted the settlement offer, including the CCP, to address anti-competitive concerns and prevent future violations.
3. What arguments have been taken into account in relation to a CCP? Has the fact that a company has a CCP been assessed in terms of the effort made or the results achieved, i.e. the efficiency of the programme? Is the focus on future changes in CCPs or on existing programmes?
As mentioned above, in the Suzuki case the Colombian NCA acknowledged for the first time in an open administrative investigation commenced based on anti-competitive behaviour, the benefits a CCP can bring to a market agent. Among those benefits, the Colombian NCA mentioned the following arguments to encourage the adoption of CCPs:
- The adoption of a CCP makes employees and directors aware of the risks they may encounter in a particular market, and allows for the timely detection of anti-competitive behaviour and maintenance of free market environment.
- The adoption of a CCP strengthens management commitment to free market competition conditions.
- The adoption of a CCP also guarantees appropriate risk management related to the conditions of a market or a market competitor.
- A CCP allows the market agent to reduce the likelihood of facing crime or infringement allegations from either competitors or the Colombian NCA, and serves as proof that the market agent’s conduct is in accordance with the required standard of care if they are facing an allegation of a breach of competition law. It also mitigates reputational risk while strengthening stakeholder trust.
Despite the recognition of the benefits of a CCP, the Colombian NCA has not considered the adoption of one as determinative criteria to conclude whether a market agent has breached competition law, and it does not seem a sufficient commitment in settlement agreements offered to the Colombian NCA to end an administrative investigation. The latter is based both on the Bavaria decision granting a settlement agreement where the adoption of a CCP was involved as a commitment, and the decision issued in Resolution N. 44684 of 2023, where the Colombian NCA revoked a previous settlement granted to the National Football Federation (“FCF”), where the adoption of a CCP was offered among the commitments the FCF would undertake in consideration to end the administrative investigation.
The Colombian NCA currently focuses on its willingness to incentivise companies to adopt NTC 6378 and the Guidelines it issued to adopt CCPs, but not necessarily to take into consideration such commitment to end an administrative investigation or leave anti-competitive practices without sanction.
4. Has the role of the management and/or employees of the company been assessed with respect to preventing, participating in, detecting and reporting violations, or remediating violations? Is there a link between the role of the company's management and/or employees and an effective CCP?
Yes, the role of the company’s management and employees has been assessed in detail in terms of preventing, detecting, reporting and remediating competition law violations in Colombia.
First, it is important to clarify that the Colombian NCA emphasises the responsibility of individuals, including management and employees, to ensure compliance with competition law. Article 26 of Law N. 1340 of 2009 provides for sanctions to be imposed on individuals who participate in, facilitate, or fail to prevent anti-competitive behaviour. This includes not only those directly involved in the violations, but also those in positions of authority who could have prevented them but failed to act. Therefore, the responsibility and potential liability of individuals through which a company operates are relevant to enforcement scenarios.
On the other hand, it is important to note the connection between management involvement and the effectiveness of a CCP. The SIC’s Guidelines for the Implementation of CCPs and international best practices both highlight that an effective CCP requires active involvement and commitment from the company’s top management. Senior leadership must demonstrate a genuine commitment to fostering a compliance culture, allocate resources, and ensure that all levels of the organisation understand the importance of adherence to competition laws.
Moreover, employees play a critical role in detecting and reporting potential violations. This is why, according to the SIC and the Guidelines, effective CCPs should include whistleblower mechanisms and training that empowers employees to recognise and report anti-competitive practices. Without proper engagement from both management and employees, a CCP is unlikely to be successful.
5. Has the fact that an undertaking has a CCP been helpful in reducing a fine for an infringement of competition law? What facts, arguments or commitments were used to justify the reduction and what is the maximum reduction that can be granted? If a reduction is not granted, why not?
The existence of a CCP has been a contentious factor in determining whether a fine for a competition law infringement can be reduced in Colombia. Nonetheless, the Colombian NCA has not yet acknowledged the adoption of a CCP as relevant factor to reduce a fine.
Historically, the Colombian NCA has been firm in denying reductions and other benefits to companies that had CCPs but still breached competition laws. An example is Resolution N. 41412 of 2018 in the Bureau Veritas Colombia case, where the Colombian NCA stated that the mere existence of a code of ethics or formal compliance policy did not exempt a company from liability for breaching competition law. The Colombian NCA found that despite the existence of a CCP, unethical and anti-competitive behaviour had occurred, negating any argument for a reduction.
However, in the Suzuki case the Colombian NCA showed greater openness to considering CCPs as an argument to decrease the fine. The Colombian NCA acknowledged that the CCP allowed the market agent to prove it behaved in accordance with the required standard of care once it faced a breach to competition law allegation. Nevertheless, such statement was made as obiter dicta in Suzuki. It is likely it may allow future defendants to ask for a reduction in the fine based on a lesser degree of involvement in anti-competitive behaviour given the adoption of a CCP, based on Article 25 of Law N. 1340 of 2009.
6. Are CCPs (their adoption or updating) used as evidence for "self-cleaning" measures when an economic operator risks being excluded from a public procurement procedure for collusive behaviour?
In Colombia, the adoption of a CCP has not been explicitly recognised as a direct “self-cleaning” measure for companies involved in collusive behaviour in public procurement. However, CCPs are strongly recommended for companies that participate in public procurement, particularly companies that act as contracting entities in bids and that have been victims of collusion.
On the other hand, the Colombian NCA has stressed its focus on providing public entities with guidelines to avoid collusive behaviour in bid proceedings, and to encourage them to adopt CCPs as a tool to enhance the timely detecting and reporting of such anti-competitive practices.
For example, in Resolution N. 37344 of 2022, the Central Inversiones S.A. case, the Colombian NCA stated that the contracting entity had an obligation to promote a free market competition policy in the different national markets, for which the self-implementation of a CCP was suggested to prevent the occurrence of collusive practices in the future, as well as to help detect any violation to the competition regime in a timely fashion. In addition, in 2023 the Colombian NCA updated the Guidelines to detect collusive behaviour in public bids addressing, among others, certain indications of potential problems. In accordance with the Guidelines, these indications include: (i) prior family or professional relations between two offerors in a bid; (ii) similarities in the competitive behaviour by two or more offerors; (iii) fewer offerors compared to the available competitors for the provision of a product or service; (iv) submitting offers failing the requirements for submission or with irrational commercial conditions.
7. Please indicate any additional considerations / rules, trends that are important in your country in relation to CCPs.
The Colombian NCA is taking steps to promote the adoption of Competition Compliance Programmes among market participants. In furtherance of this position, CCPs may be offered jointly with structural and behavioural commitments as a sufficient commitment for settlement, as well as conditions in a merger or consolidation in order to be granted clearance.
8. Are there legal developments on the horizon in relation to CCPs?
There are no foreseeable developments on the adoption or enforcement of CCPs, although the Colombian NCA’s role does seem to be moving to cooperate and to guide avoidance of anti-competitive practices based on encouraging CCPs, rather than exclusively commencing administrative investigations to impose fines. It is worth noting that:
- One of the first major regulatory steps towards formalising CCPs in Colombia was the issuance of NTC 6378 by the local Institute of Technical Standards and Certification (ICONTEC), with the support of the Colombian NCA. This regulation provides valuable advice for the creation and implementation of CCPs. It establishes minimum elements and procedures that a CCP should have. However, since it was not issued by the legislator, it cannot establish legal consequences, and its function is to serve as a consultation tool.
- On the other hand, the Colombian NCA currently has a Compliance Directorate in the Office for the Protection of Competition. This Directorate Section was created by the issuance of Decree 092 in 2022. This represents a major institutional shift, as this new Directorate is tasked with overseeing the performance of CCPs to be adopted by an order issued by the Colombian NCA as a consequence of a settlement or an approval for a merger subject to the fulfilment of conditions to prevent the risk of harming free market competition. The Directorate’s role also includes providing guidance and assistance in spreading and encouraging materials to promote a culture of competition law compliance in companies operating in Colombia.
- The Colombian NCA recently updated the current “Guidelines for the Design of Competition Compliance Programmes”. These Guidelines offer a roadmap for market participants to develop compliance frameworks, focusing on internal structures, processes, and responsibilities necessary for effective compliance.