This section will present recommendations, related to the institutional and legal framework, competition law enforcement, as well as competition advocacy and institutional co-operation. They suggest possible ways forward for consideration by the Dominican Republic, with the aim of improving the country’s competition law and policy. For a list of the key recommendations which seem particularly relevant for the improvement of competition law and policy in the Dominican Republic, see the Executive Summary of this report.
Peer Reviews of Competition Law and Policy: Dominican Republic
Report
Competition Law and Policy Reviews
Table of contents
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4. Recommendations
Abstract
4.1. Institutional and legal framework
Adopt a common competition framework, including both substantive and procedural rules, that uniformly applies across all sectors. In addition, clarify which entities are responsible for the enforcement of competition law in the different sectors (i.e. Pro-Competencia or sector regulators).
Strengthen budgetary and human resources dedicated to competition enforcement in Dominican Republic:
Increase Pro-Competencia’s budget (e.g. through governmental funding, administrative fees of a future merger control regime, and resources from international co-operation agreements, and avoid the use of sanctions for this purpose).
Provide Pro-Competencia with more staff dedicated to core competition functions (e.g. hiring staff, transferring civil servants from other entities, converting current administrative positions into positions allocated to competition functions).
Review the remuneration of technical staff to make Pro-Competencia more attractive as a long-term employer, as well as introduce credible career plans for temporary employees.
Provide Pro-Competencia with the necessary resources to invest in a digital case management system, IT forensics and computers able to run sophisticated software for data analytics.
Offer trainings to Pro-Competencia’s staff on competition and economics.
Enable Pro-Competencia to prioritise enforcement and advocacy actions based on transparent criteria (e.g. economic and geographic impact, relevance to consumers, public procurements or strategic industries), including the power not to take enforcement actions or to close investigations based on its priorities and/or availability of resources.
Adopt the necessary institutional safeguards to guarantee the independence of the competition enforcement actions of Pro-Competencia and sector regulators with competition enforcement powers as per OECD Recommendation on Transparency and Procedural Fairness in Competition Law Enforcement.
4.2. Merger control
Adopt a general ex-ante merger control regime in line with OECD standards and international best practices, in particular:
The delineation of merger control jurisdiction through the definition of mergers, the selection a merger notification mechanism and the determination of notification thresholds;
The establishment of a transparent, effective and timely merger review procedure, and corresponding merger review powers with Pro-Competencia;
The provision of a consistent substantive test to assess mergers’ impact on competition;
The enforceability of merger control rules through adequate enforcement tools, sanctions and judicial review.
While a general merger control regime is not implemented in the Dominican Republic, ensure that the existing merger control regime in the telecommunications, electricity and financial sectors take into account the effects on competition of the transactions and that Pro-Competencia is consulted in all reviews.
4.3. Anti-competitive practices
Increase enforcement actions against cartels and abuse of dominance cases:
Detection, standard of proof and scope of infringements
Develop effective anti-cartel detection tools such as pro-active methods (e.g. economic filters and industry monitoring) and anonymous complaints.
Ensure that hard core cartels are considered per se infringements.
Monitor anti-competitive vertical agreements and ensure that they are covered by the legislation and the enforcement practice.
Adopt a broader concept of restriction on competition when assessing anti-competitive behaviours, not limited to unjustified market barriers.
Sanctions, settlements and leniency
Ensure that sanctions have sufficient deterrent effects. Maximum caps of fines should be based on flexible elements that allow to consider the specific circumstances of the cases and the markets affected in line with international standards (e.g. percentage of turnover).
Introduce non-monetary sanctions for anti-competitive infringements, such as director disqualification and bidder exclusion.
Ensure that individuals who have participated in anti-competitive practices are administratively sanctioned.
Ensure that the current criminal law provision is effectively enforced against cartels.
Adopt general guidelines on the methodology to impose sanctions and calculate fines, considering not only the damage caused by the anti-competitive practice but other elements such as length and severity of infringement.
Improve the existing settlement mechanisms (i.e. Pro-Competencia’s Decisions No. 008-2011 and No. 011-2021), particularly in parallel with more enforcement decisions and higher sanctions.
Introduce a proper leniency policy to be implemented when the enforcement activities of Pro-Competencia are more effective, including with deterrent sanctions.
Interim measures
Clarify that Pro-Competencia can adopt interim measures to effectively cease possible infringements, subject to judicial review.
Improve the procedural framework for enforcement actions:
Timeline of investigations
Expand the length of the statute of limitation in line with international practices.
Increase the timeline limitation to conduct investigations and/or allow for more flexibility regarding the extension or suspension of investigation deadlines.
Dawn raids
Ensure that dawn raids can be conducted before notifying the alleged offending parties of the initiation of a formal investigation, in order to ensure the surprise effect.
Streamline the procedure for requesting authorisations for dawn raids, ensuring that they can be directly requested by Pro-Competencia’s Executive Directorate solely based on indications of anti-competitive infringements.
Transparency and procedural fairness
Protect the investigation phase, for instance by allowing Pro-Competencia to publish non-confidential versions of the decision to initiate the investigation and the complaints (instead of the full version) after the opening of the formal investigations.
Ensure that confidential information other than business secrets is protected during and after investigations. In addition, clarify the circumstances in which certain information can be disclosed.
Ensure that privileged communications between attorneys and clients are protected during and after investigations, for instance by setting clear guidelines on which type of client-attorney information can be considered privileged, as per OECD Recommendation on Transparency and Procedural Fairness in Competition Law Enforcement.
Sanctions for effective investigations
Establish clear and effective sanctions for companies and individuals who do not co-operate with Pro-Competencia during inspections.
Introduce deterrent fines for failure to reply, late replies and the use of incomplete or misleading information regarding requests of information by Pro-Competencia.
4.4. Judicial review and private enforcement
Invest in competition-specific trainings for judges involved in competition cases, for instance with the help of international organisations.
Consider encouraging private enforcement to allow the compensation of victims and boost the deterrent effect of competition law.
4.5. Competition advocacy
Further promote competition within the Dominican Republic, in order to create a competition culture among businesses, government and general public. This should include a national competition advocacy strategy, with coordinated planning, priority setting, and active involvement of the relevant stakeholders.
Further promote competition capacity-building initiatives to civil servants in charge of competition enforcement, including through resources available internationally (e.g. OECD, foreign competition authorities, ICN training on demand).
Establish a structured follow-up of the implementation of recommendations made by Pro-Competencia’s advocacy actions (e.g. reports, opinions and market studies) in order to allow the assessment of their impact and to take further actions if necessary.
Adopt a clear methodology and process for carrying out market studies.
Continue developing guidelines on substantive matters and adopt guidelines on procedural issues.
4.6. Domestic and International co-operation
Ensure that co-ordination mechanisms between Pro-Competencia and the sector regulators with competition enforcement powers are effectively implemented, including the use the consultation mechanism provided for in the Competition Act regarding the adoption of competition infringement decisions and draft sector regulation. Proper channels of information sharing, staff exchanges and joint working groups should also be implemented. In addition, ensure the existence of formal co-operation agreements between Pro-Competencia and all sector regulators with competition enforcement powers.
Ensure that government entities, including sector regulators with competition enforcement powers, explain the reasons when choosing not to follow Pro-Competencia’s non-binding opinions and recommendations.
Empower another entity (for instance, Pro-Consumidor) with the enforcement of unfair competition practices. Alternatively, Pro-Competencia should limit its investigations related to unfair competition practices to those affecting the general public economic interest, freeing up resources to competition infringement investigations. In this case, co-operation with Pro-Consumidor, particularly in relation to unfair competition practices, should be strengthened.
Continue developing co-operation with public procurement entities to enhance the fight against bid rigging.
Continue developing technical co-operation with foreign competition authorities and enhance participation and engagement in international events. In addition, strengthen international co-operation efforts, such as through the sharing of confidential information, investigative assistance and joint enforcement actions with other competition authorities.