COSTA RICA | Horizontal Restraints and their Sanctions
Arianne Silva, Associate at ARIAS Costa Rica and an expert in Antitrust Law, shares the following article on how horizontal restraints are considered the most harmful practices to free competition and are therefore prohibited by law.
Horizontal Restraints as defined in the "Law on the Promotion of Competition and Effective Consumer Protection,” encompass any actions, agreements, arrangements, or contracts between current or potential competitors aimed at fixing prices or quantities, imposing restrictions on the acquisition, production, distribution, or commercialization of goods or services, dividing the market segments, coordinating participation in public tenders, refusing to buy or sell goods or services, or exchanging strategic information.
These practices are universally recognized as the most detrimental to free competition and are consequently explicitly prohibited by Law. Consequently, economic agents operating within a relevant market who engage in such practices will face sanctions, and any actions conducted under these circumstances will be deemed null and void by law.
Within its regulatory authority, COPROCOM has the power to initiate an investigation ex officio or upon request from an interested party.
The sanctioning regime for these practices is governed by the "Law for the Strengthening of Costa Rica’s Competition Authorities.” Horizontal restraints are considered very serious infringements, and COPROCOM may impose the following sanctions: (i) order the suspension, correction, or elimination of the monopolistic practice; (ii) impose a fine ranging from 0.1% to 10% of the total turnover of the economic agent during the fiscal year immediately preceding the imposition of the sanction; (iii) prohibit the economic agents and their legal representatives from participating in any form of public binding process with any public entity for a period between two and ten years; and (iv) impose on natural persons who directly engage in monopolistic practices on behalf of legal entities or de facto entities, or under their instruction, a fine ranging from 1 to 680 base salaries. The base salary established for the year 2025 is CRC 462,200 (~US$925).
Additionally, there are specific provisions regarding these sanctions: (i) fines imposed on natural persons may not be paid or guaranteed by the legal entity to which the individual was related at the time the conduct occurred, nor by companies belonging to the same corporate group or under the same control; and (ii) if economic agents refuse to pay the fine, COPROCOM’s High Council shall certify the amount owed, which will constitute an enforceable instrument, and judicial enforcement proceedings will be initiated.
The information provided by ARIAS® is presented for informational purposes only. This information is not legal advice and is not intended to create, and does not constitute, an attorney-client relationship. Readers should not act upon this information without seeking advice from professional advisers.