First Sanction Imposed in the Andean Community in Defense of Free Competition

By Vera Abogados

For 55 years, the Andean Community (CAN), comprising Bolivia, Colombia, Ecuador, and Peru, has stood as a cornerstone of Latin American regional integration, distinguished by its longevity and supranational structure. Its robust institutional framework allows member states to collaboratively pursue shared interests, fostering balanced and sustainable economic development.

In a landmark decision on September 17, 2024, the CAN enforced its first sanction under Decision 608, a 2005 regulation designed to safeguard free competition within the member states' markets.

This case involved the Kimberly-Clark Corporation (Kimberly Group), a multinational personal care corporation known for brands like Kleenex and Huggies, and Familia S.A. (Familia Group), a company specializing in personal hygiene and household cleaning products with a significant Latin American presence. Both companies were found to have engaged in cross-border anti-competitive practices within Ecuador's soft paper market between 2006 and 2013.

The CAN's General Secretariat determined that the Colombian parent companies directed their Ecuadorian subsidiaries to fix prices for products like toilet paper and towels. Consequently, sanctions were levied against the Kimberly Group and against the Familia Group.

The Andean Court of Justice (TJCA) upheld these sanctions on September 17, 2024, dismissing both companies' appeals and validating the use of both direct and indirect evidence. The court also addressed key legal aspects, including the admissibility of evidence from leniency programs, the handling of concurrent commitments, and the methodology for calculating and distributing fines.