ECUADOR Law and Practice Contributed by: Sebastian Corral Guevara, Miguel Pizarro Páez, María Fernanda Mencías Pérez, José Cisneros Pazmiño, Roque Bustamante Espinosa and Jorge Pizarro Páez, Flor Bustamante Pizarro & Hurtado
• authorising it subject to structural or behavioural remedies; or • prohibiting the concentration. The transaction may not be implemented until clear - ance has been obtained from the SEC. Decisions issued by the SEC may be challenged through the administrative remedies provided under the LORCPM and, subsequently, before the Ecuadorian administra - tive courts. 6.3 Cartels The LORCPM prohibits anti-competitive agreements and concerted practices between economic opera - tors. The prohibition applies to both horizontal agree - ments (between competitors) and vertical agreements (between undertakings operating at different levels of the production or distribution chain), where they have as their object or effect the prevention, restriction or distortion of competition. Particularly serious infringements include hardcore cartels, such as agreements between competitors to fix prices, allocate customers or markets, restrict pro - duction or output, or rig bids in public or private pro - curement procedures. These practices are considered the most serious restrictions of competition and are generally prohibited without the need to demonstrate their actual anti-competitive effects. The LORCPM applies not only to conduct carried out within Ecuador, but also to conduct implemented abroad where it produces actual or potential effects in the Ecuadorian market, in accordance with the effects doctrine. The SEC enjoys broad investigative powers. In the course of an investigation, it may: • require the production of accounting records, cor - respondence (including electronic records), elec - tronic data and any other documents relevant to the investigation; • summon and interview the parties under investiga - tion, their representatives, employees and third parties; and • conduct inspections, with or without prior notice, at business premises. During an inspection, the SEC
may examine documents, copy physical or elec - tronic records and gather other relevant evidence. Where the investigation involves a private residence, forced entry into business premises, seizure or reten - tion of documents or access to confidential or legally protected information (including bank records), the SEC must obtain prior judicial authorisation in accord - ance with the LORCPM. The exercise of these investi - gative powers is expressly subject to the Constitution, due process and the protection of fundamental rights. Any natural or legal person, whether public or private, is required to co-operate with the SEC by providing the information and documentation lawfully request - ed. Failure to comply may result in the administrative sanctions provided for under the LORCPM. Decisions issued by the SEC may impose significant administrative fines, behavioural or structural rem - edies and cease-and-desist orders. Such decisions may be challenged through the administrative rem - edies established under the LORCPM and, subse - quently, before the Ecuadorian administrative courts. 6.4 Abuse of Dominant Position The LORCPM prohibits the abuse of a dominant posi - tion by one or more economic operators. Holding a dominant position is not unlawful in itself; only its abu - sive exercise is prohibited. The LORCPM contains a non-exhaustive list of abu - sive practices, including unjustified refusals to deal, discriminatory or unfair commercial conditions, preda - tory pricing, tying and bundling practices, exclusive dealing arrangements and any other conduct capa - ble of excluding competitors or exploiting customers, suppliers or consumers. Unlike anti-competitive agreements, allegations of abuse of dominance are assessed on a case-by- case basis. The SEC examines, among other factors, whether the undertaking possesses substantial mar - ket power in the relevant market and whether the con - duct has the object or effect of preventing, restricting or distorting competition.
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