This content is from: Local Insights

Colombia

Unfair competition - SIC asserts its increased jurisdictional authority in telecoms ruling

Under Law 446 of 1998, the Superintendency of Industry and Commerce (SIC) was granted authority regarding matters of unfair competition. Law 446 was modified with the enactment of Law 510 of 1999, under which the SIC was granted jurisdictional powers. Law 510 states that, once the SIC issues a decision regarding a case involving acts of unfair competition, and this decision is not subject to appeal, the person or entity affected by such acts can file a petition before the SIC in order for it to liquidate all damages that were caused.

Recent legislative reforms have made surveillance and control by the SIC possible, and have provided better conditions for competitors and consumers, with the purpose of making the market system more competitive. This evolution can be shown in a recent decision in which the SIC sanctioned an important Colombian cellular telephone company.

In this case, the cellular telephone company provided international dialing services with international protocol technology without being legally authorized to do so. This afforded the company a competitive advantage over authorized operators. According to the SIC, by doing so the company breached article 60 of Decree 741 of 1993, which provides that long distance communications services that are originated or received by mobile cellular telephone users must be done through the Public Commuted Telephone Network (Red de Telefonía Pública Conmutada) and cannot be provided directly without prior authorization.

The cellular company used advertising and the rendering of long distance services to attract clients. Due to this unfair conduct, the SIC not only fined the company, but additionally, by means of the jurisdictional powers granted to it and as a result of petitions made by affected competitors, will proceed to compensate for all damages.

This decision sets a precedent for rulings on unfair competition in Colombia by indicating that competition is protected by entities such as the SIC.

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