New SCE guidance on economic concentrations
The Superintendence of Economic Competition (SCE) has officially issued the Guidelines for the analysis of economic concentration operations, a new regulatory instrument that seeks to strengthen transparency, consistency and predictability in the application of the prior control regime established in the Organic Law on Regulation and Control of Market Power (LORCPM).
The publication represents an important technical advance, as it standardises the criteria by which economic concentration operations notified to the authority will be evaluated. This will allow companies to improve their legal and strategic planning in mergers, acquisitions and business alliances.
Among the highlights, the guide:
- Clearly defines what, how and when a concentration must be notified.
- Introduces advanced economic analysis tools such as GUPPI (Gross Upward Pricing Pressure Index), IPR (Relative Market Power Indicator) and UPP (Upward Pricing Pressure), as well as a significant lessening of competition test.
- It recognises horizontal, vertical and potential relationships between the parties involved, in line with international standards.
- It establishes clear criteria and reasonable limits regarding non-competition clauses.
ECIJA Ecuador's Competition Law practice, comprising Michael Veintimilla, Bernardo Maya and Luis Vicente Bueno Montero, has prepared a detailed analysis of this new guide, its practical implications and the critical points to be considered by companies planning mergers in the country.
