Free Competition and Acts of Authority

Published: 23 Sep 2020

In any meeting that discusses free competition, market and economy, the question will immediately arise about Smith's invisible hand, since history and case study have concluded that such hand was not always invisible; a phenomenon that prompted governments to intervene through state agencies to protect the free competition of competitors, in order to give their citizens better and more benefits of healthy competition.

Traditionally it was thought that the non-invisible hand in the economy had its origin in the private sector - among competitors - phenomena that over the years, was shown not to be totally true, since those of us who live in daily exercise, we can certify that the free will of Ecuadorian business action is interfered daily by acts of authority, which are inspired by noble ideals such as the promotion of proper economic development, social welfare or improvement in the quality of life of the population, commonly conclude by liquidating competitive uncertainty, by highly anti-competitive acts of authority, where the public hand ends up being quite visible

Since 2011, the national market, its operators and public authorities, we have a law and authority of free competition, an event that leads us to ask ourselves, should the acts of Authority and its public intervention in the economy be subject to the law of free competition? Should the public authorities provided for in article 2251 of the Constitution make prior control of their actions, within the framework of competition law?

Considering that the public administration must subject its actions to the Law, it is feasible to think and demand that the acts of authority be aligned with the norm of free competition. Under the same reasoning, it is feasible to affirm that the regulated state action, when it is attached to an anticompetitive legal mandate, will not be or may be reprehensible before or by the competition authority, as it is known as actions subject to ruled powers.

Coincidentally with the foregoing, the competition law provides that those unregulated state authority actions that contradict or omit the rules of free competition, which may harm consumers, reduce opportunities for innovation and incentive to increase the productivity of companies, hindering and slowing down the growth of the economy, have to be the object of the most energetic intervention of the state itself, through ex post intermediation of the Superintendency of Regulation and Control of the Market Power and of the economic operators themselves.

Since free competition law is a missing link in the Ecuadorian legal system, and constantly subject to uncomfortable or orthodox interpretations by economic operators, we must establish a line of conviction on certain legal considerations that are historically already recognized by authorities and world markets; That is why we must irrefutably conclude from the acts of public authority, they must be subject to the Law, rules and principles of free competition, only this will allow the invisible hand to remain invisible.

1. The agencies and dependencies of the Executive, Legislative, Judicial, Electoral and Transparency and Social Control functions. 2. 2. The entities that make up the decentralized autonomous regime. 3. 3. The organisms and entities created by the Constitution or the law for the exercise of state power, for the provision of public services or to develop economic activities assumed by the State. 4. 4. The legal persons created by normative act of decentralized autonomous governments for the provision of public services.

Gilberto A. Gutiérrez P. – Antitrust Consultants & Lawyers

Share this

About Us

Since 2005 Corporate INTL has been leading the way connecting business leaders, financiers and advisers around the world.

Our business publications reach hundreds of thousands of business leaders and decision makers in the finance and advisory communities worldwide.

Our Directory

Our Find an Expert adviser directory is the number one tool for business leaders, investors and in-house counsel to assist them in finding a proven and recommended adviser in a huge variety of practice area specialisms and countries around the world.

Mailing List

If you wish to join the Corporate INTL mailing list to receive newsletters and bulletins surrounding our products, key news, events and relevant stories related to global business, please click the link below and fill out the form provided.