Competition Authority in Colombia –Superintendence of Industry and Commerce- is legally empowered to conduct unannounced inspections -dawn raids- in private and public companies (include government institutions) to ensure compliance of the provisions on protection of competition at any time and does not have to get any authorization for this purpose.
Investigators of the Superintendence do not need a court warrant just an administrative act (inspection credential) from the Superintendent of Industry and Commerce, the Deputy Superintendent for the Protection of Competition or from the heads of the task forces that authorizes them to conduct the inspection. The Superintendence does not have police powers to force entry and only can search or get into the company with the consent of the occupant or proprietor. However, if such consent is not given the Superintendence is able to impose sanctions, as I will explain below.
At the beginning of the dawn raid members of the Competition Authority must identify themselves with the identity card of the Superintendence and the inspection credential mentioned above.
Companies can contact internal and external lawyers, but this would not prevent the Authority to begin the inspection.
Dawn raids usually takes place in the preliminary inquiry stage of the procedure. In this stage, there are not investigated parties or a determined infringement. It is a classified stage.
Powers of Competition Authority during a dawn raid
Superintendence has extensive powers granted by the Colombian Constitution and law (Article 15 of the Political Constitution of Colombia and Article 1.62, 1.63 and 1.64 of Decree 4886, 2011) to search for evidence to verify the compliance of Competition Regime. Such powers are the following:
- Request, examine and make copies of the accounting books and other private documents of the company such as the organizational structure of the same, among others.
- Request, examine, collect and make copies of all kind of information (including digital documents, i.e. e-mails). Confidentiality cannot be opposed to prevent the collection of information. The members of the Superintendence may take a duplicate copy of the electronic data (e-mails) and store it on an external drive to continue looking for evidence at the Superintendence´s headquarters.
- Take depositions considered useful to clarify the facts object of the preliminary inquiry.
- In general, order, practice and collect all the information required to verify the compliance of competition rules.
The Authority’s search may not exceed the scope of the inspection indicated in the inspection credential.
Company can request to the Superintendence to maintain classified the information collected, even during the formal investigation. Also, it is necessary to mention that is Superintendence´s responsibility to maintain classified certain information according to the law (commercial secrets, personal information or in general sensitive information).
Inspection duration
The duration of the inspection vary. This depends on the information that the Superintendence needs to collect. If the inspection cannot be completed in one day, the members of the Superintendence can seal the office or space where the information is being copied or duplicated. The seal should not be breached under any circumstance. This could lead to sanctions even if the Superintendence verify that the information is complete and that no documents are missing.
All the circumstances and the facts that have place during the inspection would be recorded in writing –inspection report-. Such report must include the obstacles found to conduct the inspection, such as any refusal to release the required information. In addition, the company can add remarks in the report about particular matters like legal privilege, confidentiality of the information, among others.
The inspection report must be signed by the members of the Superintendence and by a representative of the company, once it is approved.
Other important rules
As mentioned, Superintendence is legally empowered to take depositions. In that regards, the members of the Competition Authority can interview any employee of the company.
The employees have to answer a question even if the same include some commercial sensitive information. Nonetheless, the respondent can inform this situation to the Superintendence and in any case can request the reservation of the information.
Respondents are not obliged to answer self-incriminating questions.
The interviews are recorded. Respondents can ask for a copy of their interviews after the inspection. Also, can ask for a copy of the information collected by the Superintendence.
Consequences of obstructing the inspection, refusing to submit the information required and failing to follow any direction given by the members of the Superintendence
The omission in duly comply with requests for information during the inspection, failing to comply with the orders and instructions provided in the same and obstruction of the inspection, lead to sanctions up to the sum of 100,000 current monthly minimum wages (27,240,528 USD aprox*) for the company and sanctions up to the sum of 2,000 current monthly minimum wages (544,810 USD aprox*) for any person who commits any of these behaviors.
Leniency Program
If the company knows or notices after the inspection that is not complying with Competition Regime, law provides the possibility to request the admission to the Leniency Program.
Leniency Program gives to the company (as a qualified participant in conduct violating the competition law) the possibility to co-operate with the investigation and benefit from a fine reduction. The program contemplates both complete and partial amnesty from fines (up to 50%) for business enterprises and individuals who participate in an anticompetitive agreement and who provide timely and effective assistance to the Superintendence in exposing and prosecuting the conduct involved.
To be admitted in the program and thus to access to the benefits, whistle blower must recognized its participation in the restrictive agreement or anticompetitive conduct. Also, must submitted information or proofs regarding the existence of the conduct (including activities, name of the other participants of the conduct, product or service involve, affected market, among others), cease with its participation in the anticompetitive conduct and address the requirements of the Superintendence.
* Conversions made at the Market Representative Rate (TRM in Spanish) of March 1, 2018. Exchange rate: COP$ 2.867,94 per dollar