What’s the Role of Judicial Review in Latin American Countries?

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Paulo Furquim de Azevedo, Jul 16, 2014

Competition authority decisions reviewed by sluggish courts—this is the fate of competition policy in several Latin American countries. Competition authorities in Brazil, Chile, and Mexico, among others, have made impressive progress in building technical capabilities, consolidating their bureaucracy, and even, in some cases, improving their competition law. Yet ultimate enforcement still depends on something that is harder to change: judicial reviews by courts are mainly driven by formalism, courts lack expertise in antitrust issues, and they take years to solve cases that, as a general rule, require urgency.

This article explores the effects of judicial review of antitrust decisions in an administrative system subject to this type of judiciary. The empirical evidence and some institutional peculiarities presented herein refer to Brazil, but I submit that the story is not that different in other Latin American countries that share the same institutional design for competition policy.

Judicial review is an essential part of competition policy. In countries where the competition agency is an administrative body—the majority of Latin American countries—judicial review may improve, mitigate, or completely modify administrative decisions, and is, as a consequence, ultimately responsible for the enforcement of competition law.

On the one hand, judicial review of administrative decisions forces discipline on the actions of competition agencies, and, since the judiciary is less likely to be subject to the pressure of interest groups, decreases the probability of capture. In addition, at least in theory, adjudication by a larger, separate body helps decrease type I and type II errors by improving the quality of the final decision. On the other hand, judicial review may directly mitigate the enforcement of competition law, postponing antitrust decisions, and may add conflicting signals to economic agents by increasing jurisdictional uncertainty.