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Chilean Competition Tribunal upheld the antitrust agency’s merger prohibition in the healthcare insurance industry

06 / 09 / 2022

On February 2022, the Antitrust Agency’s (Fiscalía Nacional Económica, FNE) prohibited the acquisition of two private health insurers (locally called ‘Isapres’), Isapre Colmena by Nexus Heath (a US-based holding of Isapre Nueva Masvida).

In its decision, the FNE ruled that the merger would substantially lessen competition in the private healthcare insurance market, raising healthcare plans’ prices to patients and new customers, as well as reducing plans quality and services. The transaction would also make coordination more likely and sustainable over time.

The merging parties submitted behavioural commitments which were considered ineffective by the FNE to addressed said concerns. Thereafter the undertakings challenged the FNE’s decision before the Chilean Competition Tribunal (Tribunal de Defensa de la Libre Competencia, TDLC), and last Monday, the TDLC issued a majority judgment –with one dissenting opinion- and the FNE’s decision was upheld.

The TDLC’s decision confirmed that the transaction, if closed, would lessen competition in the healthcare market and therefore, the prohibition legal standard was met. It also concluded that the transaction had no proven efficiencies and that no remedy was able to address the antitrust concerns raised by the transaction. While the behavioral remedies offered were insufficient and difficult to be monitored, the Court held there were no structural remedies available.