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Chilean Competition Tribunal fines two aerial firefighting companies USD$ 6,5 million for cartel conduct

27 / 01 / 2022

The Chilean Competition Tribunal (Tribunal de Defensa de la Libre Competencia) upheld the FNE’s accusation filed in July 2018 against Faasa Chile Servicios Aéreos Limitada and Martínez Ridao Chile Limitada for forming and maintaining a cartel to allocate contracts by agreeing the prices and conditions they would offer to their clients in the market of aerial firefighting with air tankers in Chile between 2009 and 2015.

The Chilean Competition Tribunal imposed fines on these companies totaling USD$ 6,5 million; USD$ 1,5 million for Faasa Chile Servicios Aéreos Limitada and USD$ 5 million for Martínez Ridao Chile Limitada. In addition, the tribunal ordered these companies to adopt a competition compliance programme that satisfies the standards and requirements established in the FNE’s Guide on Competition Compliance Programmes (Guía de Programas de Cumplimiento de la Normativa de la Libre Competencia).

In the ruling, the Chilean Competition Tribunal states: “The agreement reached by the Accused Companies gave them market power and with this the ability to produce harmful effects regarding the competition in the relevant market. This occurred because the agreement involved two of the main suppliers in the market and, due to this, it eliminated the competition that should have existed between them, increasing their market power”.

Among the entities that were negatively affected by this cartel are governmental agencies such as the National Forest Corporation (CONAF) and the National Office of Emergency (ONEMI), and some private forestry companies.

The National Economic Prosecutor, Ricardo Riesco, said: “This ruling proves the existence of an agreement that affected a very sensitive market, that is, the aerial firefighting with air tankers in Chile. The accused companies belong to international groups that operate in Spain and other European countries and have been investigated overseas for similar conduct. This case confirms the need to remain vigilant and to maintain a close level of cooperation and coordination with international competition agencies and authorities in order to obtain evidence to prosecute cartels”.  

The investigation of the FNE

The FNE launched its investigation in February 2017, after having learned through the press that the Spanish authorities indicted several aerial firefighting companies for allocating geographical markets in Spain and abroad, including Italy, France, Portugal and Chile. Only two of these companies operated in Chile through subsidiaries or related companies, that is, Faasa Chile Servicios Aéreos Limitada and Martínez Ridao Chile Limitada.

During the investigation the FNE raided the aforementioned companies in May 2017, obtaining evidence of meetings and communications held between executives of both companies in which they discussed and coordinated their participation in the affected market.

The investigation concluded that Faasa Chile Servicios Aéreos Limitada and Martínez Ridao Chile Limitada coordinated their actions in the market through a single and continuous agreement, celebrated with the sole purpose of allocating contracts regarding aerial firefighting services with air tankers in the procurement processes led by private and public entities, between 2009 and 2015.