Surbtc, Cryptomkt and Orionx in the Chilean Antitrust court: questions from the Argentinian market

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Gabriela Castillo Areco
Bomchil, Buenos Aires

Mercedes de la Fuente
Bomchil, Buenos Aires


The relationship between blockchain financial providers and traditional banking services differs by country. There are places where this relationship is evolving,[1] while in others it is not.[2] In Chile, three antitrust proceedings, initiated in 2018, involving companies willing to offer financial services based on blockchain, challenged traditional antitrust concepts. This article explores the key concepts behind those proceedings, to help us imagine what could happen in Argentina in a similar situation.

The cases

In 2018, the Chilean Free Competition Defence Tribunal (the ‘Tribunal’) received three separate claims as a consequence of the decision of some of the most important local banks to close crypto-exchange companies’ accounts and refuse to cooperate with them and any other crypto-company as clients: (1) Proceeding 349-18,[3] initiated on 20 April 2018 by SurBTC SpA (‘SurBTC’); (2) Proceeding 350-18,[4] initiated on 23 April 2018 by CryptoMKT (‘CryptoMKT’); and (3) Procedure 354-18,[5] initiated on 1 June 2018 by OrionX SpA (‘OrionX’ and jointly with SurBTC and CryptoMKT, the ‘crypto companies’). These three proceedings are still open and have been combined by the Tribunal to be jointly discussed and decided.[6]

Dominant position

The crypto companies submit that they compete with the banks in the downstream market for electronic means of payment. OrionX has a ‘payment button’ and both SurBTC and CryptoMKT have a payment management system using cryptocurrencies. All claims allege that the closing of bank accounts entailed an abuse of dominant position aimed at favouring Transbank, whose share capital is 77 per cent held by the defendants and is active in the payment market. OrionX’s lawsuit introduces the concept of the banks having a collective dominant position.

What has been said in Argentina about dominant position? Firstly, the Argentinian Antitrust Law 27,442 (LDC by its Spanish acronym) establishes that:

‘one or more people have a dominant position when, for a certain type of product or service, they are the only offerer or demander within the national market or in one or more parts of the world or, even without being the only one, it is not exposed to substantial competition or, when due to the degree of vertical or horizontal integration it is in a position to determine the economic viability of a competitor participating in the market, to its detriment’.[7]

As regards the collective dominant position, it can be defined as ‘when no individual company has market power, but jointly, when there is no effective competition between them or substantial competition from third parties’.[8] The Guide for the Analysis of Cases of Exclusory Abuse of Dominant Position (the ‘Guide’) prepared by the Argentinian National Commission for the Defence of Competition (CNDC)[9] recognises the existence of the collective dominant position[10] but does not analyse it.

In relation to the concept of the collective dominant position, in the case: Repsol YPF SA, Shell Compañía Argentina de Petróleo SA y Exxon Mobile Argentina S/Infracción Ley 25156 (C 1426), the Secretary of Commerce (following the CNDC’s advice) issued an injunction ordering the oil companies YPF, Shell and ESSO to sell jet fuel at a certain price lower than the price at which they had been selling. The rationale for such decision was the CNDC’s understanding that the jet fuel market was an oligopolistic market where the market power generated incentives to raise prices or decrease the supplied quantities. ‘The sale price of the aero kerosene charged by the firms under investigation (…) did not hold due proportion with the price that said product must maintain with other (petroleum) derivatives’ and that prima facie there was ‘an anti-competitive conduct[11] that would consist of the abuse of a dominant position by the YPF, SHELL and ESSO companies (…)’.[12] Also, in the case YPF SA, Shell Compañía Argentina de Petróleo SA, ESSO Petrolera Argentina SRL, Petrobras Energía SA y OIL Combustibles SA s/infracción Ley 25.156 (C1419), the Secretary of Commerce (following the CNDC’s advice) issued an injunction ordering the oil companies YPF, ESSO, Petrobras and Oil to sell gasoil to the passenger transportation companies on a non-discriminatory basis. The CNDC understood that there was an exploitative abuse of dominant position when the oil companies charged a higher price and less favourable financial conditions to the transportation companies that purchased bulk quantities.[13] Also in this case the CNDC described the gasoil product market as highly concentrated[14] and oligopolistic,[15] reinforced by the fact that the passenger transportation companies faced mobility costs as they ‘lack the ability to shift their demand to other gas stations to obtain lower prices’.[16]

The collective dominant position is difficult to analyse for any competition authority since the conduct is not an illegal agreement[17] and, if the agency gets involved, there is a risk of disrupting the natural dynamics of a market with hyper-regulation[18] even if that dynamic is the normal functioning of an oligopoly.

To determine the existence of a dominant position, it is necessary to define the geographic and product market where such position would be verified and determine its concentration levels.

The crypto companies submit that they compete with the banks in the payments market where the banks are active through Transbank. In one recent case, the CNDC analysed the market for electronic payment processing, focusing its analysis on the infrastructure behind debit and credit cards payments only.[19] A broader analysis including crypto has not been carried out locally.[20]

Refusal to deal

The crypto companies allege that the abuse of dominant position is carried out by the refusal – by the banks – to deal with them. The banks gave a wide variety of reasons as to why they do not cooperate or decided to no longer cooperate with the crypto companies, ranging from internal commercial policies to the assertion that the crypto industry is not regulated or that crypto companies do not enforce the necessary security measures vis-à-vis their clients.[21]

What has been said in Argentina? The law defines the refusal to deal as ‘[u]njustifiably refusing to satisfy specific requests, for the purchase or sale of goods or services, made under the prevailing conditions in the respective market‘.[22] To evaluate if a refusal to deal constitutes an exclusionary practice, it is relevant to analyse if such conduct has the potential to exclude or substantially weaken the affected customer to compete in, at least, one of the markets where it operates.

Regarding the commercial policy argument given by the banks, an interesting Argentinian case on point is the one related to Gammalink SA ('Gammalink'). In this case, Gammalink – an online gambling business – denounced Visa Argentina SA, ArgenCard S.A., American Express, Servicio Electrónico de Pagos SA, Gire SA and E-Payments SA for refusal to deal since all of them declined to process the payments made by its clients. For its part, Visa Argentina originally supplied the service but interrupted it later. Defendants argued that they could not contract with Gammalink because the betting and gambling business was outside of their commercial policy. Although the CNDC did not first examine whether the banks were dominant or not – or had implemented collusive conduct – prior to addressing their alleged refusal to deal, it concluded that no refusal to deal was in place since the respondents were not competitors at a downstream level: ‘Firstly, no elements have been found in the evidence collected that would determine the existence of intention to exclude GAMMALINK from the gambling activity by each of the accused, but it could be thought that as long as the accused have no interest in the activity of the complainant, it would have been more profitable for them to accept it as a client’.[23]

The holding in this case seems to suggest that the CNDC has accepted that the existence of an internal commercial policy may be an acceptable basis to reject the rendering of certain service (in this case, payment processing) for an entire spectrum of the market, as long as the service is denied to all agents of a given market and not only to some, in a discriminatory manner. As stated by the CNDC: ‘[I]n these cases, it appears that the refusal to sell is not carried out in a discriminatory manner against the complainant, but is applied to all its competitors due to commercial policy issues of the accused.'[24]It is worth asking ourselves the impact on innovation that such a decision may have if the CNDC followed the same rationale, especially when the control of bank accounts is exclusively in the hands of the banks, due to its regulation.

OrionX added another argument, that of the essential facilities doctrine. A good or service is considered essential for effective competition in the downstream market when there is no existing or potential substitute for the product or input that competitors need in such market.[25] In this sense, the antitrust authority will analyse if the refusal refers to a good or service that is essential for effective competition in the downstream market and that concept is not necessarily restrained to infrastructure. Locally, the financial market is heavily regulated. There are many resolutions – ‘intended to eliminate informal operations, avoid tax evasion, money laundering and also for tax collection purposes – that results in the channelling of most of the legal transactions through the intervention of financial institutions regulated by Law No 21,526’.[26] In addition to the above, recently the Central Bank issued Communication ‘A’ 6859 (supplemented by Communication ‘A’ 6885) that establish that 100 per cent of payment services provider’s (PSP) customer funds must be deposited, at all times, in on-demand accounts in Argentinian pesos in financial entities in the country.[27] With this in mind, if a similar situation ever happened in Argentina, the authority would probably need to provide a definition on whether bank accounts can be considered essential facilities or not.

Damage to the general economic interest

Certain conduct is illegal under Argentinian antitrust laws when it affects the general economic interest.[28] For the general economic interest test, the ‘relevant party/ies need to have considerable market power, because absent the same consumer welfare could not be affected’.[29] Plaintiffs recognised that the size of the crypto economy is marginal,[30] however, if crypto companies were to disappear, consumers would be left without the possibility of investing through this channel or carrying out their economic activity and payments with cryptocurrencies.

When referring to this fast-evolving technology, will the Tribunal consider the disappearance of the exchanges as a threat to the general economic interest or will it require them to be a real threat to the banks?[31] If the idea is innovative but has yet not been favoured by the network effect, wouldn’t its disappearance constitute a true impact on the general economic interest? Do antitrust authorities have the necessary tools to assess this? On the other hand, can the authorities validate and protect all undertakings based on the promise of a revolution in a certain market that would increase the consumer’s welfare? At the end of the day, if a company survives or not is the result of the decision of well-informed consumers active in a competitive market.

One last concept

In 2018, stablecoins[32] had not yet become as popular as they are today. Currently, their growth and adoption in certain regions of the world is significant as they are regarded as a means to protect against the inflationary economies of certain Latin American countries, such as Argentina. While some governments are beginning to study the issue and banks are analysing how to adapt to them, the decentralised finance ('DeFi') market is growing fast and showing itself as a less expensive, more profitable competitor to the banks[33] and attracting a steady amount of funds. Once a final resolution is issued in the cases under analysis, it will be received by a new reality, different to the one in place in 2018, when the claims were filed.

[1] iProUP, ‘Bitcoin and other cryptocurrencies are now ‘legal’ to operate in banks’ (iProUP, 10 August 2020),El%20Bitcoin%20y%20otras%20criptomonedas%20ahora,legales%22%20para%20operar%20en%20bancos&text=Seg%C3%BAn%20una%20actualizaci%C3%B3n%20del%20sitio,criptomonedas%20para%20cotizar%20y%20negociar, accessed 15 September 2020.

[2] Cointelegraph, ‘Complete Ban: China Blocks Foreign Cryptocurrency Exchanges to Counter 'Financial Risks’(Cointelegraph, 5 February 2018), accessed 15 September 2020.

[3] The respondent banks are Banco Estado de Chile, Banco Itaú, Banco Santander-Chile, Banco de Crédito e Inversiones, Banco de Chile, Banco BICE, Banco Scotiabank Chile, Banco Security, Banco internacional and Banco Bilbao Vizcaya Argentaria Chile SA. The anticompetitive conducts that were allegedly carried out by the banks were mainly the abusive exploitation of a situation of economic dependence and exclusionary practices like arbitrary discrimination and refusal to deal.

[4] The respondent banks are Banco Estado de Chile, Banco Scotiabank Chile, Banco Santander-Chile, Banco de Crédito e Inversiones, Banco de Chile, Banco BICE, Banco Itaú, Banco Security, Banco Internacional and Banco Bilbao Vizcaya Argentaria Chile SA (BBVA), and the conducts the same as in note 3 above. CryptoMKT is active in Argentina.

[5] The respondent banks are Banco Estado de Chile, Banco de Chile, Banco Bice, Banco Itaú Corpbanca, Banco Santander-Chile and Scotiabank, and the claim alleges that they would be collectively abusing their dominant position by refusing to sell an essential input.

[6] As of 10 September 2018, the three procedures were combined by order of the Tribunal on the basis that there are sufficient similarities between these procedures to merit the Tribunal issuing a single resolution on the matter.

[7] Law No 27442, April 2018 (BO 33870) Section 5.

[8] Ariel D Lambert, Revista Argentina de Derecho Empresario, IJ-XLIII-361 citing Gabriel A. Martínez Medrano and Gabriela Soucasse in ‘The abuse of dominant position in the antitrust law’, accessed 15 September 2020.

[9] The LDC has established a National Antitrust Authority. Such authority has still not been put in place and the CNDC is carrying out the active investigations.

[10] ‘In these guidelines, the concept of dominant position always refers to cases in which it is owned by only one firm. However, Section 5 of Act 27, 442, also provides for the possibility that in certain cases there may be ‘more than one person’ holding a dominant position in a market. In some jurisdictions, however, the term ‘joint dominant position’ is used to refer to situations in which a group of undertakings holds a position in the market that allows them to coordinate actions, thus exercising significant market power. The latter will not be analysed here, since these guidelines only concern cases of unilateral abuse of dominance’. CNDC, Guidelines for the Analysis of cases of Exclusionary Abuse of Dominance (May 2019) accessed 15 September 2020.

[11] Paragraph 103 of the CNDC report attached to the administrative decision in Repsol YPF SA, Shell Compañía Argentina de Petróleo SA y Exxon Mobile Argentina s/infracción Ley 25156 (C 1426) Secretary of Domestic Commerce, Resolution No. 17 (12 March 2012), accessed 15 September 2020.

[12] The procedure was ultimately dismissed as YPF was expropriated by the same government that imposed the injunction. Repsol YPF SA, Shell Cia Argentina de Petróleo SA y Exxon Mobile Argentina s/infracción Ley 25156 (C 1426) Secretary of Commerce, Resolution No. 95 (9 Feb 2017) accessed 15 September 2020.

[13] The CNDC understood that purchases in bulk quantities should be treated more favourably and not as in the case under their analysis. YPF SA, Shell Compañía Argentina de Petróleo SA, Esso Petrolera Argentina SRL, Petrobras Energía SA y Oil Combustibles SA s/ infracción Ley 25.156 (C. 1419) Secretary of Commerce, Resolution No. 6 (26 January 2012) accessed 15 September 2020.

[14] The geographic market was defined as ‘the area of influence of the gas station’ and was limited to 50km scope in rural jurisdictions and 15 blocks in urban areas. Ibid.

[15] The companies under investigation had 95 per cent of the market and specifically one of them had 61 per cent of the national market (reaching 98 per cent in certain jurisdictions). Ibid.

[16] Such mobility constrains are known publicly in the market and according to the agency it was used by the oil companies to reinforce their market power. By the time of the issuance of the aforementioned resolution, YPF was planning to create an additional barrier. Ibid.

[17] The existence of an agreement between the parties is ruled out since that would become the hypothesis of an anti-competitive agreement. See Gencor Ltd v Commission’, Court of First Instance [1999], accessed 15 September 2020.

[18] Jaime Folguera Crespo and Borja Corral, ‘The position of collective dominance: current state of a long evolution’ accessed, 15 September 2020.

[19] The CNDC highlighted in its analysis (that resulted in the issuance of recommendations to the Central Bank and the Secretary of Commerce to start a procedure against Prisma Medios de Pago S.A. ((‘Prisma’) and their shareholders) the fact that 9 of the 10 largest banks in the country – in terms of deposit level – were Prisma’s shareholders. See paragraph 59 of the CNDC report attached to the market investigation entitled ‘Tarjetas de Crédito, Débito y medios de pago electrónicos s/ investigación de Mercado (C 1596)’ Secretary of Commerce, Resolution No. 17 (29 August 2016) 15 September 2020.

[20] SurBTC and Cryptomarket also understand that they horizontally compete with the respondents in the market of bank accounts and of currency exchange and remittance transfers.

[21]In the words of the Santander bank:

‘Santander requires, from a risk-based approach, to have sufficient background information that allows it, among other things, to know the origin of the funds, who is behind the transactions and what are the control measures adopted by the Exchanges to know their customers. In this way, the fact that an infinite number of users are not registered in the Exchanges and, even so, can intervene on their platforms, fully justifies the conduct of Santander’

Santander Bank’s reply (12 Jul 2018),

[22] In addition to the above, to be considered a violation of the Competition Act it requires the concurrence of the requirements of section 1 of the Tribunal de Defensa de la Libre Competencia (restriction of competition or abuse of dominance, potential injury to the ‘general economic interest’). Notwithstanding, and specifically for this kind of abuse, the Argentinian case law has not always focused on the status of competition downstream or on the effect on consumers. Marcelo den Toom explains that ‘Implicit in this observation seems to be the understanding that, for the authorities, a competitor, regardless of its importance (or even, particularly in case of new entrants), deserves to compete on equal footing to all others’ – Marcelo den Toom – ‘Argentina’in International Encyclopaedia of Laws: Competition Law (Kluwer Law International, 2020).

[23] As regards Visa and MasterCard, the authority also analysed if there was any justification for their refusal to trade since for ‘refusal to sell to constitute anticompetitive conduct it must be unjustified.’ Despite the fact that evidence in the file did not show rationality in Visa’s and Mastercard’s arguments, in this last analysis the CNDC indicated that claimants’ justifications were not enough to prevail over the defendant’s principle of innocence. See Gammalink SA s/ solicitud de intervención CNDC (c 1170), Secretary of Commerce, Resolution No. 134 (16 Nov 2012), accessed 15 September 2020.

[24] See CNDC report attached to the resolution in note 24 above.

[25] Marcelo den Toom, Argentina’ in International Encyclopaedia of Laws: Competition Law (Kluwer Law International, 2020).

[26] Daniel Herrera, ‘The bank account as an essential service. The closure of the account at the will of the bank, without expression and existence of cause. Its constitutionality’ (Diario DPI, 22 February 2017), accessed 15 September 2020.

[27] ‘The regulation applies to PSP meaning those legal entities that, without being financial institutions, fulfil at least one function within a retail payment scheme, within the global framework of the payment system. The regulation does not clarify whether it includes payments in money or whether it also includes other assets such as crypto assets’. Maria Victoria Funes and Lucia Carro ‘Fintech regulation in Argentina’ (Thomson Reuters, 09 Mar 2020) AR/DOC/571/2020.

[28] It is generally understood that ‘general economic interest with that of economic efficiency, that is, the sum of consumer surplus (the difference between what the consumer would pay for a relevant product or service and what he or she effectively pays) and the producers surplus (the economic benefit obtained by them from the sale). Thus a conduct would be anticompetitive if it has the potential to reduce the total surplus of a certain relevant market’. Marcelo den Toom, Argentina’ in International Encyclopaedia of Laws: Competition Law (Kluwer Law International, 2020).

[29] Marcelo den Toom, Argentina’ in International Encyclopaedia of Laws: Competition Law (Kluwer Law International, 2020).

[30] Paragraph 101 of SurBTC’s claim (20 Apr 2018),

[31]Santander explained that Orionx had only performed 99 payment transactions and therefore, the plaintiff could not be considered a competitor as payment platform. Page 34 of Santander’s reply (12 Jul 2018),

[32] ‘A stablecoin is a new class of cryptocurrencies that attempts to offer price stability and are backed by a reserve asset. Stablecoins have gained traction as they attempt to offer the best of both world’s—the instant processing and security or privacy of payments of cryptocurrencies, and the volatility-free stable valuations of fiat currencies’. Adam Hayes, ‘Stablecoins’ (Investopedia, 30 June 2020),, accessed 14 August 2020.

[33] ‘Earlier this year, San Francisco start-up Compound promised yield-hungry investors something rarely seen in the US: interest rates that exceeded 10 per cent at times, just for moving money on to its app’s lending platform.’ Miles Kruppa and Hanna Murphy ‘DeFi’ movement promises high interest but high risk’ (Financial Times, 30 December 2019), accessed 14 August 2020.

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