CHILE - The Court of Defense of Free Competition of Chile rejected the lawsuit filed by Metalurgica Limited (Silcosil) against Masisa SA (Masisa) and Masisa Components SpA (Components), establishing that the defendants lacked a dominant position in the relevant markets, therefore could not have committed the abuses of a dominant position alleged in the complaint.

In its judgment, the Court held that the dispute involved two relevant markets: the production and marketing of melamine particleboard panels (upstream); and that relative to designing, manufacturing and marketing furniture ready to assemble (RTA) based on the aforementioned boards (downstream). The suit was presented by Silcosil in early 2015 and requested the imposition of fines for USD 16 million to each of the firms (Masisa and Components).

The Court determined that given the low market share of Components in the downstream market, the existence of predatory pricing behavior or unfair competition is ruled out.

With regard to the allocation of strangling margins, the Court held that there is no dominant market position upstream since boards from different producers are substitutable; the market share of Masisa has decreased considerably in recent years; and imports of this material set the limit ceiling prices that can be charged on the market.

Finally, the Court said that the allegation of cross-subsidization is not in itself a behavior that attempts against free competition, so it was not analyzed as such.