Deterrent Effectiveness of Panama’s Competition Law Regime

Abstract

Competition law is fundamental for ensuring efficient markets and protecting consumer welfare, particularly in open economies with historically concentrated sectors such as Panama. In this context, this article examines the deterrent effectiveness of Panama’s competition law regime, focusing on absolute and relative monopolistic practices as well as the control of economic concentrations regulated primarily by Law 45 of 2007 and its implementing regulations. The objective of the study is to assess whether the current legal framework and its administrative enforcement are sufficient to prevent, detect, and sanction anticompetitive conduct effectively.

The research adopts a mixed-methods approach with a predominance of qualitative analysis. It develops a legal-dogmatic examination of the applicable framework, complemented by a socio-legal and comparative analysis based on standards from the European Union, the United States, and the Organisation for Economic Cooperation and Development (OECD). Additionally, a supporting quantitative analysis is incorporated using economic indicators such as the Herfindahl-Hirschman Index, the Gini index, and GDP growth.

The findings indicate that, although the Panamanian regime formally incorporates concepts aligned with international standards, it presents methodological, technical, and institutional weaknesses that limit its deterrent effectiveness. In particular, gaps are identified in the systematic use of economic tools, effects-based analysis, and the calibration of sanctions. The article concludes that strengthening competition policy in Panama requires the modernization of analytical methodologies and the reinforcement of the technical capacity of the enforcement authority.