ECUADOR’S CEMENT CASE UNDER THE NEW ANTITRUST LAW

Abstract

This paper will analyze the consequences of the Organic Law for Regulation and Control of Market Power in the cement sector in Ecuador. The cement industry in Ecuador is only composed by four market agents: Holcim, LaFarge, Chimborazo and Guapán. This leads to a potential problem due to market dominance. Therefore, the new Organic Law for Regulation and Control of Market Power is in charge of regulating and monitoring market imperfections to avoid unfair practices. In Ecuador, it is feasible to invest in a cement company. There are no restrictions about it. However, there are high entry barriers due to the high initial investment to create a cement factory, therefore there are not to many people that are willing or able to take the risk of investing in this sector. Due to the nature of the industry, especially for the high costs of machinery and transportation, it can be argued that a natural oligopoly is presented.