Papelera Cerrillos sued both companies before the Tribunal for the Defense of Free Competition (TDLC), alleging that this situation had triggered the financial crisis that the company faced and that ultimately led to its bankruptcy in 2008.
Experts describe this as an unprecedented precedent for free competition in Chile.
Papelera Cerrillos sued CMPC and SCA Chile before the Free Competition Defense Tribunal (TDLC), alleging that the so-called “tissue paper collusion” had triggered the financial crisis that the company faced and that ultimately led to its bankruptcy in 2008.
However, on December 6, 2023, the TDLC rejected the lawsuit, arguing that the calculations in Papelera Cerrillos' financial report contained methodological errors and lacked a causal explanation of the effect of collusion on the company's insolvency.
Cerrillos paper mill versus CMPC and SCA Chile for tissue collusion
But with a unanimous ruling by the Supreme Court - which even included the vote of former judge Sergio Muñoz - a new chapter has now been added, because both CMPC Tissue, the paper mill controlled by the Matte Group, and SCA Chile, will have to pay compensation for damages of US$5 million.
For the president of Conadecus, Hernán Calderón, he stressed that the ruling will serve as a basis for cases in which SMEs or small businesses may also be victims of the effects of collusion.
The Supreme Court stated in its ruling that “a price war creates a state of affairs that not only affects those companies that participate directly in it, but also forces other competitors to modify their prices in order to maintain their market share.”
Fernando Araya, a partner lawyer at Estudio Lewin and academic at Diego Portales University, stressed that this ruling revokes the belief that collusion only affects “downstream.”
For his part, Professor of Economic Regulation at the Universidad del Desarrollo and academic at Faro UDD, John Henríquez, said that it is relevant that this ruling reverses the decision of the TDLC, which does not recognize a correlation in the facts.
This is the first time since the implementation of the new free competition regime in 2016 that the Supreme Court has recognized that collusion harms third-party competitors.
