Since the start of 2018, following a period in which it focused on the persecution of cartels, the Administrative Council for Economic Defence (CADE) has directed more resources towards concluding pending abuse of dominance matters and occasionally launching new dominance cases. In so doing, the most pertinent question has become: how will CADE deal with dominance in future?
The Administrative Council for Economic Defence (CADE) and the Central Bank recently entered into a memorandum of understanding. This initiative strengthens the relationship between the two authorities and promotes greater cooperation among them for the analysis of merger cases and anti-competitive practices by financial institutions. It also represents an important step forward, signalling the end to the longstanding dispute between CADE and the Central Bank over jurisdictional conflicts.
The Ministry of Finance recently issued Decree 9,299/2018, which partially changed the structure of the Brazilian Competition Policy System (BCPS). The BCPS undertakes three main activities: preventive control, repressive control and competition advocacy. The restructuring focuses on the promotion of competition advocacy in the country.
In its May 20 2015 judgment session the Administrative Council for Economic Defence (CADE) approved the Guidelines for Gun Jumping Analysis in Merger Filings. The primary purpose of the guidelines is to prevent the implementation of a transaction (full or partial) before receiving CADE's final approval. The guidelines enable parties to perform their activities in a legal way, minimising the risk of penalties
The Administrative Council for Economic Defence (CADE) recently approved Resolution 12, which regulates the consultation process stipulated under the Competition Law. Although the new consultation process is an important tool for clarifying questions regarding the application of competition laws, the submission of consultations must be considered with caution, as the CADE tribunal can initiate administrative procedures using the evidence that it has already received.
The Administrative Council for Economic Defence (CADE) recently approved Resolution 10, which sets forth the criteria for submitting associative agreements for CADE approval. Companies that meet the submission criteria must analyse their contracts carefully before they are executed. Applicable parties that do not notify CADE may be subject to fines of up to R60 million and may have previously implemented acts annulled.
As in other jurisdictions, the Brazilian authorities have been striving to build a well-respected leniency programme. Evidence from recent years suggests that before allowing a company to benefit from its leniency programme, the Administrative Council for Economic Defence has become more demanding, requesting strong evidence of the existence of collusion, as well as proof of any (potential) impact in the country.
Under the former Brazilian merger control system, several non-classical M&A transactions were subject to merger review by the Administrative Council for Economic Defence. This broad statutory language left much room for uncertainty. With the introduction of the new law, the open-ended wording of the former law has been replaced by a list of reportable transactions.
Since the entry into force of the new Competition Law, practitioners, investors and the competition authority have spent much time discussing the review of transactions involving investment funds. Most issues in connection to these discussions arise as a result of the authority's regulation that sets forth a broad definition of 'group of companies' whenever investment funds are involved.
The year 2012 was key for the modernisation of antitrust law and policy in Brazil, with the new Competition Law finally entering into force. The new legal framework changed the dynamics of the antitrust review process – not only for the antitrust authority, which now has a new deadline to review merger cases, but also for companies, which must now deal with a ban on closing obligations during the merger review process.
The Administrative Council for Economic Defence recently cleared the first two mergers requiring remedies since the new Competition Law entered into force one year earlier. Both cases were analysed by other jurisdictions, since the companies are based abroad, and international cooperation with European competition agencies was effective in determining the cases' outcomes.
The Administrative Council for Economic Defence (CADE) recently fined the Brazilian Public Performance Collecting Rights Society (and its six associations) approximately $19 million for engaging in price fixing. CADE stated that the society and the associations had acted in a concerted manner to fix the rates that they collected in relation to royalties for public performances.
Following implementation of the new merger control regime, the Administrative Council for Economic Defence (CADE) has shifted its focus to establishing new settlement rules for its leniency programme, with the aim of encouraging more companies to blow the whistle on cartel cases. However, uncertainties in relation to fines and the new obligation to admit to participation in a cartel may undermine CADE's good intentions.
There is a general consensus that one of the main purposes of the new antitrust legislation is to reduce the submission of irrelevant M&A transactions and to allow the Administrative Council for Economic Defence to focus on relevant mergers and conduct cases. However, as far as investment funds are concerned, it appears that the legislation has not yet achieved its goal.
The new Brazilian antitrust legislation recently entered into force. The legislation includes changes to the pre-merger system, as well as the introduction of notification thresholds, statutory time periods and notification forms. The new regime aims to bring Brazil into line with US and European antitrust standards, and will present a significant challenge for the authorities and professionals that must adapt to the new system.
The Administrative Council for Economic Defence (CADE) recently granted an injunction suspending the rights of a steelmaker to buy shares in its rival. This ruling consolidates CADE's view that the acquisition of a minority stake in a rival company may generate competition concerns, even if the acquiring company has no relevant influence on the target deriving from its position as a minority shareholder.
The Administrative Council for Economic Defence (CADE) recently carried out an internal survey showing that a total of 892 merger cases were heard in 2011. According to CADE President Olavo Chinaglia, this impressive figure is a result of both the increasing number of notified cases, thanks to growth in the Brazilian economy, and the enhanced ability of CADE personnel to deal with the increasing workloads.
Congress has finally approved the new antitrust law. The bill makes several important changes that will affect the whole antitrust system. These include the creation of the Administrative Council for Economic Defence, the introduction of a pre-merger notification for merger control cases and an amendment to the notification threshold, as well as an increase in the penalty for cartel crimes.
CADE recently voted in favour of implementation of a performance agreement for BRFoods in response to its merger, which included suspension and sale of its brands. For many antitrust specialists, this decision represents a setback, as they feel that a strong competitor will not emerge to challenge BRFoods' market power. For the decision's critics, licensing of the brands would have been a safer way to ensure competition.
Brasil Foods SA was created around two years ago after Perdigão SA acquired its competitor Sadia SA. The Administrative Council for Economic Defence recently started its consideration of the merger. Following detailed analysis reviewer Carlos Ragazzo, a commissioner in charge of deciding the case, understood that the merger should be blocked. Final judgment has been postponed to allow for further discussion.