CONDUCTS ENFORCEMENT IN BRAZIL
FREQUENTLY ASKED QUESTIONS
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CONDUCTS ENFORCEMENT IN
BRAZIL
FREQUENTLY ASKED QUESTIONS
Coordinator
Guilherme F. C. Ribas
Authors
Ademir Antonio Pereira Júnior
Adriana Giannini
Ana Cristina von Gusseck
Kleindienst
Ana Frazão
Ana Luise Solon Sabatier
Ana Paula Paschoalini
André Santos Ferraz
Angelo Gamba Prata de Carvalho
Anna Binotto
Anna Olimpia de Moura Leite
Barbara Luvizotto
Bernardo Gouthier Macedo
Bruno Almeida Silva
Caio Machado Filho
Carolina Destailleur G. B. Bueno
Caroline Guyt França
Cristiane Landerdahl de Albuquerque
Daniel Douek
Danilo Orenga
Débora Mazetto
Denise Junqueira
Eduardo Caminati Anders
Eduardo Molan Gaban
Eduardo Ribeiro Augusto
Elvino de Carvalho Mendonça
Enrico Spini Romanielo
Fabiana Nitta
Fabiana Tito
Fábio Nieves Barreira
Fabricio A. Cardim de Almeida
Felipe Cardoso Pereira
Felipe Pelussi
Fernanda Dalla Valle Martino
Fernanda Duarte Calmon Carvalho
Fernanda Nemer
Francisco Ribeiro Todorov
Frederico Haddad
Gabriel Silva Takahashi
Gabriel Ursi
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Gabriela da Costa Carvalho Forsman
Gabriela Monteiro
Graziella Angela Tinari Dell’Osa
Guilherme Teno Castilho Misale
Gustavo Madi Rezende
Henrique Santos Raupp
Isabela Maiolino
Jackson de Freitas Ferreira
Jessica Olivieri
João Ricardo Oliveira Munhoz
José Carlos Berardo
José Del Chiaro Ferreira da Rosa
José Rubens Battazza Iasbech
Joyce Midori Honda
Julia Raquel Haddad
Leda Batista da Silva Diôgo de Lima
Leonardo Duarte
Leonardo Peres da Rocha e Silva
Leonardo Vieira Arruda Achtschin
Lígia Melo
Lorena Leite Nisiyama
Lucas Griebeler da Motta
Luis Claudio Nagalli Guedes de
Camargo
Luiz Felipe Rosa Ramos
Luiza Kharmandayan
Marcelo Calliari
Marcelo Laplane
Marcio C. S. Bueno
Marcos Lima
Marcos Pajolla Garrido
Maria Eduarda Scott
Maria Wagner
Mariana Villela
Marília Cruz Avila
Marina Antunes Maciel Sertã
Mauro Grinberg
Michelle Marques Machado
Murilo Machado Sampaio Ferraz
Natali de Vicente Santos
Paulo Adania Lopes
Paulo Leonardo Casagrande
Pedro H. R. Cini
Pedro Paulo Salles Cristofaro
Priscila Brolio Gonçalves
Rachel Pinheiro de Andrade
Mendonça
Renan Cruvinel de Oliveira
Renata Arcoverde
Ricardo Inglez de Souza
Ricardo Lara Gaillard
Ricardo Leal de Moraes
Ricardo Pastore
Roberto Potter
Rodrigo Almeida Edington
Rodrigo Dall’Acqua
Rodrigo Mudrovitsch
Rodrigo Santos
Silvia Fagá de Almeida
Sofia Campelo
Sonia Marques Döbler
Stephanie Scandiuzzi
Tatiana Lins Cruz
Thaiane Abreu
Thales de Melo e Lemos
Thiago Marini
Tiago Cortez
Ticiana Lima
Vicente Bagnoli
Victor Santos Rufino
Vinícius Cardoso
Vinicius da Silva Ribeiro
Vitor Jardim Barbosa
Yasmine Nemer Hajar
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TABLE OF CONTENTS
Foreword......................................................................................................... 4
About the coordinator ................................................................................... 10
About the authors ......................................................................................... 10
What are the criteria for the characterization of sham litigation?
Anna Binotto, Frederico Haddad, Ticiana Lima and Vitor Jardim Barbosa
.................................................................................................................. 29
What are the takeaways on state-owned enterprise responsibility and Cade’s
jurisdiction in the financial market from the payroll loans case? .....................
Vicente Bagnoli ....................................................................................... 36
MAP: is ‘minimum advertised price’ allowed under the Brazilian antitrust
law?
Luiza Kharmandayan and Priscila Brolio Gonçalves .............................. 40
Are territorial restrictions a violation to the Brazilian antitrust law?
Murilo Machado Sampaio Ferraz ............................................................ 47
What are the main differences between vertical restraints and vertical
integration?
Marcos Lima............................................................................................ 52
Antitrust discrimination: where are we and what are the envisioned
challenges for the future?
Gabriela da Costa Carvalho Forsman and Lucas Griebeler da Motta ..... 57
Refusal to deal: what are the negative effects in vertical markets?
Leonardo Vieira Arruda Achtschin ......................................................... 65
Is selective distribution legal under Brazilian competition law?
José Carlos Berardo and Pedro H. R. Cini .............................................. 70
How does the Brazilian antitrust authority understand the standard and
burden of proof on unilateral conducts investigations?
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João Ricardo Oliveira Munhoz, Renan Cruvinel de Oliveira and Victor
Santos Rufino ........................................................................................... 77
How can economic analysis help assessing issues related to foreclose and
conglomerate effects?
Débora Mazetto and Fabiana Tito ........................................................... 84
What are the antitrust challenges faced by the payment industry?
Denise Junqueira and Maria Eduarda Scott ............................................. 91
Is there a special treatment for unilateral conducts’ cases in regulated
sectors?
André Santos Ferraz and Cristiane Landerdahl de Albuquerque ............ 97
Are there standards to determine whether innovation is predatory?
Ademir Antonio Pereira Júnior, José Del Chiaro Ferreira da Rosa and
Luiz Felipe .............................................................................................. 103
How has Cade judged cases involving the digital economy?
Anna Olimpia de Moura Leite, Bernardo Gouthier Macedo, Gabriel
Silva Takahashi and Silvia Fagá de Almeida ......................................... 111
What are the recent developments regarding criminal investigations of cartel
in Brazil?
Rodrigo Dall’Acqua .............................................................................. 117
What rights do defendants have in antitrust investigations in Brazil?
Mariana Villela, Rodrigo Santos and Vinícius Cardoso........................ 121
How the governments may interfere to promote the unfair competition
among companies through tax incentives and special tax regimes?
Fábio Nieves Barreira, Henrique Santos Raupp and Thiago Marini .... 128
What is the statute of limitations for anticompetitive conducts investigations
by Cade?
Paulo Leonardo Casagrande, Ana Paula Paschoalini and Caroline Guyt
França ..................................................................................................... 136
Is “compliance credit” available to companies found liable for
anticompetitive behavior in Brazil?
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Felipe Cardoso Pereira, Francisco Ribeiro Todorov and Lorena Leite
Nisiyama ................................................................................................. 143
Which difficulties (if any) does Cade face to carry out expert opinions and
on-site inspections?
Mauro Grinberg and Barbara Luvizotto .............................................. 150
What is Cade’s case law in big data cases?
Joyce Midori Honda and Marília Cruz Avila ........................................ 158
What is Cade’s position on gun jumping?
Isabela Maiolino .................................................................................... 164
Can unlawful tax practices affect competition?
Gustavo Madi Rezende and Paulo Adania Lopes ................................. 171
Antitrust investigations and competition compliance programs: how do they
interplay?
Guilherme Teno Castilho Misale, Julia Raquel Haddad, Leda Batista da
Silva Diôgo de Lima and Luis Claudio Nagalli Guedes de Camargo ... 178
Per se or rule of reason: how does CADE review conduct cases in Brazil?
Fabricio A. Cardim de Almeida ............................................................ 185
What is Cade’s experience with consultation/query procedures related to
anticompetitive practices?
Enrico Spini Romanielo, Vinicius da Silva Ribeiro and Yasmine Nemer
Hajar ....................................................................................................... 195
What has already been done by the Brazilian competition authorities in terms
of competition assessment to avoid anticompetitive conducts?
Elvino de Carvalho Mendonça and Rachel Pinheiro de Andrade
Mendonça ............................................................................................... 203
Is parallel importation a violation of the Brazilian antitrust law?
Ana Cristina von Gusseck Kleindienst .................................................. 210
What are the lessons from the ANFAPE case?
Eduardo Ribeiro Augusto ...................................................................... 217
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How does the relation between antitrust and intellectual property work in
Brazil?
Ana Frazão and Angelo Gamba Prata de Carvalho ............................... 223
What are the requirements for signing the settlement agreement (TCC)?
Ana Luise Solon Sabatier and Ricardo Leal de Moraes ........................ 230
What are the criminal and civil consequences of executing leniency and
settlement agreements with Cade?
Bruno Almeida Silva, Ricardo Lara Gaillard and Thales de Melo e
Lemos ..................................................................................................... 235
To what extent can resolution cade n. 21/2018 influence the negotiation of
leniency and settlement agreements at Cade?
Eduardo Molan Gaban, Fernanda Dalla Valle Martino, Fernanda Duarte
Calmon Carvalho and Natali de Vicente Santos ................................... 243
Leniency policy and practice: what are the grey zones?
Jackson de Freitas Ferreira, Marcelo Calliari, Rodrigo Almeida Edington
and Tatiana Lins Cruz ............................................................................ 249
Leniency plus: what are the key topics?
Eduardo Caminati Anders, Jessica Olivieri, Marcio C. S. Bueno and
Roberto Potter ........................................................................................ 256
What are the leniency application requirements?
Ricardo Inglez de Souza ........................................................................ 264
What are the criteria for calculating fines in cartel cases?
Caio Machado Filho, Marina Antunes Maciel Sertã and Pedro Paulo
Salles Cristofaro ..................................................................................... 269
Does the exchange of sensitive information amount to an antitrust
infringement?
Michelle Marques Machado and Stephanie Scandiuzzi ........................ 276
Are no-poaching agreements among employers an antitrust violation in
Brazil?
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Carolina Destailleur G. B. Bueno, José Rubens Battazza Iasbech,
Leonardo Peres da Rocha Silva and Marcos Pajolla Garrido ................. 283
What are the criminal effects of the leniency agreement settled with the
Brazilian antitrust authority?
Gabriel Ursi, Rodrigo Mudrovitsch and Sofia Campelo ....................... 291
How does Cade deal with sharing of evidence with other authorities?
Adriana Giannini and Lígia Melo Renata Arcoverde ............................ 299
Does the Brazilian antitrust authority investigate conducts carried abroad?
Fernanda Nemer, Gabriela Monteiro and Leonardo Duarte Thaiane Abreu
................................................................................................................ 306
What are the criteria for the characterization of hub-and-spoke conspiracies
in Brazil?
Daniel Douek, Felipe Pelussi and Ricardo Pastore .............................. 313
Collaboration agreements among competitors: when can they raise antitrust
concern?
Fabiana Nitta, Graziella Angela Tinari Dell’Osa and Sonia Marques
Döbler ..................................................................................................... 321
Cade’s statute of limitation for conducting cartel investigations against
companies in brazil: 5 or 12 years period?
Tiago Cortez, Marcelo Laplane, Danilo Orenga and Maria Wagner ... 328
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WHAT RIGHTS DO DEFENDANTS HAVE IN ANTITRUST
INVESTIGATIONS IN BRAZIL?
Mariana Villela
Rodrigo Santos
Vinícius Cardoso
1. Introduction
The Administrative Council for Economic Defense (CADE) is
an adjudicatory administrative entity with jurisdiction to investigate,
prosecute and judge anticompetitive conducts. While CADE’s Tribunal is
responsible for deciding the cases, CADE’s General-Superintendence
(GS) concentrates all tasks related to investigation and prosecution of
anticompetitive conduct.
As these two tasks are carried out by two bodies within the
same agency and as the line between them may sometimes be blurred, the
Brazilian Antitrust Law provides for three types of administrative
procedures that the GS may use to investigate possible anticompetitive
conduct, with different levels of investigative and prosecution powers
and different levels of rights granted to the investigated parties
Considering this peculiarity of the Brazilian Antitrust System,
the following section provides an overview of the rights of defendants in
each of the three types of administrative procedures provided by the
Brazilian Antitrust Law: (i) the preparatory proceeding; (ii) the
administrative inquiry; and (iii) administrative proceeding.
2. Types of administrative procedures and rights of defendants1
2.1 Preparatory proceeding
1 As discussed in several articles in this book, defendants have the right to
submit settlement agreement proposals to CADE even at late stages of the
investigations. Given that this topic is the object of other chapters in the book,
we will not describe these procedures in this chapter.
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The GS may initiate a preparatory proceeding (procedimento
preparatório) to verify if a certain conduct falls under the jurisdiction of
the Brazilian Antitrust authorities and if it may qualify as a violation to
the economic order (i.e., a violation to the Brazilian Antitrust Law). The
GS must conclude this phase of the investigation in up to 30 days2.
Preparatory proceedings are confidential, unless the GS orders
otherwise3; therefore, during this phase, defendants do not have the right
to know that they are being investigated. However, if a defendant finds
out about the proceeding, it will have the right to request access to the
records to the GS4, even though the defendant may not necessarily have
access to the case files.
Depending on its conclusions at the end of the preliminary
proceeding, the GS may decide to close the investigation – if it finds that
the conduct is not subject to the jurisdiction of the Brazilian Antitrust
authorities-, may initiate an administrative inquiry or, if it has sufficient
evidence that an antitrust violation took place, may initiate an
administrative proceeding.
2.2 Administrative inquiry
The administrative inquiry (inquérito administrativo) is a
preliminary investigatory procedure of inquisitorial nature initiated by the
GS to investigate possible violations of the economic order when the
evidence already gathered by the GS is not enough to initiate an in-depth
investigation (which would take place in an administrative proceeding).
According to Article 66, Paragraph 9, of the Brazilian Antitrust
Law, the administrative inquiry must be concluded within 180 days, but
may be extended for 60 more days when the analyzed conducts are
complex or when justified by the circumstances of the case. Although the
2 Article 66, paragraph 3, of the Brazilian Antitrust Law.
3 Article 179, Paragraph 1 of CADE’s Internal Regulation.
4 Article 5, XXXIV (b) and LV of the Brazilian Federal Constitution.
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Law provides for a total duration of 240 days for the administrative
inquiry, the GS usually extends the investigation for several 60-day
periods, at times making the administrative inquiry last several years,
which may be legally questioned.
As a rule, administrative inquiries are non-confidential, but the
GS may order otherwise5; for this reason, defendants do not have the
right to know that they are being investigated. It is usual, during the
administrative inquiry, for the GS to request information to the parties
under investigation; in these cases, defendants will be able to submit
written statements to the GS, and even request meetings with case
handlers. Defendants may also request access to the case files when the
investigation is confidential, in which case the GS may decide whether or
not to grant access. Should the GS reject the access of defendants to the
case files, they may resort to lawsuits before Courts of Law.
The dawn raids carried out by the GS (with the assistance of the
Federal Police and the Federal Prosecution Office) to gather evidence
usually take place during the administrative inquiry proceedings. Since
dawn raids need to be authorized by the courts, CADE will assume that
they are legitimate and legal and, thus, a defendant will not be able to
challenge the raid directly at CADE; however, defendants may challenge
the raids at Courts of Law.
2.3 Administrative proceeding
The administrative proceeding is an in-depth investigation that
may be initiated by the GS from the outset, if it concludes that there is
sufficient evidence of an antitrust violation, or after the conclusion of an
administrative inquiry which indicates sufficient indication of the
existence of a violation.
The Brazilian Antitrust Law provides that the administrative
proceeding is an adversary proceeding, which aims to guarantee full
5 Article 181, Paragraph 1 of CADE’s Internal Regulation.
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rights of defense to the defendants6. This is the phase of antitrust
investigations where defendants have the opportunity of exercising a
broader range of their procedural and substantive defense rights.
To advance with an administrative proceeding, the GS must
formally notify all defendants regarding the initiation of the proceeding7.
The deadline to submit defenses usually starts when all defendants are
properly served of process. Defendants who have been served of process
may access the case files, review documents, and make submissions
and/or meet with CADE officials to discuss the case.
The notice sent by the GS to serve the defendants of process
must contain the entire contents of the decision that determined the
initiation of the administrative proceeding8, if it does not, it may be
declared null and void9, demanding that the GS issue a new notification
to properly serve the defendants of process.
Defendants have the right to submit a written defense to CADE
within thirty days after CADE concludes notifying all defendants10. In
investigations involving more than one defendant and in which the
defendants have different attorneys, this deadline is counted in double11.
Additionally, all defendants may request an extension of ten days to the
deadline12, which the GS must grant, allowing up to forty days (or
seventy days, in case of multiple defendants with different attorneys) to
submit their defenses to CADE, counted from the date in which the GS
confirms that the last defendant has been served of process.
6 Idem.
7 Article 70 of the Brazilian Antitrust Law.
8 Article 70, paragraph 1, of the Brazilian Antitrust Law.
9 Article 26, paragraph 5, of Law N. 9,784/1999.
10 Article 70 of the Brazilian Antitrust Law.
11 Article 102, item IV, of CADE’s Internal Regulation.
12 Article 70, paragraph 5, of the Brazilian Antitrust Law.
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In the written defense, defendants may raise all legal
(procedural and substantive), factual and economic arguments they see
fit. They may also submit legal or economic opinions, documents that
help clarify the facts and appoint up to three witnesses. If the GS accepts
the request for the hearing of witnesses, the GS must previously
designate a date and time for the hearings, and all defendants will have
the right to attend them and address questions to the witnesses.
If a defendant fails to submit its defense within the deadline, the
defendant will be considered at default13. If the defendant remains at
default throughout the investigation and does not submit any defense to
CADE, all facts imputed against the defendant will be considered true.
However, the defendant may submit written motions to CADE at any
point during the investigation14, which CADE will take into consideration
in respect to the principle of the real truth (princípio da verdade real) and
to the principle of full right of defense (princípio da ampla defesa).
Once the SG concludes its analysis in the administrative
proceeding, it will issue its opinion on the merits and on the procedural
matters of the case, and send its recommendation to CADE’s Tribunal,
where the investigation will be randomly distributed to a reporting
Commissioner. At the Tribunal phase of the investigation, defendants
will have the right to submit written statements at any time and will be
granted a specific moment – before the judgement of the case – to submit
their closing arguments. Defendants also have the right to meet with all
Commissioners to discuss the case, and defendants may request to
present oral closing arguments to the Tribunal during the judgement
session, before the judgement of the case.
Defendants may not appeal against the Tribunal’s decision at
the Federal Administration level15; but they may submit motions for
13 Article 71 of the Brazilian Antitrust Law.
14 Article 71, sole paragraph, of the Brazilian Antitrust Law.
15 Article 9, paragraph 2, of the Brazilian Antitrust Law.
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clarification related to any obscurity, omissions or contradictions in the
decision16. In these situations, defendants will have five days to submit
their motions after the decision is published, and the deadline will be
counted in double if they have different attorneys in the case.
Although the Brazilian Antitrust Law does not provide for any
appeals, CADE’s Internal Regulation states that defendants may request
the reappreciation of the case in up to fifteen days following the
publication of the decision if there are new facts or documents that are
capable of altering the decision.17 These requests, however, are rarely
granted.
As set out by the Brazilian Constitution, defendants in antitrust
investigations – and in investigations of any nature – may always resort
to lawsuits in Courts of Law if they believe any of their rights have been
violated and may also challenge CADE’s decisions before Courts of
Law.18 This possibility is available to defendants during all phases of
antitrust investigations.
3. Conclusion
The Brazilian legal system generally awards defendants wide
defense rights related to administrative or criminal investigations, and
this is also the case in antitrust investigations. In fact, the Brazilian
Constitution states that defendants are entitled to wide defense, due
process and adversary rights and must have access to all means necessary
to exercise them.19
16 Article 259 of CADE’s Internal Regulation.
17 Article 263 of CADE’s Internal Regulation.
18 Article 5, item XXXV, of the Brazilian Constitution.
19 See, in this regard, article 5, item LV, of the Brazilian Constitution, and article
115 of the Brazilian Antitrust Law.
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Based on this provision, the Brazilian Antitrust Law and
CADE’s Internal Regulation provide for wide access to case files,
accusation documents, case handlers, and CADE’s practice has
established the formidable tradition of accepting all written statements
from defendants before a final decision is rendered, regardless of the
phase of the investigation in which they are presented.
In any case, if defendants understand that their rights have been
violated during an antitrust investigation, they have the right to challenge
the harmful act in a Court of Law, whose decision will prevail over any
act issued by CADE.