LEVY & SALOMÃO A D V O G A D O S Competition Law in Latin America: Lessons to Learn The...

LEVY & SALOMÃO A D V O G A D O S

Competition Law in Latin Competition Law in Latin America: Lessons to LearnAmerica: Lessons to Learn

The Brazilian experienceThe Brazilian experience

Ana Paula MartinezAna Paula MartinezJune 15, 2012 – OxfordJune 15, 2012 – Oxford

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Why competition is important?

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Competition and Innovation: Inverted U Relationship

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Lesson No. 1

Competition law can do little for competition in the absence

of a market-oriented framework

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Landmarks of Competition Law & Policy in Brazil

2012

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Lesson No. 2

A mandatory post-merger system is extremely ineffective

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Lesson No. 2

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Lesson No. 3

The agency needs to have adequate investigatory tools

and sanctions should be designed and effectively

applied to deter violations of the law

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Law amended in 2000 to include dawn raid powers and leniency agreement

First leniency agreement executed in 2003. More than 20 agreements executed from 2003-2011

More than 300 search and seizure warrants served

Direct evidence: (i) supports criminal charges; (ii) allows the competition agency to impose substantial fines; (iii) supports the administrative rulings before the Judiciary

Administrative and criminal enforcement ensures deterrence

Ações

Estratégia

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Operação Pacto 274: Economia de R$ 32 milhõesEvolução do preço e do consumo de gasolina

tipo C em João Pessoa

Real Case: Gasoline Retail Market

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Case AmountIndustrial Gases Cartels (2010) US$ 1.3 billion

Abuse of market power (2009) US$ 250 million

Security Services Cartel (2007) US$ 25million

Vitamines Cartel (2007) US$ 10 million

Crushed-Rock Cartel (2005) US$ 45 million

Steel Cartel (2005) US$ 210 million

Flat Steel Cartel (1999) US$ 38 million

IT Services Settlement (2011) US$ 20 million

Compressors Settlement (2009) US$ 60 million

Plastic Bags Settlement (2008) US$ 15 million

Cement Settlement (2007) US$ 25 million

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Multimillionaire fines: is this the right way?

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Lesson No. 4

Cooperation among agencies is crucial to ensure outstanding

results

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Leading Case: Rio Madeira (2007) A major Brazilian construction company entered

into exclusivity agreements with all turbine suppliers with plants in Brazil prohibiting them to deal with other bidders in connection with the Rio Madeira energy bid

The competition agency adopted an interim measure to suspend the effectiveness of the exclusivity contracts; Settlement reached before the bid took place following intense cooperation between enforcers and regulators

Due to competition, the final price for the energy was 35% lower than the cap price

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Leading Case: Rio Madeira

6

Total savings for the 30 years of the concession agreement are estimated

in BRL16.4 billion

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Lesson No. 5

Develop a wider culture of competition

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Lesson No. 5

Develop a wider culture of competition

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What to expect now?

21

?

Vinícius Carvalho Vinícius Carvalho (Presidente)(Presidente)

PROCADEPROCADEGilvandro AraujoGilvandro Araujo

Superintendente-Superintendente-Geral Carlos RagazzoGeral Carlos Ragazzo

Ana FrazãoAna Frazão Ricardo RuizRicardo Ruiz Elvino MendonçaElvino Mendonça Marcos Marcos VeríssimoVeríssimo

Alessandro Alessandro OctavianiOctaviani

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Novo CADE

Eduardo PontualEduardo Pontual

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Greatest challenge: implementation of the pre-merger regime and restructuring of the system

Increased number of complex mergers filed (market consolidation)

Top priority: prosecuting bid-rigging

Next frontier: Private claims

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Ana Paula Martinez

amartinez@levysalomao.com.br

+55 11 3555 5059