CONDUCTS ENFORCEMENT IN BRAZIL FREQUENTLY ASKED … · Fabiana Tito Fábio Nieves Barreira Fabricio A. Cardim de Almeida Felipe Cardoso Pereira Felipe Pelussi Fernanda Dalla Valle

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

CONDUCTS ENFORCEMENT IN BRAZIL: FREQUENTLY ASKED QUESTION

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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.


9 Article 26, paragraph 5, of Law N. 9,784/1999.


11 Article 102, item IV, of CADE’s Internal Regulation.



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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


14 Article 71, sole paragraph, 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.

Documents

CONDUCTS ENFORCEMENT IN BRAZIL FREQUENTLY ASKED … · Fabiana Tito Fábio Nieves Barreira Fabricio A. Cardim de Almeida Felipe Cardoso Pereira Felipe Pelussi Fernanda Dalla Valle