Brazil: Administrative Council for Economic Defence
2013 was an important year in terms of the impact of the change in the Brazilian competition legislation. CADE was boosted by an important management reform within the Authority in 2012–2013, which represented a new era of antitrust enforcement in Brazil, and it has placed CADE among the top competition agencies worldwide. In 2013, CADE aimed to improve in a multiple of ways and to continue to foster a stronger competition enforcement policy.
The new pre-merger review was implemented in a fast and effective manner. The creation of a merger screening unit responsible for the triage of all merger filings and its rapid response to simple cases proved to be an efficient change of the analysis procedure. Of the 377 merger filings CADE received, 337 were approved directly by the General Superintendency, after analysis of the merger screening unit.
As confirmation that the change to a pre-merger review system and to a new structure was positive, the Brazilian Ministry of Planning granted us a prize, within its national public contest hosted by the Brazilian National School of Public Administration, paying tribute to CADE’s new merger review system. Fast-track cases have been reviewed within an average of 25 days, while the overall average (including complex cases) is around 66 days.
In addition, CADE has also focused on reducing its case backlog. While in 2012 merger cases made up 86 per cent of the total cases tried by CADE’s Tribunal, in 2013 these cases represented 69 per cent of total administrative judgments. On 29 May 2012, when the new Competition Law came into force, there were 382 cases in the backlog; by December 2013 there were just 17 – a total reduction of 365 mergers cases.
Notification requirements also became clearer in order to guarantee the quality and accuracy of the presented information. The efficiency gains resulting from the screening unit’s fast analysis has allowed other units and commissioners to focus on cases that have raised more competition concerns, such as challenged mergers and anti-competitive conduct. In May 2013, CADE’s Tribunal signed the first two Merger Control Agreements as a condition for the approval of transactions analysed under the new Competition Law. As the two cases were also being analysed by other jurisdictions abroad, there was a key opportunity to discuss possible remedies in a coordinated manner. The international cooperation derived from these opportunities demonstrated the importance of fomenting dialogue between competition authorities and were an example of success that favours the strengthening of the application of competition rules in situations where competition has an international effect.
The improvement of international cooperation continued to be an important objective for CADE in 2013. The Authority values all opportunities to foster debate with other jurisdictions on challenges faced in competition enforcement. We also seek to promote consensus through the convergence towards common principles in competition law and to implement these principles according to each jurisdiction’s situation.
For the second year in a row, CADE hosted a three-day workshop on competition enforcement and international cooperation, featuring the main aspects of the new Brazilian Competition Law, to representatives of 10 different European Countries. During the event, CADE and European experts had the opportunity to debate the main challenges competition authorities face when it comes to international cooperation. The two editions have proven to be fruitful not only for increasing knowledge, but for deepening the relationship between CADE and participating jurisdictions.
In 2013, changes were enacted to bring enhanced efficiency to the application of the new Brazilian Competition Law. In March, CADE issued its new rules for settlements in cartel investigations (cease-and-desist agreements). The changes aim to improve this type of agreements, considering that they are important tools for obtaining evidence that can be fundamental in investigations of anti-competitive behaviour. As a result, they are also very important for the effective resolution of cases.
With the new policy, the parties need to confess their participation in a collusion in order to be able to sign such agreements. The settlement signature is also conditional on the cooperation of parties in the investigation. There is also the implementation of a band of discounts for pecuniary contributions that vary according to the degree of collaboration and the order of the signature of the agreement. The initial outcomes have been very positive and the new policy is expected to increase the number of settlements and leniency agreements in the coming years, in order to make the policy against cartels even more effective.
Better guidelines for anti-competitive conduct analysis were also introduced. Policies and conducts case management within CADE’s investigation body, the General Superintendency, were based on prioritisation and efficiency criteria, meaning that cases with little evidence and lower chances of condemnation were usually filed and similar cases received joint treatment. This allowed the authority to focus on better cases instead of on a larger number of cases.
Empowered by the new legislation, the General Superintendency also strengthened its leniency programme and signed two agreements, 10 leniency applications in total (markers), 10 second-in requests and one second-in agreement. Additionally, two dawn raids were carried out and 53 cease-and-desist agreements were signed.
CADE has also stepped up its efforts on cartel enforcement. It has perfected its precedents and methods in handling cartel cases. In 2013, there were a total of 22 condemnations concerning conducts in general, of which 13 concerned cartel cases. This was the highest mark ever registered in Brazil. This increase is due to the fact that CADE’s Tribunal has been able to focus on conduct cases (particularly cartel cases) rather than on merger cases.
CADE is in the process of receiving 26 civil servants approved by public exam (concours) held in March 2014 by the authority. Civil servants usually have a longer period at the organisation, and as a result, turnover is expected to be largely reduced, and newcomers shold be better trained. This may also have a positive impact for knowledge management, particularly knowledge retention.
In conclusion, 2013 presented consistent results of the change in legislation and showed that CADE is improving and being recognised as one of the top competition agencies worldwide. We believe that the 2014 edition of GCR Rating Enforcement – which maintained CADE’s four-star grade – is positive and important feedback in the sense that our work is heading in the right direction. We intend to continue this way and to keep improving.