« Voltar « Back

Brazil's competition authority votes to keep turnover-based cartel fines

Por: Latin LawyerImprimirVisualizar em PDF

The president of Brazil's competition enforcer and a new commissioner have backed maintaining the current system of calculating fines based on cartelists' turnover, rather than the harm caused.

Administrative Council for Economic Defence (CADE) president Alexandre Barreto and commissioner Maurício Maia, who joined the agency in June, voiced their opinions on the matter for the first time when issuing 11.9 million reais (US$3.7 million) in fines to a building maintenance cartel at a CADE tribunal plenary session held on 16 August.

Maia told Latin Lawyer's sister publication GCR that the traditional system has been part of Brazilian legislation since 1994 and the method of percentage of sales has been used by several international jurisdictions.

Maia said the issue was up for discussion earlier this week as there is a minority position within the seven-member tribunal that believes fines should be identical to the "advantage obtained" from a cartel. Maia said Brazilian competition law sets out the criteria for applying penalties, and although advantage obtained is listed, it should not "overlap" the other factors.

A CADE spokesperson said president Barreto said that gross sales should be the basis for penalties, and that advantage obtained should only be used as a reference when estimating it is possible. However, Barreto said there is no way of calculating it with certainty.

The enforcer must also consider the seriousness of violations, defendants' cooperation and their economic status. The current law allows Brazil to fine companies between 0.1% and 20% of its turnover for the year prior to the commencement of administrative proceedings.

In a statement, commissioner and former CADE acting president Gilvandro Araújo said fine calculations must be viewed in the context of Brazilian competition policy, which includes other enforcement measures. He said the CADE decision may be submitted for judicial review, and judges can question if there is a good enough reason to change a methodology that has been used for several years.

Until 16 August, it was unclear whether the two new commissioners would support a new approach to fine calculations.

Commissioners Araújo, Alexandre Macedo and Paulo Burnier all support the traditional method of calculating fines. However, commissioners Cristiane Alkmin and João Paulo Resende have pressured other members to instead base calculations on the harm caused by cartels.

Leonardo Peres da Rocha e Silva, a partner at Pinheiro Neto Advogados, said there are very few cases where there is the necessary information to calculate harm or advantages gained in cartels. "All the commercial agreements would need to be looked at and all the sales figures would have to be considered," he said.

Silva said trying to calculate the advantage gained would allow more challenges by companies, and could lead to judges having to review fines.

He added that companies involved in investigations should "definitely" monitor future decisions to see how the commissioners behave in other cases.

Daniel Oliveira Andreoli, a partner at TozziniFreire Advogados, said the two commissioners "did their homework" and analysed previous cases. He added it is only the third plenary session during President Barreto's tenure, and only the second since Maia came to office.

The two tribunal members also indicated they wish to advance preparations on fining guidelines, Andreoli said.

Faça parte do nosso mailing Join our mailing Receba em primeira mão publicações
e comunicados do escritório
Get firsthand publications
and communications office

São PauloRua Hungria, 1100
São Paulo – SP
t. +55 (11) 3247-8400ver mapasee map

Rio de JaneiroRua Humaitá, 275 - 16º andar
Rio de Janeiro – RJ
t. +55 (21) 2506-1600ver mapasee map

BrasíliaSAFS, Qd. 2, Bloco B
Ed. Via Office - 3º andar
Brasília – DF
t. +55 (61) 3312-9400ver mapasee map

Palo Alto228 Hamilton Avenue,
3rd floor
CA 94301 | USAver mapasee map

Tóquio1-6-2 Marunouchi,
Chiyoda-ku, 21st floor
Tokyo | Japan
t. +81 (3) 3216 7191ver mapasee map

Termos de Uso
Política de Privacidade