After taking office as the Administrative Council for Economic Defence's (CADE's) president, Alexandre Cordeiro has made several statements that sustain an orthodox perspective of competition and distance the authority from the most recent North American and European movements aiming to expand competition policy. In reference to digital markets, he indicated that CADE will avoid rash action (which can neutralise incentives for innovation) and denied any intention of adopting a structural approach to enforcing competition law in Big Tech.
In August 2021, CADE and the Brazilian Institute for the Study of Competition and Consumer Relations (IBRAC) held a seminar on competition in digital markets(1) with the participation of Cordeiro and Guilherme Resende, CADE's chief economist. In agreement with the president, Resende also pointed out the risks of incisive action on digital platforms, highlighting negative effects on consumers and innovation, and creating an uncertain environment for competition policy. During the event, CADE launched a study on digital markets,(2) compiled from its own case law.
It will be important to observe how such statements from CADE's high-ranking officials will affect future developments in case law. Some of CADE's recent antitrust enforcement practices seem to diverge from the more orthodox, Chicago-oriented approach that Cordeiro and Resende have advocated. For example, over the last two years, CADE has imposed around ten interim measures during its investigations, which many academics consider a more interventionist approach. In one such case,(3) CADE forbade Globo Group, a major Brazilian media conglomerate, from applying premiums to the payments of advertising companies – even though the companies involved stated that this payment model had pro-competitive effects. Moreover, CADE has shown a growing interest in investigating and convicting companies for unilateral conduct, in contrast with the scope of antitrust orthodoxy to focus enforcement on naked collusive agreements.
It is equally worth paying attention to developments in merger review. Since 2020, CADE has directed its attention to potentially major acquisitions in Brazil. In accordance with an investigation carried out by the Federal Trade Commission in the United States, CADE sent letters(4) to several digital platforms inquiring about past acquisitions over the last ten years. CADE has still not issued any decision or action on the matter, but its leadership have emphasised that their priority is to better understand the tech market.(5)
It remains to be seen how CADE will strike a balance between its wish to better understand and potentially intervene in digital markets, and its preference for a more cautious approach to competition policy. This balance will naturally affect other sectors and CADE's future work, such as its analysis of the acquisition of telecommunications company Oi by three competitors, which could indicate how the authority will position itself in the coming years.
For further information on this topic please contact Marcela Mattiuzzo or Arthur Sadami at VMCA by telephone (+55 11 3939 0708) or email ([email protected] or [email protected]). The VMCA website can be accessed at http://www.vmca.adv.br.
(1) The seminar is available to view here (in Portuguese).
(2) Further information is available here (in Portuguese).
(3) Further information is available here (in Portuguese).
(4) Further information is available here (in Portuguese).
(5) Further information is available here (from 01:11:15).