The protection of competition is crucial given that the Internet has introduced new ways for companies to conduct their business. For example, companies must ensure that their website content complies with antitrust regulations. The task of overseeing such matters rests with the Brazilian antitrust authorities.
The location in which a potentially anti-competitive act is carried out continues to be relevant. For the purposes of the Brazilian Law on the Prevention and Repression of Violations against Economic Order (Law 8,884 of November 6 1994), certain acts will be regarded as being carried out in Brazil and, therefore, subject to Brazilian antitrust legislation.
Another important issue is the scope of enforcement, which is particularly relevant to electronic business-to-business (b2b) ventures. Law 8,884/94 establishes that certain activities will be considered to be anti-competitive regardless of the manner in which they are manifested if their objective is or may be:
- to limit, distort or in any way impair free competition or free enterprise;
- to dominate a goods or services market;
- to increase profits arbitrarily; or
- to exercise a dominating position in an abusive manner.
Such effects do not constitute an unlawful act per se, but must be combined with anti-competitive conduct (eg, an agreement between competitors to fix sales prices or conditions of goods, or the obstruction of the operation or development of a rival company or vendor).
Thus, internet b2b ventures are caught under the "regardless of the manifestation" provision and continue to be subjected to analysis by the Brazilian antitrust authorities.
It is believed that the first case of 'virtual competition' will be heard soon, following the creation of a portal by six large companies from the civil construction sector.
It appears that the legislators are content to address anti-competitive activities that arise from internet transactions through the application of existing legislation. Thus, the creation of a specific law governing virtual competition is not likely in the near future, since the application of Law 8,884/94 cannot be contested.
In recent decisions the Brazilian antitrust authorities have clearly indicated that they have competence to:
- authorize the creation of companies' electronic portals;
- decide codes of conduct for and impose restrictions upon the companies that create them; and
- monitor online transactions.
For example, the Antitrust Agency recently approved a concentration involving beverage and tobacco companies that wished to sell services unrelated to their core activities through a website.
For further information on this topic please contact Ricardo Barretto or Sueli de Freitas Veríssimo Vieira at Barretto Ferreira, Kujawski, Brancher e Gonçalves – Sociedade de Advogados by telephone (+55 11 3066 5999) or by fax (+55 11 3167 4735) or by email ([email protected] or [email protected]).