On October 29, 2014, the Administrative Council of Economic Defense ("CADE") approved a new regulation ("Resolution No. 10") providing guidelines on what types of the so-called "collaborative/association agreements" shall be subject to mandatory pre-merger control filing in Brazil.

According to Resolution No. 10, an agreement shall be considered as "collaborative/associative" in nature and therefore subject to CADE's pre-merger control review, whenever the contracting parties meet the applicable revenues thresholds, if the agreement lasts for more than two years and: 

  1. gives rise to horizontal overlap between the contracting parties or their respective groups, in relation to the subject matter of the agreement, and their combined market share in a relevant market affected by that specific agreement is equal to or in excess of 20%; or  
  2. gives rise to vertical link between the contracting parties or their respective groups, in relation to the subject matter of the agreement, and at least one of them has 30% market share or more in a vertically related relevant market affected by that specific agreement, and provided that: 
    1. the agreement contains a profit/loss sharing clause; or
    2. exclusivity obligations arise from the agreement. 

Agreements lasting less than two years will also be caught by this regulation whenever they meet the criteria discussed above and, upon renewal, the 2-year period is reached or exceeded.   

Resolution No. 10 shall enter into force within 60 days counted as from its publication in the Brazilian Official Gazette. The publication shall occur in the coming days.

The Portuguese version of Resolution No. 10, dated October 29, 2014, is available on CADE?s website at: http://cade.gov.br/Default.aspx?db6fbf49d84ea260aa97a8bd8acc