Antitrust: restrictive agreements and dominancei Significant cases
In 2018, CADE's Administrative Tribunal analysed a total of seven cases related to unilateral conducts. Since 2017, the investigation of unilateral anticompetitive behaviour has been one of the priorities of CADE's current General Superintendent.
In March 2018, CADE closed an administrative proceeding involving Volkswagen, Fiat and Ford, which concerned an investigation into auto parts. The case was based on a complaint filed by the National Association of Auto Parts Manufacturers (ANFAPE) in 2007 in which it alleged that these companies were using their IP rights in an abusive manner. The SG argued that enforcing IP rights to prohibit independent manufacturers of automotive parts from selling their own auto parts on the aftermarket would constitute an abuse of the industrial property law. However, following the opinion issued by Commissioner Maurício Bandeira Maia, CADE's Administrative Tribunal decided that there was no evidence of anticompetitive conduct and dismissed the complaint.
In October 2018, CADE's Administrative Tribunal analysed the Terminal Handling Charge 2 (THC2) imposed by port operators to handle containers at the terminal before loading them into the vessel. According to Marimex, the company that requested the preventive measure granted by CADE' Administrative Tribunal's, BTC, in its capacity as port operator, was imposing charges as a condition to release the containers. Commissioner Burnier concluded that BTC was a monopolist in the port terminal in which it was active and abused its dominant position to impose commercial conditions. The Commissioner also concluded that the unlawfulness of this charge is established by CADE's case law for more than 10 years. In August 2018, CADE imposed fines totalling 5.7 million reais on Rodrimar and Rio Grande, operators of the port terminals of Port of Santos and Rio Grande, respectively, due to the same anticompetitive conducts.
Also in October, CADE condemned Unilever to pay 29.4 million reais for preventing competitors from having access to the market of ice cream for immediate consumption in the cities of São Paulo and Rio de Janeiro. At least four exclusivity agreements were identified by the antitrust authority, involving (1) exclusivity of storage freezers; (2) minimal sales; (3) exclusivity of merchandising; and (4) exclusivity of sales. Initial investigations indicated that Nestlé was also involved in the anticompetitive conducts, especially in small shops, such as cafeterias and snack bars, but, for the lack of dominant position, CADE condemned Unilever only.
In 2018, CADE also executed 11 cease-and-desist agreements that totalled 70 million reais, which may be divided into three major groups:
- In March, in order to assure the contractual freedom in the real estate market, CADE executed a cease-and-desist agreement with the Brazilian Federal Council of Real Estate Brokers (COFECI) and with the Regional Councils (CRECIS) to end the imposition of maximum and minimum prices for brokerage commission. The agreement also stipulated a pecuniary contribution of 75,000 reais.
- Also in March 2018, Booking, Decolar and Expedia, all of them online travel agencies (OTAs), committed themselves to stop using their current price-parity clause policy and decided to renounce the conditions imposed on hotels that offer accommodation on their platforms. The administrative inquiry was started by the SG in 2016 after a complaint filed by the Brazilian Forum of Hotel Operators. The anticompetitive conduct aimed at guaranteeing more advantageous prices, room availability and other conditions at the OTAs' websites, in comparison to those offered by the hotel chains in their own sales channels (online and offline) or in competing platforms. CADE concluded that the imposition of broad parity clauses would limit the competition among travel agencies, regulating the final prices offered to consumers.
- From July to September, CADE reached five cease-and-desist agreements with major banks after a lengthy investigation into anticompetitive practices in the electronic payment market. CADE opened this investigation in 2016 to probe, among other things, the banks' exclusivity contracts with commercial establishments and the adoption of other anticompetitive practices that prevented small companies from accessing the market. As a pecuniary contribution, Itaú and Rede agreed to pay 21 million reais to the Fund for the Defence of Diffuse Rights. In addition, Banco do Brasil and Bradesco agreed to pay 1.9 million reais and 2.2 million reais in fines, respectively. Cielo SA, which is controlled by Banco do Brasil and Bradesco and is considered Brazil's largest credit and debit card operator, also payed 29.7 million reais. This was the largest nominal contribution ever collected by CADE in a TCC involving unilateral conduct related to administrative inquiries.
As previously mentioned, since 2017, the current General Superintendent has been stating in public speeches that, after focusing on cartels and mergers for so long, it is now time for CADE to focus more attention on unilateral conducts, which can be very harmful to competition. This statement was reinforced by CADE's President in his 2018 review.iii Outlook
CADE's enforcement priorities were always clearly focused on fighting cartels, meaning that cases involving unilateral conduct represented a lower proportion of CADE's enforcement activities. Since 2017, public speeches by competition authorities have been indicating a possible shift on this policy and more enforcement in this area. Although there was a noticeable change in the level of enforcement against unilateral conducts, CADE still allocates much more resources to fighting cartels. It will be important to track closely how CADE's efforts related to unilateral conducts will unfold in 2019, especially considering the new authorities to be appointed by the new government.