May 29, 2013 will be remarked as the first anniversary of Law 12.529/11, which is the new Antitrust Law. However, prior to a brief discussion on the achievements and challenges of the new legislation, it is worth acknowledging that albeit all the skepticism about its implementation, this first year had a quite positive balance.  

Initially, due mention must be made to the Multi-year Plan (PPA), which is intended to improve the Brazilian Antitrust System (SBDC) and the restructuring of the Brazilian Antitrust Agency (CADE). The objectives of the program include the establishment of partnerships with other governmental agencies and international entities and the improvement of the antitrust agency's investigation procedures. The established agenda includes the implementation of laboratories for analysis and investigation of cartels in all regions of the country, a 50% reduction in the inventory of investigations on the fuel and health sectors, review of the instruction procedures to reduce processing time and review of leniency and compliance programs.  

The analysis of CADE's new operational structure shows that its subdivision in Administrative Court, General Superintendence and Economic Studies Department made the authorities' work more efficient and faster, to the extent that duplicate analysis are no longer performed. CADE is also sorting submitted cases more efficiently, assigning them according to the nature of the procedure and sector involved, which created a certain degree of expertise in the several subjects comprised by the System.  

As to the activities by the Economic Monitoring Office (SEAE), with its residual duty to defend competition, there is a perception that little has been done to this effect, perhaps because of the lack of more capable tools to this purpose. Consequently, further planning, activities and discussions with the most diverse agencies and institutions are expected from SEAE, not only to alert to the side effects of new regulatory or executive acts, but also to defend the required adjustments. A good start would be for SEAE to have a permanent and institutional contact with the House of Representatives, specifically the Economic Monitoring, and Constitution, Justice and Citizenship Commissions, to review and assist in the discussion of federal legislative acts. Likewise, SEAE's further contacts with the various regulatory agencies, which invariably must address free competition issues in theirex ante activities, would be welcome. 

In what is envisaged as the deepest change by the new law - the introduction of a pre-merger control system - where the General Superintendence started to play an essential role and became the party in charge of instructing as well as deciding on reported transactions of lesser complexity, due acknowledgment is made to the agency's good performance and efforts, which contributed to more efficient and faster analysis, consequently reducing the inventory of cases at CADE.  

With more complex work required from companies and their attorneys, which must provide information in quantities and with a thoroughness not comparable to the previous system, the authorities have been able to complete their analysis of the competition effects from the transactions within quite reasonable periods.  

An assessment by CADE in late 2012 showed that the average time to analyze transactions was reduced from 154 to 19 days in summary cases and 48 days in more complex cases, which are judged by the CADE court. An assessment is yet to be made on cases which, under the new law, may call for complex negotiation of remedies in the context of a conditional approval. This shall probably happen in two recent proposed structural remedies by the General Superintendence and a recent complex merger in submission stage.  

It should be further noted that concurrently with the task force in the SBDC to reduce the accumulated inventory of merger cases, the number of cases notified under the new law dropped significantly. The reason for such drop lays on the significant increase of thresholds requiring mandatory submission, as well as the revocation of the relevant market share threshold criteria - higher than 20%.  

During the period from May, 2011, to May, 2012, hence prior to effectiveness of the new antitrust law, 838 mergers were judged. However, with the changes in the criteria for notification of the transactions, from June, 2012 to March, 2013, 400 mergers were judged, most of them when the former law was still in effect.  

On the one side, there is a perception that less cases without competition value are submitted to SBDC, which was able to adjust its duties to its resources more appropriately and focus on cases of effectively damaging potential. On the other side, there is also an increased perception that an effective antitrust immunity is being acknowledged to certain economic sectors.  

To this effect, a constant monitoring is required not only by CADE, but also by economic players in general, to identify those transactions which, although not meeting the threshold criteria, may pose risks of restraint to free competition, thus requiring a proper analysis of such transactions by the authorities, as enabled by the new law.  

Therefore, concurrently with the relative clean up in the inventory of long-standing mergers, less notifications on transactions and more attention being paid by CADE to more relevant cases, the investigations on conducts have showed the efforts to settle investigations in progress for several years in the System, many of which not showing strong indications of competition violations.  

Contrary to the expectations, there has not been any significant celerity in the commencement of new investigations. However, it seems that governmental authorities finally are trying to focus more on the domestic market and identified illegal conducts, in view of their higher potential to jeopardize free competition in the Brazilian territory, as well as investigations on collusions in government bids.  

To this effect, it is worth to mention that historically, the typical national cartels were not the focus of the Brazilian antitrust authorities. There was a different policy, focused on the internationalization of CADE's activities through investigations on international cartels. And there is little doubt that this policy has indeed succeeded, to the extent that Brazil definitely moved into the radar of multijurisdictional leniency applications.  

In turn, abusive of dominance investigations, which call for a more intense and complex work by the authorities, have been put aside for some time. The abusive contractual clauses by Unimed [medical] plans has historically represented a substantial portion of this type of conduct under investigation by the authorities. In March, 2013, for instance, the CADE's Tribunal decided 93 cases involving medical cooperatives in one single session, while other conducts involving, for instance, resale price maintenances, represented much more modest numbers.  

Some opinions expressed on recent judgments, however, brought concerns to the business community. An example of this concern was the legal construction by CADE to define certain conducts. In the case of resale and suggested prices by unions or associations, the antitrust authorities introduced a novel precedent by making a division between conducts which have as its object the restraint to free competition and those which even though devoid of such object, may have the potential to result in a restraint. The practical result of this construction reduces the authorities' work on these types of violation, as they are presumed unlawful and the related effects would not require proof, whereas the burden of proof is reversed to the detriment of the companies.  

In view of such standpoint, higher trends of law-oriented decisions by CADE are expected. If on the one side the antitrust authorities are evidently concerned with the evolution and construction of the Brazilian legislation, on the other side there are constitutional and procedural principles which must be taken into account in any type of decision, whether administrative or judicial. Likewise, a higher growth in suits for damages for violation of competition laws, especially by cartels, is expected. Following the example of several countries, including the USA and the European Union, it is incumbent upon the Judiciary to refine the decisions by the SBDC.  

As expected, the introduction of the new system raised several issues and CADE has been facing an intense work to regulate them. To this effect, the Internal Regulation, approved on May 29, 2012, performed the role of providing clarifications and more predictability to part of such several issues. Other Resolutions enacted by CADE also did the same.  

However, while CADE works under its new guide for analysis of horizontal overlaps and vertical restrictions, the Council still has to handle highly controversial definitions, such as the clarification on several issues involving investment funds transactions, as well as issues on definition of concepts concerning association contracts. New resolutions in this regard are expected.

A recent change made by CADE also addresses changes in its policy for negotiation of consent decrees - the so-called TCCs. To many, the compulsory requisites of cooperation, contribution and guilty admission, to enable any type of settlement with the authorities in cartel cases, tends to reduce incentives to negotiation. The criminal and civil exposure in suits for damages will have an even more significant role in the decision by the companies. Therefore, by raising the burden on TCC negotiations, the resolution in fact confirms the importance given to the leniency program. On the other hand, the change brought a higher predictability in the reduction of penalties resulting from such settlements.  

In short, even if elements deserving higher care from the antitrust authorities may be identified, an assessment of the first year of Law 12.529/11 is quite positive. The fear of the new, inherent to the traditionalist Brazilian society, gives room to a relationship with higher respect and dialogue between the government and companies. The introduced mechanisms are working, however, some inevitable adjustments are pending. It is only expected that such adjustments take place throughout the second anniversary of the law.