Cascione’s Antitrust team was recognized and ranked by the Legal 500, one of the most distinguished publications of the legal market, as one of the best law firms in Competition and Antitrust in Brazil. The publication highlighted the team for their “proactiveness”, as well as for their “excellent legal knowledge”, in addition to emphasizing the work of the partner Denise Junqueira as “extremely experient, assertive, detail oriented and ethical”.
Additionally, the partner Denise Junqueira was also recognized as a Next Generation Partner, while the associate Maíra Isabel Saldanha Rodrigues was ranked as a Rising Star, nominations given to individuals who stand out in the antitrust practice.
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During a ruling session in early October 2022, the Tribunal of the Administrative Council for Economic Defense (“CADE”) reaffirmed its understanding that transactions involving the acquisition of assets that are essential to the buyers’ economic activity trigger mandatory pre-merger notification.
The decision came under an analysis of an alleged gun-jumping practice by car dealers that had failed to notify a deal involving the transfer of tangible assets and resale concessions, which were considered by CADE’s Tribunal as “essential” assets to the activities of a car dealer. The defendants agreed to pay a BRL 2.5 million pecuniary contribution to settle the investigation.
The gun-jumping investigation started in 2019 after information on the deal was shared with the authority in response to a Request for Information sent by CADE’s investigation unit to car dealers in a different probe.
Over the last months, CADE’s Tribunal has judged appeals from Ambev and Heineken in an administrative inquiry that investigates a potential antitrust violation in the markets of beer production and distribution. The inquiry began with Heineken’s claims of alleged abuse of dominant position from Ambev via exclusivity agreements with cold beer sales points for immediate consumption.
CADE’s Tribunal majority concluded that the conduct results in potential anticompetitive effects and thus decided to grant provisional remedies to address at once the alleged abuse of dominance. Until the end of the investigation, Ambev is prohibited to celebrate or renew any exclusivity agreements in regions in which it holds a market share above 20%. As regards other regions in which Ambev could potentially hold a market share equal or above 20%, the authority applied the same prohibition until the end of 2022, in order to allow CADE’s General Superintendency (“SG”) to conduct a deeper analysis on the economic power held by the company and related antitrust risks resulting from exclusivity practices. According to the conclusions to be found by the SG, CADE may authorize new contracts as from January 2023.
In an unusual policy move, CADE also applied the antitrust measures against the claimant, Heineken, but only where its market shares are higher than 20%.
In November 2022, the Brazilian Federal Senate approved and enacted the Law nº 14.470/2022, which regulates the Brazilian system of private prosecution in antitrust matters. In addition to procedural innovations, topics regarding statute of limitations and double damages were also addressed by the new legislation.
On statute of limitations, the law sets a five-year limitation period that starts when CADE issues a final decision on the related administrative proceeding. Additionally, the law establishes the right to double compensation for damages suffered by a third party due to antitrust violations. However, in order to preserve the attractiveness of cooperation agreements with the antitrust authority, companies and individuals who have signed Leniency or Cease and Desist Agreements are exempted from the new double damages rule, and thus their civil liability is limited to the damaged caused.
Following the best global rules on private antitrust enforcement, the Law nº 14.470/2022 aims to find balance between public and private enforcement by encouraging private damage claims by cartel victims while preserving the attractiveness of the collaboration programs.
By unanimity, CADE conditionally cleared the formation of a joint venture (“JV”) between 11 companies from the automotive industry. The authority decided to unilaterally impose restrictions to the transaction, conditioning its approval to the adherence of the companies to the imposed remedies.
The merging parties claim that the JV’s purpose is to create a cloud-based network structure for cooperation and exchange of information between companies active in different chains of the automotive industry, to allow data processing and development of software, APPs, and other digital products.
Initially, the transaction was unconditionally cleared by the SG but was brought to CADE’s Tribunal analysis after being called up by Commissioner Gustavo Augusto, who was also the Reporting Commissioner of the case. In his analysis, the JV could increase competition risks related to coordinated effects and exchange of competitively sensitive information, despite the potential resulting efficiencies.
To address these concerns, CADE’s Tribunal imposed remedies, including: (i) monitoring the software users information exchange; (ii) appointing an antitrust expert responsible for developing an effective antitrust compliance; and (iii) developing and adopting a software designed to identify possible violations to competition.
In the last quarter of 2022, the Administration Executive Committee of the Brazilian External Trade Chamber (“GECEX”) extended antidumping duties applied to the following products and origins:
The Secretariat of Foreign Trade (“SECEX”) also initiated a sunset review proceeding on antidumping duties applied to citric acid and citric acid salts (NCM 2918.14.00 and 2918.15.0) from China.
In Aug. 2022, GECEX determined the application of antidumping duties to the imports of textured filament yarn of polyester (commonly classified under the NCM codes 5402.33.10, 5402.33.20, and 5402.33.90) from China and India.
However, the antidumping duties were immediately suspended due to public interest issues. The duties vary from 57,85 and 585,70 US$/t for Chinese producers, and 105,67 and 558,57 US$/t for Indian producers.
The United States International Trade Commission (“USITC”) revoked the antidumping and countervailing duty orders on imports of hot-rolled steel products from Brazil, in place since 2017.
Under a sunset review process, the USITC concluded that revoking the existing antidumping and countervailing duty orders on Brazilian imports would not likely lead to continuation or recurrence of material injury within a reasonably foreseeable time. As a result of the Commission’s negative determinations, the existing orders on imports of these products from Brazil will be ended.
An opposite conclusion was reached by the USITC as regards the imports of hot-rolled steel products from Japan, the Netherlands, Russia, South Korea, Turkey, and United Kingdom. The existing orders on imports of these products from such origins will remain in place for at least five more years.
Denise Junqueira
djunqueira@cascione.com.br