Cartel Cases Under Non-U.S. Competition Laws

• Pages: 273-409

273

CARTEL CASES UNDER

NON-U.S. COMPETITION LAWS

A. Brazil

1.

Competition law

a. Overview

There are several laws and regulations that address anticompetitive

practices in Brazil. The main law is the Brazilian Antitrust Law,1 which

deals with antitrust violations at the administrative level in Brazil. Other

laws are the Brazilian Economic Crimes Law, 2 the Brazilian Public

Bidding Law,3 and the Brazilian Clean Company Law.4

Article 36 of the Brazilian Antitrust Law provides that any conduct

that has the potential to restrain, distort or in any way harm competition

shall constitute an antitrust violation, even if any such effects are not

achieved and regardless of the subjective intention of the wrongdoer.

Listed among the conduct that may constitute antitrust violations are

explicit or tacit agreements between competitors to fix prices or allocate

markets.

b. Exemptions/Immunities

The Brazilian Antitrust Law does not provide any exemption to

particular sectors or entities. To the contrary, Article 31 expressly provides

that the statute “applies to individuals or legal entities of public or private

law, as well as to any associations of entities or individuals, whether de

facto or de jure, even temporarily, incorporated or unincorporated, even if

engaged in business under the legal monopoly system.”

1. Law No. 12,529/2011.

2. Law No. 8,137/1990.

3. Law No. 8,666/1993.

4. Law No. 12,846/2013.

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c. Standard of Proof

Under the Brazilian Antitrust Law, the finding of an antitrust violation

does not require evidence that the conduct at issue effectively produced

negative effects in regards to competition. It is sufficient to show that the

conduct has the potential of harming competition by way of, for example,

excluding competitors from the market or allowing competitors to charge

supracompetitive prices for their products or services. Potential effects

may be shown based on the analysis of factors such as the structure of the

relevant market, the market power of the alleged wrongdoers, barriers to

entry, the characteristics of the product or service concerned, and price

elasticity of demand, among others.

In cartel cases, it is not necessary to conduct a detailed market analysis

in order to show that the conduct at issue has the potential to harm

competition. This is because the harmful effects of cartels are so clear that

it should not be necessary for the competition authorities to expend

resources on an exhaustive inquiry into them. Cartels may be presumed to

produce negative market effects, and it is up to the companies involved in

the alleged practice to prove otherwise.

The Brazilian Antitrust Law does not expressly set forth the types of

evidence that may be relied on to demonstrate an antitrust violation at the

administrative level. This matter is governed by Law No. 13,105, dated

March 16, 2015 (Brazilian Civil Procedural Code), which applies to

administrative proceedings pursuant to Article 115 of the Brazilian

Antitrust Law. However, precedents by the Brazilian Antitrust Authority

(CADE) establish that an antitrust violation may be supported by either

direct or indirect evidence, including emails, letters, minutes of meetings,

depositions of witnesses, or telephone tapping. 5 Direct evidence

encompasses materials that establish facts particular to the conduct under

investigation, while indirect evidence means evidence of other facts from

which it is possible to infer the conduct under investigation. Penalties may

5. See Administrative Proceeding No. 08012.002299/2000-18, where the

convicted individuals discussed the cartel scheme over the telephone;

Administrative Proceeding No. 08012.007602/2003-11 and

Administrative Proceeding No. 08012.002493/2005-16, where the

convicted individuals attended meetings with the purpose of fixing prices;

Administrative Proceeding No. 08012.001826/2003-10, where the

individuals exchan ged e-mails and discussed the cartel scheme over the

telephone; and Administrative Proceeding No. 08012.006019/2002-11,

where the convicted individuals exchanged letters, attended meetings and

discussed the cartel scheme over the telephone.

Cartel Cases Under Non-U.S. Competition Laws 275

be based solely on indirect evidence where CADE deems it sufficient to

establish the existence of unlawful conduct.

Considering the punitive nature of CADE’s actions and its

implications to businesses and individuals, a violation must be proved

based on a preponderance of evidence. This standard requires that the

party bearing the burden of proof shows that it is more probable than not

that is has met the standard of proof it bears. The burden of proof in a

proceeding that investigates the existence of a cartel agreement lies with

CADE. However, if there is evidence of undue contacts between

competitors, the burden of proof will be reversed, and the defendants will

be charged with proving the absence of illegality in such contacts.

d. Whether Information Exchange Is Violative

Exchange of competitively sensitive information is also potentially

illicit. In practice, however, separating the exchange of sensitive

information from other conduct—such as price fixing—is not an easy task,

and CADE has usually found that competitors shared information in order

to agree on a given course of action. For this reason, in most cases CADE

analyzes information exchange in conjunction with other conduct.

e. Whether Enforced Civilly or Criminally

(1) Civil Enforcement

Companies and individuals involved in anticompetitive practices are

also subject to litigation prosecution in Brazil. The affected entities or

individuals may recover losses they sustained as a result of a violation,

apart from obtaining an order to cease the illegal conduct. State and

Federal Prosecutors’ Offices may also file a lawsuit on behalf of

consumers that may have experienced damages arising from the

anticompetitive or corrupt practices. In both cases, the plaintiffs may seek

compensation for pecuniary damages and moral damages.

(2) Criminal Enforcement

There are no criminal sanctions for companies in connection with

antitrust investigations in Brazil. Only individuals may face criminal

charges.

The Brazilian Economic Crimes Law provides that cartels are a

criminal offense and that individuals involved in cartels may be subject to

two types of penalties: (i) fine and (ii) imprisonment from two to five