LEVY & SALOMÃO A D V O G A D O S Competition Law in Latin America: Lessons to Learn The Brazilian experience Ana Paula Martinez June 15, 2012 – Oxford.

LEVY & SALOMÃO A D V O G A D O S

Competition Law in Latin Competition Law in Latin America: Lessons to LearnAmerica: Lessons to Learn

The Brazilian experienceThe Brazilian experience

Ana Paula MartinezAna Paula MartinezJune 15, 2012 – OxfordJune 15, 2012 – Oxford


www.levysalomao.com.br

Why competition is important?



Competition and Innovation: Inverted U Relationship



Lesson No. 1

Competition law can do little for competition in the absence

of a market-oriented framework



Landmarks of Competition Law & Policy in Brazil

2012



Lesson No. 2

A mandatory post-merger system is extremely ineffective



Lesson No. 2



Lesson No. 3

The agency needs to have adequate investigatory tools

and sanctions should be designed and effectively

applied to deter violations of the law



Law amended in 2000 to include dawn raid powers and leniency agreement

First leniency agreement executed in 2003. More than 20 agreements executed from 2003-2011

More than 300 search and seizure warrants served

Direct evidence: (i) supports criminal charges; (ii) allows the competition agency to impose substantial fines; (iii) supports the administrative rulings before the Judiciary

Administrative and criminal enforcement ensures deterrence

Ações

Estratégia



Operação Pacto 274: Economia de R$ 32 milhõesEvolução do preço e do consumo de gasolina

tipo C em João Pessoa

Real Case: Gasoline Retail Market



Case AmountIndustrial Gases Cartels (2010) US$ 1.3 billion

Abuse of market power (2009) US$ 250 million

Security Services Cartel (2007) US$ 25million

Vitamines Cartel (2007) US$ 10 million

Crushed-Rock Cartel (2005) US$ 45 million

Steel Cartel (2005) US$ 210 million

Flat Steel Cartel (1999) US$ 38 million

IT Services Settlement (2011) US$ 20 million

Compressors Settlement (2009) US$ 60 million

Plastic Bags Settlement (2008) US$ 15 million

Cement Settlement (2007) US$ 25 million



Multimillionaire fines: is this the right way?



Lesson No. 4

Cooperation among agencies is crucial to ensure outstanding

results



Leading Case: Rio Madeira (2007) A major Brazilian construction company entered

into exclusivity agreements with all turbine suppliers with plants in Brazil prohibiting them to deal with other bidders in connection with the Rio Madeira energy bid

The competition agency adopted an interim measure to suspend the effectiveness of the exclusivity contracts; Settlement reached before the bid took place following intense cooperation between enforcers and regulators

Due to competition, the final price for the energy was 35% lower than the cap price



Leading Case: Rio Madeira

6

Total savings for the 30 years of the concession agreement are estimated

in BRL16.4 billion



Lesson No. 5

Develop a wider culture of competition



Lesson No. 5

Develop a wider culture of competition



What to expect now?

21

?

Vinícius Carvalho Vinícius Carvalho (Presidente)(Presidente)

PROCADEPROCADEGilvandro AraujoGilvandro Araujo

Superintendente-Superintendente-Geral Carlos RagazzoGeral Carlos Ragazzo

Ana FrazãoAna Frazão Ricardo RuizRicardo Ruiz Elvino MendonçaElvino Mendonça Marcos Marcos VeríssimoVeríssimo

Alessandro Alessandro OctavianiOctaviani


Novo CADE

Eduardo PontualEduardo Pontual

http://www.google.com.br/imgres?imgurl=http://www.senado.gov.br/noticias/inc/multimidia/verImagem.aspx%3FcodImagem%3D321074&imgrefurl=http://www.senado.gov.br/noticias/cae-aprova-indicacoes-para-o-cade.aspx&usg=__WciCD9hAI4v-PmWU6QqI1KnHCnQ=&h=150&w=200&sz=24&hl=pt-BR&start=1&zoom=1&um=1&itbs=1&tbnid=fliyWpY1hjvdDM:&tbnh=78&tbnw=104&prev=/search%3Fq%3Delvino%2Bde%2Bcarvalho%2Bmendon%25C3%25A7a%26um%3D1%26hl%3Dpt-BR%26sa%3DN%26biw%3D1004%26bih%3D606%26tbm%3Disch&ei=r_XLTeS6IIa6sQPKhLXMBg



Greatest challenge: implementation of the pre-merger regime and restructuring of the system

Increased number of complex mergers filed (market consolidation)

Top priority: prosecuting bid-rigging

Next frontier: Private claims


Ana Paula Martinez

[email protected]

+55 11 3555 5059

LEVY & SALOMÃO A D V O G A D O S Competition Law in Latin America: Lessons to Learn The Brazilian experience Ana Paula Martinez June 15, 2012 – Oxford.

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