Partner Denise Junqueira was invited by the Administrative Council for Economic Defense (“CADE”, in its Portuguese acronym) to attend the 2025 ICN Unilateral Conduct Workshop as a non-governmental advisor (“NGA”). The event was hosted by CADE and the International Competition Network (“ICN”) on March 12-14 in Rio de Janeiro and brought together antitrust authorities and NGAs from various jurisdictions. Discussions covered a wide range of unilateral conduct issues, including those potentially related to digital markets, self-preferencing and exclusivity.
CADE’s Tribunal unanimously dismissed the alleged bid-rigging cartel case regarding the construction of a hydroelectric power plant due to lack of evidence. The administrative proceeding was initiated following a leniency agreement in which one of the companies involved in the bid alleged the existence of anticompetitive conduct. This is the second case related to “Operation Car Wash” ruled by CADE’s Tribunal.
CADE’s Superintendence General (“SG”) originally recommended the conviction of the investigated parties, arguing that the information and documents presented in the leniency agreement were sufficient to prove the alleged anticompetitive conduct. But CADE’s Tribunal disagreed concluding that they were not sufficiently corroborated by further information during the investigation to support a potential conviction. In this regard, the Tribunal emphasized that the leniency applicant’s narrative is a means to obtain evidence but is not in itself sufficient to justify a conviction, so it is essential to have additional evidence to corroborate the allegations.
In a 6-1 vote, CADE’s Tribunal decided to reduce the effects of a preventive measure requested by a pulp manufacturer (“Investee”) against a minority shareholder (“Minority Shareholder”), controlled by an alleged competitor (“Investor”), under the allegation of abuse to hinder the Investee’s business for the Investor’s benefit.
The preventive measure was granted by the SG in November 2024, suspending the Minority Shareholders’ corporate rights. The Minority Shareholder appealed the SG’s decision to CADE’s Tribunal and filed a writ of mandamus before the Judiciary. In January 2025, the Federal Regional Court suspended the preventive measure until CADE’s final ruling on the appeal.
In its ruling, CADE’s Tribunal narrowed the scope of the preventive measure to suspend only the Minority Shareholder’s veto rights regarding the Investee’s expansion projects, as the potential abuse of the veto power could jeopardize the Investee’s competitiveness and unduly benefit the Investor. As a result, other rights were reinstated, such as the ability to appoint members to the Investee’s board.
CADE’s Tribunal dismissed a gun-jumping probe regarding the transfer of shares between partners in a 50/50 company in which the buyer would hold a majority stake in the company after acquiring 19.6% of the seller’ shares.
The Tribunal concluded that the transaction did not involve an acquisition of sole control, given that the company’s shareholders agreement guaranteed veto rights to the seller, who would remain as a minority shareholder with control power. Hence, it concluded that the transaction was not subject to premerger review due to lack of change on target’s control. Notwithstanding, the Tribunal indicated that the addition of one or more new controlling shareholders, regardless of whether they replace the existing controlling shareholders, as well as the reduction of the number of controlling shareholders, would trigger premerger review.
Moreover, CADE found that, in the absence of control change, the acquisition of less than 20% share by a controlling shareholder that has no horizontal or vertical relation with the target would also not trigger mandatory premerger review, as per the thresholds set by the Brazilian legislation.
CADE’s Tribunal unanimously convicted two labor unions and two individuals for allegedly engaging in anticompetitive practices in the Rio de Janeiro gym industry. The conduct was reportedly implemented through a provision in a collective bargaining agreement (“CBA”), which limited the number of clients that each fitness instructor could supervise within a gym.
Reporting Commissioner José Levi indicated that the abovementioned stipulation would result in an unjustified restriction of free competition, as it would render the “low cost, low fare” business models of the complaining gyms economically unsustainable, raising their costs and impairing their competitiveness. Thus, such a restriction would deprive customers from a widely accepted and available market alternative, which currently provides services at reduced prices.
CADE’s Tribunal unanimously cleared the acquisition of a stake in an online supermarket platform by a competing company. The SG had previously approved the transaction, but the Tribunal reopened the analysis following a call-back vote by Commissioner Camila Alves, who deemed necessary to further assess the definition of the relevant markets and the parties’ market share.
In its call-back vote, Commissioner Camila Alves emphasized that digital markets are characterized by complex competitive dynamics, which range from new entrants facing operational and financial challenges to well-established incumbents capable of conducting serial acquisitions. Therefore, when analyzing transactions in digital markets, it would be important to weigh the risks of eliminating competition against the potential efficiency and innovation gains.
Acknowledging the competitive particularities of digital markets, Reporting Commissioner José Levi unconditionally cleared the transaction based on two key elements: (i) the parties face significant competition from both online and physical supermarkets, and (ii) the target’s market share is relatively low in the different scenarios analyzed. Thus, CADE’s Tribunal concluded that the transaction did not raise competition concerns.
The Brazilian National Congress has approved a bill that establishes criteria for the intervention of the Brazilian Foreign Trade Chamber to address sanitary, environmental and trade barriers that could undermine the competitiveness of Brazilian exports. The bill has been framed in the context of the current paralysis of the World Trade Organization’s dispute settlement mechanism and the increasing economic and environmental restrictions on international trade. The bill still requires the presidential approval to be enacted.
In recent months, the Foreign Trade Secretariat (“SECEX”, in its Portuguese acronym) has initiated anti-dumping investigations into the following Brazilian imports:
Additionally, SECEX has initiated a review of the anti-dumping duty applied to the following Brazilian imports:
Furthermore, SECEX issued a preliminary affirmative determination of dumping and injury to the domestic industry and extended the deadline for the completion of the investigation into dumping practices regarding the following Brazilian imports:
Lastly, SECEX has extended the deadline regarding the review of countervailing duties on imports of cast iron and chromium steel grinders from India.
According to SECEX Circular N. 02/2025, certain trade defense measures applied to Brazilian imports will expire in 2025. Parties interested in extending these measures may submit a petition to initiate a sunset review, which must be filed no later than four months prior to the anti-dumping duty expiration. If the reviews are initiated, interested parties will be able to actively participate in the proceedings.
The following imports are subject to trade defense measures for which sunset review petitions may still be filed, considering the minimum four-month advance: (i) S-PVC from China (petitions due April 14, 2025); (ii) carbon steel pipes from Ukraine (petitions due May 22, 2025); and (iii) polypropylene resin from South Africa and India (petitions due June 28, 2025).
Denise Junqueira
djunqueira@cascione.com.br
Brazilian Competition Case Law, Trade & Trends | April 2025