Guilherme Ribas fala à Latin Lawyer e Global Competition Review

Guilherme Ribas, sócio da área de Regulação e Concorrência de Mundie e Advogados, falou à Global Competition Review e à Latin Lawyer sobre o processo administrativo instaurado pela Superintendência-Geral do Cade para investigar suposto cartel no mercado nacional de produção e fornecimento de silicatos. Para Ribas, o CADE tem aberto se dedicado a abrir menos, porém mais rigorosas, investigações de cartel. 

Brazil tackles silicate industry after opening cartel investigation
Monday, 6 July 2015

Tom Madge-Wyld

Brazil’s Administrative Council for Economic Defence has announced administrative proceedings against five chemical companies, which it says colluded as part of a six-member cartel to fix prices and allocate customers in the country’s silicate market.

The authority confirmed on Friday that it had reached a settlement with one company and was investigating the other five, along with 24 company officials.

Together the chemical companies account for more than 90 per cent of the domestic market for the manufacture and supply of silicate, a silicon compound used in numerous industries, including cement, paint, adhesives and textiles.

The enforcer said it found evidence of the collusion amongst the companies’ records following dawn raids in November 2012, which included tables setting out customer division, sales and cover price practices.

The companies named in its investigation include DAV Química do Brasil, Manchester Química do Brasil, Pernambuco Química, PQ Silicas Brazil and Una-prosil Ind.

In a statement, the enforcer said it had strong evidence to suggest the chemical companies colluded on price, commercial terms and customer allocation between 1999 and 2012. It added that there was also evidence to suggest the companies agreed to share commercially sensitive information and rig contractual tenders.

According to the authority, the companies allocated customers by having one member set an individual purchase rate for a customer, above which the other companies would then price, to give a false appearance of market competition.

When a company did not cooperate, it was penalised by the other cartel members, who attempted to appropriate customers who previously had been allocated to the now non-cooperating company.

A sixth member of the alleged cartel, Diatom Mineração, and four of its executives admitted to their involvement in June, prior to the issuance of charges against the other five members. Diatom reached a settlement agreement with the authority after agreeing to pay a discounted fine of 3.3 million Brazilians reais (€950,000) and to cooperate with the regulator.

Unlike a leniency application, a settlement requires mandatory cooperation with the authority, which can require a company to share material documents, secure cooperation of employees and to volunteer witnesses at court during the course of a trial. The settlement does not cover potential criminal charges.

Guilherme Ribas, at Mundie in São Paulo, says CADE has recently dedicated its resources to opening fewer, but stronger, cartel investigations. This investigation is a good example of this approach, he says.

“The settlement agreement, which was concluded prior to the opening of the formal investigation, demonstrates that companies are more concerned by these cartel investigations, increasing the incentives for both leniency and settlement,” he says.

The alleged cartel members have 30 days to respond to the allegations, after which the General Superintendent can refer the case to CADE’s tribunal for trial.
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