Guilherme Ribas fala à Global Competition Review31/07/2015
O sócio da área de Regulação e Concorrência de Mundie e Advogados, Guilherme Ribas, falou à Global Competition Review a respeito da confirmação das elevadas multas aplicadas pelo CADE às empresas de cimento condenadas por formação de cartel. Para Ribas, é muito provável que as partes recorram ao Poder Judiciário para tentar anular a decisão.
Brazil reinforces cement cartel decision
Brazil’s Administrative Council for Economic Defence yesterday upheld huge fines it issued last year to a cement cartel: a combined penalty of 3.1 billion Brazilian reais (€849 million).
The ruling confirms the decision made in May 2014, rejecting the companies’ appeal. The fines hit six companies, three associations and six individuals.
A lawyer close to the case said the decision was expected as the council, or CADE, is known to be reluctant to raise questions of “omission, contradiction and misunderstanding” in original decisions.
In a change to last year′s ruling, the competition authority reduced the media obligation imposed on the companies. Only the companies, and not the individuals concerned, are required to publicise CADE’s decision and only in one leading newspaper.
Previously all named parties were required to file multiple adverts in multiple outlets, but the authority decided the level of press attention the case has already generated reduced the need for the announcements and took into consideration the excessive cost to the individual.
CADE also removed the prohibition on the companies’ use of government-owned banks after an objection from Banco do Brasil, which claimed the decision would be detrimental to its activities and give private banks an unfair advantage.
The cement industry has seen dramatic concentration over the past two decades, from more than 20 companies in the early 1990s to just 10 in 2011. The price of cement has risen by two-thirds over the past decade, as Brazil embarked on huge infrastructure projects such as last summer’s football World Cup.
The companies named in this case control 75 per cent of the market. The authority claims they engaged in bid rigging, and that a series of strategic takeovers and asset swaps prevented rivals from entering the market from 1986 to 2007.
The Secretariat for Economic Defence, CADE’s predecessor, began looking into the market 10 years ago after a tip-off from a former Votorantim employee, and recommended prosecution in 2011.
According to a CADE report published last year, the alleged cartel has cost Brazil’s economy around 1.4 billion reais each year for the last two decades. It was described as “an affront to the dictates of the constitution” in a 10-hour hearing last year.
Guilherme Ribas, a partner at Mundie Advogados in São Paulo, said a further appeal is likely.
“Since CADE is an administrative body, like the European Commission, all the decisions are subject to judicial review,” Ribas said. “This judicial battle may take years, the authority’s first cartel conviction in 1999 is still under judicial review,” he added.
Following the ruling Brazil’s largest cement company, Votorantim must pay 1.5 billion reais (€409 million), Holcim 509 million reais (€139 million), Itabira 411 million reais (€112 million), Cimpor 297 million reais (€81 million), Intercement Brasil 241 million reais (€66 million), and Itambé 88 million reais (€24 million).
Three industry associations have to pay between 1 million and 2 million reais (€330,000 and €660,000) each while the six individuals, five from the companies and one from an association, received fines ranging from 500,000 reais to 15.6 million reais (€164,000 to €5.1 million).
The companies have been given one month to pay the fines and one year to divest key cement plants and facilities, part of the structural remedies attached to the decision.
Counsel to Votorantim
Koury Lopes Advogados
Partner Gianni Nunes de Araujo in São Paulo
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