The Commission proposed the following lines of inquiry for the referred to inspection, formulated as objective questions to be answered in the inspection process: (i) Is there coherence and harmony in CADE’s decisions, regarding authorizations, penalties, fines, and other decisions, concerning different companies?; (ii) Is there any bias in the collegiate’s decisions that may be harming the business environment in our country?; (iii) How is CADE incorporating the provisions of §3 of art. 1 of Law 13,874/2019 in its decisions?; and (iv) Is there any aspect of CADE’s performance that may be increasing the degree of legal uncertainty in our country?

As a result, TCU’s plenary sent questions to CADE about the performance of some of its bodies and the compliance of its day-to-day activities with the dictates of the Economic Freedom Law. The questions sent to CADE were:

• if the Department of Economic Studies (DEE/CADE) prepared studies, regarding the scope and possible impacts of Law 13,874/2019, in relation to the performance of the autarchy. If so, clarify what was done, and forward relevant documentation to this Court;
• if CADE promoted any changes in internal regulations and/or in procedural rites, in order to guide and adapt the activities carried out by its technical staff and/or its judging bodies, in view of Law 13,874/2019. If so, indicate what changes were made and send this Court a copy of the amended rule; and
• when judging the cases submitted to it, if, and how, has CADE been incorporating the principles and provisions of Law 13,874/2019 into its decisions, exemplifying, if possible, judgments handed down by the autarchy since the enactment of the referred to law.

The work of the Commission and the TCU began with a meeting scheduled for the first week of November with CADE to address this issue.

O conteúdo CADE and the Economic Freedom Law aparece primeiro em Grinberg Cordovil Advogados.

One of the main changes introduced, in addition to the statute of limitations, is the requirement to prove intent of an agent during the misconduct, extinguishing the culpable punishment modality. In this sense, the new wording of Art. 1 incorporates into its first paragraph, “Acts of administrative misconduct are considered to be those intentionally practiced, which are set forth in arts. 9, 10, and 11 of this Law, alongside those exceptionally provided for in special laws” and in its second paragraph, “Intent is considered as the free and conscious will to achieve the illicit result set forth in arts. 9, 10, and 11 of this Law, where an agent’s voluntariness is insufficient.”

This change, among others, brought about relevant controversy, regarding the retroactive application of the alteration, since they could be beneficial to the agents under investigation.

Accordingly, the STF recognized the general repercussion in the Interlocutory Appeal in an Extraordinary Appeal (ARE) 843,989, which discusses the issue of retroactive application of the extinction of the culpable modality (i.e. the need for intent), among other topics. Originally, the process deals with an administrative misconduct suit proposed by the INSS before changes in the LIA, wherein the appellate raises the point that the acts attributed to the individuals resulted from negligence without demonstration of intent.

The trial will take place on August 3^rd, and it will serve as a parameter to establish whether the changes in the LIA should retroact to benefit those who have committed acts of administrative misconduct with intent. In recognition of the general repercussion, the Reporting-Minister Alexandre de Moraes noted that the debate is extremely important for the political, social, and legal scenario, and it is not restricted to the parties involved.

O conteúdo STF judges the retroactivity of the new rules of the Administrative Misconduct Law aparece primeiro em Grinberg Cordovil Advogados.

In addition to its already well-known institutional attributions with the Brazilian System for the Defense of Competition (SBDC), as described in Law No. 12,529/2011, since 2019, with the publication of Decree No. 10.044/2019, CADE became a guest member, on a permanent basis, of the Management Executive Committee (Gecex) of the Foreign Trade Chamber (Camex), the body responsible for foreign trade policies.

Since then, the Council has also started to act more actively in trade defense investigations, both through the presentation of manifestations in the so-called Public Interest Assessments of commercial remedies, and in the debates established at Gecex meetings. Despite not having the right to vote in decision-making, its role is relevant and, at first, it has taken the direction of contributing with subsidies in matters of competition defense, especially for the assessment of the potential competition impacts of trade defense measures.

In general terms and simply put, the application or not of trade defense measures decided by Gecex (such as anti-dumping duties or safeguard measures, which may or may not be suspended for reasons of public interest), always has the potential to affect competition between local and international suppliers of the evaluated products. With this, an attempt is made to level competition at the national level in cases where it is verified that imported products are being supplied in the domestic market at prices below their normal sales value of the like product in the country of origin, as a result of the exporter’s strategy or in due to political measures in the exporting country. It is also necessary to assess whether the mismatches between prices are effectively causing damage to sales of domestic products similar to the imported ones investigated, and to rule out the possibility that this damage is being caused by other factors.

In this step, the contribution of a body specialized in competition analysis, with already consolidated expertise on the functioning of certain sectors, is very necessary and represents an important advance in the integration of trade defense and competition policies. CADE’s initiative to hire technical consultancy for the preparation of studies and construction of its action strategy in trade defense cases is therefore very welcome, as it will allow the Autarchy to improve its knowledge of the applicable rules and adapt to its attribution as a member of Gecex.

Based on an analysis of the contract notice published by CADE, it is expected that the Consultant will help improve the Authority’s technical understanding of new trade defense topics (such as updating the procedures for investigating subsidies and application of compensatory measures, brought by Decree No. 10.839/2021). In addition, the Municipality is concerned with deepening its understanding of the productive sectors historically involved in trade defense processes (such sectors would be metals, chemicals and plastics, as pointed out in the article by Naiana Magrini, co-authored with Anna Nogueira, 2021[1]). Finally, the Consultant will also be responsible for training CADE’s employees in relation to trade defense issues. The hiring, in this sense, is very welcome and it is expected that it will in fact contribute to the promotion of a healthier competitive and economic environment in the national context.

[1] NOGUEIRA, Anna; MAGRINI, Naiana. Concentração setorial na aplicação de medidas antidumping no Brasil: análise de fatores jurídicos e econômicos. In: ATHAYDE, Amanda; MELO, Lilian Cintra de (org.). Comércio Internacional e Concorrência, desafios e perspectivas atuais (Vol. III). Disponível em: < https://www.amandaathayde.com.br/livros-organizados > Acesso em 02/05/2022.

O conteúdo CADE hires a consultant to prepare studies on trade defense : What is the role of the autarchy in joint action with CAMEX? aparece primeiro em Grinberg Cordovil Advogados.

According to the Guide, the characterization of an abusive price increase – i.e. the unjustified increase in prices of products or services – is based on the following premises: (i) free prices are crucial for the functioning of the market; (ii) price increases may be justified, for example, by increases in market costs or changes in the balance between supply and demand; and (iii) free competition and the fight against violations of the economic order are fundamental in combating disguised and deliberate price speculation in markets with uncompetitive structures or momentary atypical disturbances that are being faced (as in the case of the Covid-19 pandemic). Based on these elements, public authorities should consider intervening only on an exceptional basis and when there are indications of deliberate and unjustifiable arbitrariness and distortions.

For authorities to act, the Guide proposes a script for action when abusive prices are suspected:

1. Identification/registering of the potentially abusive practice, at which time preliminary indications must be collected and analyzed for a decision on whether or not to act in the identified situation. Such identification would occur with the verification of price increases that extrapolate the context and effects of specific supply and demand shocks, in addition to consulting the main inflation indexes to deliberate on the existence of exceptional readjustments. The decision not to act directly (for example – not instituting a sanctioning administrative process) must be taken, if all the necessary elements are not available to conclude concerning the arbitrariness of the price increase or if the result of its action could have caused more negative effects than positive (such as shortages, greater market concentration, or even legal uncertainty).
2. Preliminary referrals for analysis by competent authorities. If there are indications of other conduct related to the abusive increase, the procedure must be forwarded to other authorities. An example would be if there is evidence of collusion, then CADE must be notified. If the alleged abuse involves a regulated market, there must be liaison with the specific regulatory authority. If a crime against the general economy is suspected, the procedure must be shared with the Public Ministry, etc.
3. Verification of the existence of exploitation of specific situations to increase prices, such as, the exploitation of emergencies and calamities for abusive increases. The Guide also provides specific recommendations for analyzing price increases in the service sector or in relation to basic food baskets and food products.
4. Applicable economic and legal analysis. At this stage, the analysis must be carried out on a case-by-case basis, based on technical and objective criteria for the observed price increase. In this sense, the Guide highlights that “as we know, the increase “per se” is not always a sufficient criterion for verifying the “abusiveness” of economic agents.” Thus, the guide recommends that the economic-legal analysis follow the following steps: (i) identify the product in which the abuse is to be verified; (ii) identify companies that compete in this market; (iii) identify the elements that are part of the production chain, including raw materials; (iv) request purchase and sale invoices with a reliable historical series, with a recommendation of at least 3 months (90 days); and (v) identify the existence of economic rationality in the price increase or if it is merely business opportunism (a situation in which abusiveness would remain configured).
5. Closure with the filing or application of applicable sanctions to the investigated agent.

The Guide highlights the following as competent agencies to deal with the issue (whether in a preventive or corrective way): the National Consumer Secretariat, who coordinates the National Consumer Protection System (Senacon), the Secretariat of Competition and Competitiveness Advocacy of the Ministry of Economy ( SEAE-SEPEC/ME), the Administrative Council for Economic Defense (Cade), the administrative authorities for consumer protection and defense, in states, Federal District, and cities (Procons), the Public Ministry, the Public Defender’s Office, and finally, the Regulatory Agencies in the case of sectoral markets. This means that the Guide starts with the comprehensive and expansive attention of public authorities and civil society in the inspection and monitoring of this practice.

The MJSP also reinforces that sanctioning procedures are not the only mechanisms available to consumer protection authorities for the fulfillment of their institutional missions and for the prevention, supervision, and correction of possible conduct. The following can and should be used as well – analyses, issuing guidelines, and even resorting to the Collective Consumption Agreement described in the CDC, art. 107 between civil consumer protection entities and suppliers.

O conteúdo Ministry of Justice and Public Safety issues guide on abusive price increase aparece primeiro em Grinberg Cordovil Advogados.