The ACP, proposed by the Public Prosecutor’s Office of the Federal District and Territories (“MPDFT”) and filed against Infortexto Ltda., requires the defendant to delete the personal data it considers to have been processed in an irregular manner, pursuant to art. 44 of the LGPD. Once verified that the site entitled “Digital Reminder”, which used the domain lojainfortexto.com.br, is under maintenance, the complaint was rejected by Judge Wagner Pessoa Vieira for lack of interest in the claim. The rejection is justified in the magistrate’s view because he said that the maintenance probably only stems from an attempt by the owners of the site to adapt to the recent legislation, which came into force on September 18, 2020.

 In a petition filed in ACP records on September 22, the MPDFT claimed that the mere act of putting the site into maintenance does not remove the usefulness of the proceeding. The plaintiff demonstrated in her statement that the defendant’s website was still selling personal data on the afternoon of the judgment rejecting the complaint, leaving the database intact and ready to be made available again. The case files were forwarded to the responsible judge for a decision on the morning of Wednesday, September 23.

O conteúdo FIRST LAWSUIT BASED ON THE BRAZILIAN GDPR FILED aparece primeiro em Grinberg Cordovil Advogados.

The operation consisted of the acquisition  of assets for the manufacturing and marketing of decorative paints and hydrated lime from the brand Hipercor in 2019, held by the companies Arco-Íris and Midol, by Hidracor, up until that time. Cade received the operation by voluntarily submission on January 16, 2020 and approved it by the fast track without restrictions , which is applicable to simple cases with low potential offense to competition. Simultaneously to the analysis of the merger, CADE established administrative procedures to determine if the transaction was consummated without prior authorization from the authority.

During the case’s trial, Reporting Commissioner Maurício Oscar Bandeira Maia concluded that the transaction was effectively notified late, since it occurred prior to its submission to CADE in 2020. Arco-Íris and Hidracor verbally agreed to the assignment of assets and brands in January 2019, and they entered into a definitive purchase and sale agreement in July 2019. To conclude the investigation, the companies proposed an Agreement, in which they recognized the practice of gun jumping and assumed a pecuniary contribution fixed at R$ 193,000.00, which was accepted by CADE’s Tribunal.

Despite the good faith demonstrated by the parties in voluntarily notifying CADE of the merger, proposing an Agreement, and the minimal competitive impact of the operation approved by the fast track, the amount of the contribution was over three times higher than the base fine of R$ 60,000.00, which was established in Resolution no. 24/2019 to discipline the procedures of verification for gun jumping. This was the second case evaluated under the new Resolution.

O conteúdo Cade concludes agreement with companies that practiced gun jumping aparece primeiro em Grinberg Cordovil Advogados.

O conteúdo What are we accused of? The future of antitrust: two important procedural flaws in Brazilian Antitrust System and how to correct them aparece primeiro em Grinberg Cordovil Advogados.

Although the document is not binding, the initiative rewards legal sanctity by indicating the methodology applied by the Brazilian antitrust authority to calculate fines, in accordance with the recommendations of the Organization for Economic Cooperation and Development (“OECD”).

The Guide lists three steps for calculating the fine: (i) establishing the calculation basis and reference rate; (ii) adjusting the rate based on the duration of the cartel and, subsequently, on the mitigating and aggravating factors; and finally, (iii) adjusting the fine to the legal requirements. This Guide is compliant with the guidelines already addressed by the Cease and Desist Agreement for cartel cases, published by Cade in 2016.

Regarding the first step, the definition of the calculation basis and the reference rate, the Guide acknowledges that although the rule for the calculation basis is the gross revenues of the business segment, this parameter often needs to be flexibilized, in order to use the parameter of revenues in the market affected by the conduct in the year prior to the administrative proceeding, for the purpose of proportionality and ensuring the dissuasive effect of the fine. By ‘affected market’, the Guide specifies that it is the one targeted by the conduct, in which there may have been a concrete or merely potential impact. In this topic, the Guide lists, for example, some scenarios already adopted by Cade, for setting the calculation basis in relation to the base year of revenue and in relation to revenue in the national territory/geographical area affected, when it is not possible or reasonable to apply the legal rule.

Still on setting the calculation basis, the Guide proposes that the monetary adjustment be made based on the Selic rate. The amount to be adjusted corresponds to the period between the revenue used (by the legal rule, the revenue obtained in the year prior to the administrative proceeding) and the month prior to the conviction with the imposition of the fine. The value can be adjusted either by adding the monthly fees or by deducting the fee accumulated in the starting point from the fee accumulated in the starting point.

Once the calculation basis has been defined, it is the moment to proceed to the rate adjustment. In this topic, Cade highlights an important aspect of its case law, the reference rates for each horizontal conduct. Namely:

For cartels in public bids, the reference rate is 17%, and it may be higher than that or reach a minimum of 14%;
For classic cartels, those agreements or exchanges of information would be related to prices, geographical division, share, or customers, which have mechanisms for monitoring/punishment of misalignment and continuity. The rate to be applied is 15%, and it may be higher than this value or reach a minimum of 12%;
For other forms of joint conduct, including diffuse cartels, such as sporadic or non-systematic exchanges of information, unilateral disclosure of information, price fixing, among others, the reference rate of 8% is used, which may be higher than this or reach a minimum of 5%. The variations between reference value and minimum rate must be applied, considering the mitigating and aggravating factors of the conduct, according to Cade’s case law.
Firstly, the duration of the conduct is a relevant issue in the rate calculation. In this sense, the Guide proposes the addition of 0.5 percentage point (p.p.) to the rate per additional year of the conduct. For example, if the cartel lasted 9 years, 8 years will be computed, since the first year is already included in the reference rate. Therefore, 4 p.p (0.5 x 8 = 4) will be added.

Then, the second adjustment is made according to the mitigating and aggravating factors listed in article 45 of Law no. 12,529/2011. They are as follows: seriousness of the infraction; the infringer’s good faith; the advantage obtained or intended by the infringer; the materialization or not of the infringement, degree of damage, or danger of damage to free competition, to the national economy, to consumers, or to third parties; negative economic effects produced in the market; infringer’s economic status; and recidivism. The Guide highlights that suggestions for interpretation may be appropriate to the specific case.

Finally, the last step is the adequacy of the calculated fine to the legal limits imposed. For companies, Law no. 12,529/2011 delimits the minimum of 0.1% and the maximum of 20% of the gross revenues of the company, group, or conglomerate obtained, in the last fiscal year prior to the filing of the administrative proceeding, in the business line in which the violation occurred. After checking whether the fine is within the established limits, it is verified whether there is a recidivism. If there is, the amount of the fine must be doubled.

The Guide also makes considerations concerning the imposition of fines on legal entities that do not engage in business activity – such as associations and trade unions – and on convicted individuals. For the former, the Guide highlights the legal limits of fines between R$ 50,000 and R$ 2 billion, but it does not provide a specific fine calculation for these institutions.

For individuals, the fine has as its calculation basis, the amount imposed on the company where they worked at the time of the conduct, and the rate varies between 1 and 20% of the company’s fine, depending on the employee’s degree of participation in the cartel, and if he/she is an administrator. The Guide suggests the following attributions as leadership characterizers for measuring participation in the conduct, which are perceived as aggravating factors by the case law of Cade: (a) leadership positions (president, partners, de jure or de facto administrators, and/or directors), and (b) protagonism in negotiations. For other individuals (not administrators), the fine will be between R$ 50 thousand and R$ 2 billion.

For infractions committed under Law 8884/1994, Cade’s case law guides that the old law should be applied to associations, trade unions, and non-administrators, as it is more beneficial. However, this does not exclude the application of such law to other respondent persons who prove that it is more beneficial to their case.

Finally, the Guide reflects on the application of alternative sanctions provided for in Article 38 of Law No. 12,529/2011. Although the main sanction is the fine, CADE’s Tribunal may impose alternative sanctions in isolation or cumulatively to the fine, based on the creation of a deterrent effect against the commission of new infractions and inhibiting any harmful effect to the economic order.

O conteúdo Cade presents a Guide on Fine Calculation aparece primeiro em Grinberg Cordovil Advogados.

The guidelines define that, in order not to violate competition law, collaborations must have: (i) the scope limited to the problem arising from the pandemic; (ii) the duration restricted to the period necessary to fight the effects of the crisis; (iii) the geographic territory attached to the place where Covid-19 strikes, since the pandemic can develop unevenly across the country; and, finally, (iv) the principles of compliance, transparency and good faith to preserve competition and neutralize competitive risks.

Regarding the procedures for prior analysis of collaborations, CADE provides the following means: (a) communication channel with CADE’s General Superintendence – SG (superintendencia@cade.gov.br), to obtain a preliminary statement on the existence or no evidence of anti-competitive conduct; (b) petition, to obtain written and non-binding pronouncements from SG and CADE’s Tribunal, which may determine the filing of the file, the opening of an investigation or the adoption of measures and requisition of information necessary for the monitoring of the activities announced among agents; and (c) consultation, which must follow the requirements of Resolution No. 12/2015, to obtain a binding pronouncement from the CADE’s Tribunal.

CADE points out that the information note is merely instructive and aims to promote transparency and legal certainty to support temporary collaborations between companies. The document does not admit the misrepresentation of guidelines for the implementation of anti-competitive agreements between competitors or facilitating the exchange of competitively sensitive information. The economic agents will continue to be responsible for the evaluation of their strategies and any indications of practices that are harmful to competitions may give rise to the opening of investigations by the authority.

For more information, click on the link.

O conteúdo Cade releases temporary information note on collaboration between competitors to face the Covid-19 outbreak aparece primeiro em Grinberg Cordovil Advogados.

Ravagnani is a tax attorney and was the deputy chief of economic policy to the president’s chief of staff. With his appointment formally published yesterday on the Official Gazette, he immediately took office in substitution to former commissioner Paulo Burnier.

More importantly, the appointment of the new commissioner reestablishes the minimum quorum of the Tribunal. Therefore, administrative deadlines, suspended in July due to lack of members in the Tribunal, will be resumed as of this Tuesday (October 8^th) and the trial session scheduled for October 16^th is confirmed.

O conteúdo New Commissioner and resumption of CADE’s terms aparece primeiro em Grinberg Cordovil Advogados.

The nominees were approved by the majority of the Committee; now they will proceed to Senate’s approval, which later shall be followed by the President’s appointment.

Besides, the reappointments of General Superintendent Alexandre Cordeiro and Chief Attorney Walter Agra will be submitted to Senate’s Economic Affairs Committee scrutiny on October 1^st.

O conteúdo CADE’s new Commissioners aparece primeiro em Grinberg Cordovil Advogados.

In summary, the Law can be analyzed on a basis of three general aspects. The first gives primacy to freedom of labor, initiative, and competition by providing minimal and exceptional state intervention over economic activities. The second provides guidelines on the economic rights of individuals and corporations with a focus on economic growth and development. In this topic, the presumption of good faith of the individual stands out and the right to innovate without the need for authorization of economic activity, in which startups will benefit the most through the digitization of public documents and the guarantee of reasonable time of administrative processes, with a special concern of the processes responsible for releasing the exercision of business activities. Lastly, the norm creates the figure of abuse of regulatory power, which intends to suppress the diversion of function, which will need practical confrontation to know itself, or better said, its implications on the performance of organs, such as the Administrative Council for Economic Defense – Cade.

On one hand, experts recognize the noble character of a Law that aims to promote the liberal flag and reinforce the idea that the state should only intervene in the economy, when extremely necessary, to avoid obstacles to entrepreneurship through excessive regulation. On the other hand, there is some skepticism about what the factual developments of the Law will be given that the content of its text does not innovate the statement of principles and economic rights already provided by the Federal Constitution. The question that remains is how the Law can be effective, if reality demonstrates that the Brazilian state suffers from structural problems when constitutional commandments are followed.

O conteúdo Interface between the Economic Freedom Law and Competition Law aparece primeiro em Grinberg Cordovil Advogados.

The guide is divided into four chapters and presents fundamental concepts about the persecution of cartels, describing the factors that can stimulate the formation of cartelist groups, such as administrative, criminal and civil responsibilities, the limits of action of State and Federal Prosecutors, besides the attributions of the Administrative Council for Economic Defense (Cade), as well as the damage caused to the society.

The guidelines have a practical bias and points out suggestions of action and frequent considerations in the establishment of Public Legal Investigation, in order to resolve issues related to the topic.  Some relevant Cade decisions are presented for illustration purposes to assist in the decision-making process of MPF members to ensure the principles, such as free competition, consumer protection, and freedom of initiative, are governing the national economy.

The strengthening of the policy to combat cartelist practices is increasing at a very high rate by the national authorities. In 2016, Cade and MPF/SP signed a memorandum of understanding to strengthen the coordinated action of the institutions in the negotiation of leniency agreements and termination of commitment terms, aiming to provide greater security and transparency to companies and individuals interested in collaborating with the authorities, in exchange for administrative and criminal administrative benefits, in clear reinforcement of anti-cartel investigations. In 2019, a similar memorandum of understanding was signed with the Public Prosecution Ministry of the State of São Paulo.

MPF’s “Guidelines: Fighting Cartels” can be accessed here.

O conteúdo Public Federal Ministry launches guidelines to fighting cartels aparece primeiro em Grinberg Cordovil Advogados.

A Cartel is considered the most serious violation against the economic order, being administratively punished by the Competition Law (Law No. 12.529/2011) and criminally by the Crimes against Economic Order Law (Law No. 8.137/1990). For the punishment of this offense, administrative and criminal authorities employ collaborative agreements.

The leniency agreement is signed with the first offender interested in collaborating with CADE; this grants administrative and criminal immunities to its signatories, establishing an interaction between the two authorities for its conclusion. The settlement is the tool available to other offenders interested in negotiating with CADE, and the plea bargain is the complementary form used by the Public Prosecutor to pursue cartels.

The Memorandum will maintain the autonomy of each authority, but it intends to organize these experiences in collaborative instruments. In this regard, the following points should be highlighted: (i) CADE and MPSP may exchange information about ongoing agreements, provided that the individual or legal entity agree; (ii) the individual or legal entity that formalizes the Settlement Agreement may cause the MPSP to initiate negotiations for direct and indirect cartel-related crimes, and vice versa; then finally, (iii) frustrated negotiations will not imply confession or acknowledgment of unlawfulness, barring the authorities from using the information and evidence provided by the employees for any purpose.

Therefore, despite the desired coordination by the institutions, the rules and procedures for the conclusion of settlement and plea bargaining remain unchanged and autonomously governed.

O conteúdo CADE and the Public Prosecution of São Paulo signed a Memorandum of Understanding aparece primeiro em Grinberg Cordovil Advogados.