O conteúdo CADE regulates the sharing of Technical Notes with Public Prosecutors aparece primeiro em Grinberg Cordovil Advogados.

The practice discussed at the 195^th SOJ was an alleged cartel, in which some of the defendants did not have a managerial position in their respective companies. Some of these individuals even signed a Cease-and-Desist Agreement with Cade (TCC).

The Reporting Commissioner, Lenisa Prado, understood that individuals, who did not participate in the management of the companies, did not have the power to commit them to be part of anticompetitive agreements. Without authority to make decisions regarding prices and market division, these individuals would not have the possibility to commit an antitrust violation. In her view, this condition should also be extended to individuals who concluded TCCs with CADE, and the administrative proceeding should be dismissed with regard to them, due to the lack of decision-making powers, rather than the compliance with the agreement (as usually occurs).

Commissioner Sérgio Ravagnani highlighted that there were defendants in the administrative proceeding, who acted under orders of hierarchical superiors, which should remove their liability. In his view, Law 12,529/2011 established a regime, in which there is: (i) objective liability of a legal entity (art. 37, I, of Law 12,529/2011); (ii) as well as objective liability of an individual, who constitutes him or herself as an autonomous decision-making center (art. 37, II, of Law 12,529/2011); and (iii) subjective liability of the administrator (art. 37, III, of Law 12,529/2011). Thus, non-administrator individuals would only be liable in cases, in which the person is an autonomous center of decisions, without hierarchical relations or subordination to another person. Nevertheless, regarding individuals that entered into agreements, Commissioner Sérgio Ravagnani understood that the case should be dismissed, due to the compliance with the respective agreements (regardless of the absence of decision-making powers).

In contrast, Commissioner Luiz Hoffmann understood that it is not possible to rule out the liability of non-administrator individuals, if they commit an antitrust violation. In addition to this, non-administrator individuals, such as business managers, coordinators, and sales representatives, are often responsible for implementing and operationalizing cartels. Considering the seriousness of the practice, which is also considered a crime, it would not be possible to assume that an employee of the sales team was not aware of the unlawfulness of his acts.

This last position was adopted by the majority of CADE’s Tribunal, who condemned the non-administrator individuals, even if they did not have decision powers, and dismissed the case against non-administrator individuals, who entered TCCs and leniency agreements, since they complied with their respective agreements (regardless of not having decision-making powers).

[1] Administrative Proceeding no. 08700.003396/2016-37.

O conteúdo CADE discusses the liability of non-administrator individuals aparece primeiro em Grinberg Cordovil Advogados.

The inquiry was opened after a complaint was made by TotalPass, who denounced contractual conditions that were potentially restricting competition, such as exclusivity clauses and most favored nation clauses. In the complaint, TotalPass pled for a preliminary injunction to be adopted by the GS/CADE, so that Gympass would be required to cease those practices. Although the measure was granted – it determined that the most favored nation clauses should be suspended, for example –  the GS/CADE did not grant TotalPass’s plea regarding the exclusivity clauses. With regard to this practice, the GS/CADE only prohibited Gympass from entering into exclusive agreements with gyms that were not yet members of its network. In other words, the effectiveness of the existing clauses was maintained.

TotalPass then filed a Voluntary Appeal, pleading for the reversal of the GS/CADE’s decision regarding the exclusivity clauses of Gympass’s contracts. According to TotalPass, the current level of market foreclosure caused by Gympass is approximately 80%. Therefore, the maintenance of exclusivity clauses in effect would bring harm to gyms, the users of the aggregation platforms, and Gympass’s competitors.

Although the President of Cade, Alexandre Cordeiro Macedo, requested that the trial be suspended to further review the case before deciding, CADE’s Tribunal has already formed a majority to reform the GS/CADE’s decision.

The vote that led to the majority decision was issued by Commissioner Paula Azevedo, who argued the following points: (i) there is market power, since Gympass’s exclusivity clauses covered about 70 to 80% of all gyms in Brazil; (ii) the practice in question prevents rivals from competing; and (iii) the justifications of the exclusivity clause – linked to the prohibition of free riding effects on the investments made by Gympass in final customers and accredited partners – have not been proven, since the clause does not even specify which is the transaction-specific investment to be protected.

Moreover, the fact that it is a two-sided platform reinforces the competitive problems found, in the Commissioner’s view, since the platform becomes dominant on both sides from the moment it reaches critical mass, and there are also indirect network effects arising from it.

For all the forementioned reasons, CADE’s Tribunal decided to grant the voluntary appeal to overturn the GS/CADE’s decision and, among other things, to immediately suspend the exclusivity agreements. To address the need of inhibiting potential free riding effects, the adoption of exclusivity clauses is allowed, provided that Gympass shows proof of investing in the gyms’ capital assets or infrastructure and that the clause duration is limited to the return time of the investment.

The public versions of the votes issued have not yet been made available.

O conteúdo CADE reassesses the legality of exclusivity clauses and reviews a preliminary injunction applied in the aggregation platforms market for gyms aparece primeiro em Grinberg Cordovil Advogados.

The marker request is the act through which the proponent of the leniency agreement contacts the SG/CADE to formalize their interest and plead a declaration that preliminarily qualifies them to negotiate the benefits of the leniency agreement in exchange for identifying the others involved in the infringement and for providing the information and documents that prove the anti-competitive conduct.

CADE Ordinance no. 416 establishes the general rules for Clique Leniência, an electronic system developed to process electronic marker requests. It will operate continuously, issuing electronic receipts with a record of the exact moment of the request.

This automation of registry is extremely important given that leniency agreements can only be negotiated and entered into with the first company to qualify for an agreement concerning an infringement that has been reported or that is under investigation.

Therefore, the SG/CADE may make an electronic file available, in response to the marker requests presented through the system, containing: (i) the term marker, if the interested party was the first to propose a leniency agreement regarding that infraction, (ii) the term marker unavailability, when the violation is already being investigated in another administrative proceeding, or (iii) waiting list certificate, when a violation has already been reported by a third party with whom the SG/CADE negotiates a leniency agreement. In this case, the proponent may continue on the waiting list, so that a negotiation be conducted, if the negotiations with the other proponents do not work out.

The Ordinance came into force on September 15, 2021, and it will take effect as of October 1, 2021.

O conteúdo CADE regulates the receipt and processing of marker requests for the negotiation of leniency agreements by electronic means aparece primeiro em Grinberg Cordovil Advogados.