Cade analyse minimum advertised price

In Cade´s trial session held on October 16 2018, an enquiry about the lawfulness of a minimum advertised price policy was analyzed by the Court. This policy was to be implemented by a company in the sector of tires in regards to its retailers. By a majority, the Court ruled in favor of the policy´s lawfulness.

This analysis was subject to three stages, namely: (1) existence of market power; (2) examination of potential negative effects, such as creating barriers to entry, and (3) evaluation of efficiencies. However, Cade’s assessment ceased in the first stage: it was verified that the consultant lacked market power. The Tribunal pointed out that, an increase in market share may result in the policy’s review by Cade.

On the other hand, Commissioner Cristiane Alkmin considered the policy illegal. In her opinion, the policy should be compared to price-fixing, because any binding /imposed price list is illegal and should be prohibited, since this is in violation of competition law and freedom of choice. This argument was rebuked by other Commissioners, whom indicated that precedents on price-fixing analyzed by Cade refer to horizontal conducts (therefore, different from this case which was a vertical relationship).

It is worth highlighting, from Commissioner Cristiane’s vote, that there was mention of Cade’s difficulty to monitor and investigate the advertised price policy, especially in electronic commerce.