Cade files Uber lawsuit against taxi drivers and class entities

On July 4, 2018, CADE’s Tribunal unanimously dismissed Uber’s complaint against taxi drivers and related class entities or associations, around Brazil. The administrative proceeding started in 2015, after a complaint made by Uber and two Brazilian student bodies, Diretório Central dos Estudantes do Centro Universitário de Brasília (DCE-UniCEUB) and Diretório Central dos Estudantes Honestino Guimarães (DCE-UnB). According to these student bodies, taxi drivers had abused their right to petition, a practice known as sham litigation, by bringing repeated and ungrounded lawsuits and administrative proceedings for preventing Uber app from operating in the market of individual private paid transportation of passengers. Allegedly, the defendants had, in a coordinated manner, also used violence and made serious threats against Uber drivers.

In his vote, the Reporting Commissioner, Mauricio Bandeira Maia, reaffirmed the possibility of an antitrust analysis on this issue. That is, he deemed Transportation Network Companies – TNC, such as Uber, to be legitimate market agents for antitrust purposes.

Despite this possibility, he concluded that there was not sufficient evidence to confirm the existence of sham litigation. At the time the investigated conducts took place, the services provided by the TNC were unregulated; Uber being the first operating TNC. Considering that there was a plausible doubt as to its lawfulness and the taxi drivers alleging to be harmed by the entry of this new service, there could be no sham litigation.

As to the accusation of use of violence and serious threats, the Reporting Commissioner, followed by the Tribunal, also voted to close the case. Although he concluded that the elements in the files were reasonable to presume anticompetitive harm and a possible liability of the related class entities, considering their influence and omission, there was not sufficient evidence to rule otherwise. For this, a single news report could not be per se evidence. This would not be the case if many events had been repeatedly promoted by the class entity, with negative impacts to competition.