Brazil's Competition Agency Expands Scrutiny Of Exclusivity Clauses And Mergers

Published date06 May 2022
Subject Matterorporate/Commercial Law, Anti-trust/Competition Law, M&A/Private Equity, Corporate and Company Law, Antitrust, EU Competition
Law FirmAlly Law
AuthorAlly Law

Since early 2022, Brazil's Administrative Council for Economic Defense (Conselho Administrativo de Defesa Econ'mica, or CADE) has increasingly raised concerns over the potential anticompetitive effects of exclusive dealing arrangements and exclusivity clauses in unilateral conduct investigations and merger cases.

On the other hand, CADE has reaffirmed its understanding that exclusivity clauses are not illegal, per se, and has noted that the assessment of such clauses' potential anticompetitive effects must take into consideration the legitimate economic rationale for the exclusivity.

Unilateral conduct investigations

The opening of unilateral conduct investigations involving exclusivity clauses has been on the rise. The latest one, begun in March 2022, involves an investigation against Ambev following complaints from Heineken. Heineken alleges that Ambev's exclusive dealings with strategic and premium point of sale (POS) have anticompetitive effects.

In February 2022, in the context of an investigation of alleged abuse of dominant position in the market for corporate wellness platforms, CADE's tribunal ordered the platform Gympass to suspend exclusivity clauses imposed against fitness companies registered within its platform. The Tribunal argued that most such exclusivity clauses lack economic rationality. CADE also ruled that exclusive dealings with gyms that received direct investments from Gympass could exceptionally be preserved due to the economic reasonableness in ensuring return on investment.

Merger cases

In merger cases, CADE's attention to exclusivity clauses has resulted in comprehensive assessments of their rationale and resulted in...

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