Brazilian Competition Policy In Global Context: Achievements And Challenges

Keywords: competition, antitrust, mergers, Administrative Council for Economic Defence, CADE, Brazilian System for Economic Defence, SBDC,

Enforcement of antitrust law in Brazil has continued its trend toward consolidation and evolution.1 Brazil's economic growth has resulted in more complex transactions being submitted to merger control, as well as more complex and veiled antitrust investigations. In turn, this has increased the visibility and relevance of the Brazilian System for Economic Defence (SBDC) and, especially, of the Administrative Council for Economic Defence (CADE), the country's main antitrust agency.2

According to CADE's 2012 Annual Report, CADE has increased the number of its technical staff, and given them more responsibility, resulting in a rise in the number of cases analyzed per year: from 666 in 2005 to 955 in 2012, out of which 825 were merger filings notified under the old regime and 102 merger filings submitted under the new regime. In the first half of 2013, 82 new proceedings were filed, 158 were ruled on (out of which 59 were merger filings) and only 219 remain under analysis.

In addition to the staff increase, the reformulation and the enhancement of cooperation within the SBDC (i.e., the Secretariat of Economic Monitoring— SEAE, the Secretariat of Economic Law—SDE, CADE's Attorney General Office, and Federal Public Prosecution Office and CADE) eliminated overlapping activities and significantly reduced the average analysis period of merger filings—from 252 days in 2005 to 48 days (ordinary procedure) and 19 days (summary procedure), both in 2012.

The depth and strength of the decisions can also be regarded as an achievement. For example, since the New Brazilian Antitrust Law (Law No. 12529/2011) came into effect, CADE has been keeping an eye on healthcare markets. This has resulted in significant restrictions being imposed in some transaction involving the acquisition of hospitals in several Brazilian cities, including Rede D'Or and Medgrupo Participações S.A., the veto of the acquisition of Hospital Regional de Franca by Unimed and the acquisition of Aliança by Qualicorp in the healthcare insurance sector.

Additionally, in May 2012, CADE authorized the assets swap between Brasil Foods (BRF) and Marfrig Alimentos S.A., in compliance with heavy commitments of selling assets assumed by BRF involving approximately 35 percent of the parties' production capacity in Brazil comprising production facilities, distribution centers and an important portfolio of products and brands.3 Also, the authority cleared the transaction between the airline companies LAN and TAM, subject to the swap with a competitor of some slots and infrastructure in the São Paulo International Airport and to the exit of one of the worldwide airline company's alliances (One World or StarAlliance).4

In the steel sector, CADE granted an injunction to prevent completion of the acquisition by the Brazilian Companhia Siderúrgica Nacional (CSN) of additional stakes in its competitor, Usinas Siderúgicas de Minas Gerais S.A...