BRAZIL Law and Practice Contributed by: Débora Yanasse, Bruno Salzano, Luisa Tortolano Barreto and Julia Braga, Tauil & Chequer Advogados in association with Mayer Brown
2.4 Market Concentration Limits Law No 12,529/2011, also known as the “Com- petition Law”, provided for an institutional reorganisation of the Brazilian System for the Defence of Competition. Under this law, the Administrative Council for Economic Defence ( Conselho Administrativo de Defesa Econômica or CADE), an independent agency reporting to the Ministry of Justice, is the authority with juris- diction over the national territory responsible for investigating and ultimately deciding on compe- tition issues. Pursuant to the Competition Law, concentration acts (amalgamations, mergers, share or asset acquisitions, associations, consortiums, or joint ventures) must be submitted for CADE’s prior approval if one of the groups involved in the transaction has an annual gross revenue equal to or greater than BRL750 million and the other group involved in the transaction has an annual gross revenue equal to or greater than BRL75 million. The electricity market is divided, according to the case law of CADE, into four distinct relevant markets: • generation; • transmission; • distribution; and • trading. There are no concentration limits regarding percentage of market share in these segments of the power industry. In general terms, CADE understands that there is “competition by the market” in the power transmission and distribu- tion segments, where concessions are granted after a public bidding procedure with the partici- pation of Brazilian and foreign bidders.
2.5 Surveillance to Detect Anti- Competitive Behaviour
As mentioned in 2.4 Market Concentration Lim- its , CADE is the authority with jurisdiction over national territory responsible for investigating and ultimately deciding on competition issues. ANEEL supports CADE’s activities by analys- ing concentration acts and behaviours violating competition laws by power companies, pursuant to ANEEL’s Normative Resolution No 948/2021. In the event of violation of competition laws, CADE may impose fines for an amount equiva- lent to 0.1% to 20% of the company’s or group’s gross revenues, as well as other penalties, such as: • prohibition from entering into contracts with official financial institutions and participating in public tenders for a five-year period; • denial of payment by instalment of federal taxes and cancellation of tax incentives or public subsidies; and • the transfer of corporate control, sale of assets or partial suspension of activities. Furthermore, companies may be subject to prosecution in the civil sphere and individuals in the criminal sphere.
3. Generation Facilities 3.1 Constructing and Operating Generation Facilities
Pursuant to Law No 9,074/1995 and the Conces- sion Renewal Law, the construction and opera- tion rights of power generation facilities may be granted through concessions or authorisations by the MME or ANEEL, depending on the source and size of the power plant. Both concessions and authorisations grant the concessionaire or
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