BRAZIL Law and Practice Contributed by: Ricardo Barretto Ferreira da Silva and Camila Sabino Del Sasso, Azevedo Sette Advogados
6.3 Cartels The rules governing anti-competitive practices are established in the Law No 12,529/2011, which prohibits a series of behaviours that have the purpose or effect of restricting, distorting, or in any way harming free competition or free enterprise. The main ones include: • cartel – agreement between competitors to fix prices, limit production, divide markets or customers; • predatory actions – artificially reducing prices to eliminate competitors and then raising prices; • resale price fixing (imposing minimum prices on distributors or retailers); • tying – making the sale of one product or ser - vice conditional on the purchase of another; • abuse of dominant position – use of market power to eliminate competition, hinder the entry of new players, or impose abusive com - mercial conditions; and • unjustified refusal to contract – when used to exclude competitors from the market. CADE can investigate, prosecute and sanc - tion anti-competitive conducts, applying fines that can reach 20% of the offending company’s gross revenue. The law also allows for leniency agreements, which benefit companies or indi - viduals who collaborate with cartel investiga - tions in exchange for a reduction or exemption from penalties. 6.4 Abuse of Dominant Position Law No 12,529/2011 prohibits unilateral conduct that constitutes abuse of a dominant position, which is defined as the ability of a company or group of companies to control the relevant mar - ket for goods or services, restricting competi - tion.
applies to operations involving mergers between companies, the acquisition of control or a rele - vant shareholding, or even the setting-up of joint ventures and consortia with permanent effects on the market. Notification is required when, in the year prior to the operation, at least one of the parties to the transaction had annual gross revenues of BRL750 million or more in Brazil and the other party had revenues of BRL75 million or more (also in the national territory). There is currently no specific criterion based on market share for mandatory notification – although this factor is considered when analysing the operation. Transactions must be notified before they are concluded and consummation without approval may result in a fine and eventual annulment of the transaction. The main objective is to prevent excessive market concentration and guarantee free competition. 6.2 Merger Control Procedure The process of notifying M&A in Brazil to CADE follows well-defined stages. First, companies must file the notification before the transaction is concluded, submitting the required docu - ments and information. CADE then carries out an admissibility analysis, within five working days, to check whether the documentation is complete. After this screening, the merits analy - sis begins, which can follow either the summary procedure (with a deadline of up to 30 calendar days) for simple operations with low competitive risk or the ordinary procedure (with a legal dead - line of up to 240 days, extendable for another 90 days) for more complex operations. If necessary, the case is referred to the CADE Court, which can approve, approve with restrictions, or dis - approve the transaction. Finally, the decision is published, formalising the result of the analysis.
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