Cartels 2023 Comparisons

The main statutory basis for challenging cartel behaviour and its effects in Brazil are defined by Federal Law No 12,529/2011, the Brazilian Competition Law. Cartel behaviour is also considered as a crime under Law No 8,137/90 (regarding crimes against the economic order) and Federal Decree-Law No 2.848 of 1940 (the Brazilian Criminal Code). 

Other legislation may apply, especially in the context of bid rigging, including Law No 8,666/93 (which provides rules about public bids and contracts with government authorities in Brazil and will be replaced by Law No 14,133/2021), Law No 12,846/2013 (the Anticorruption Law) and Law No 8,429/92 (the Public Improbity Law). 

Cartel effects are subject to damages claims by those customers allegedly harmed by the conduct of the cartel, based on the provisions of Federal Law No 10.406 of 2002 (the Brazilian Civil Code) and Federal Law No 8.078 of 1990 (the Consumer Protection Code).

The Competition Agency

The Brazilian competition agency is the Administrative Council for Economic Defence (Conselho Administrativo de Defesa Econômica or CADE), an independent agency created by Law No 4,137/62 that reports to the Ministry of Justice. CADE has jurisdiction over the national territory to investigate and decide, ultimately, on competition issues (ie, mergers and antitrust violations), and is responsible for fostering and promoting the culture of competition in Brazil.

CADE’s structure comprises an Administrative Tribunal, a General Superintendence and a Department of Economic Studies. The Administrative Tribunal is composed of six commissioners and one president, either lawyers or economists, who are in charge of ultimately deciding antitrust investigations and certain merger filings. The General Superintendence is responsible for investigating and instructing proceedings, in order to rebuke cartel activity and unilateral conduct, as well as the analysis of mergers. The Department of Economic Studies is responsible for improving economic analyses of the effects of CADE’s decisions in the market.

Criminal Matters

Since being part of a cartel is also considered to be a crime, individuals may also be subject to criminal liability. In this case, investigations are initiated by the police department or the Public Prosecutor’s Office, and penalties (which include fines and imprisonment) are imposed by the Brazilian criminal courts.

Civil Courts’ Jurisdiction

In the civil arena, the Brazilian courts are entitled to:

• grant warrants authorising dawn raids or enforcing CADE’s decisions;
• decide whether to review CADE’s decisions;
• confirm judicial settlements in lawsuits related to competition matters;
• decide on competition matters that are not analysed by CADE; and
• decide on damages claims based on antitrust investigations ruled by CADE.

Compensation

Federal Law No 14,470/2022 was enacted last year. It introduced important changes to the Brazilian Antitrust Law, granting victims of anticompetitive practices the right to receive double compensation for damages suffered, except against signatories of leniency agreements or cease-and-desist settlement agreements. In that case, several/joint liability is not applicable, and victims are only entitled to basic compensation for damages. The law also changed the burden of proof regarding overpricing derived from cartel investigations. The previous regime provided for the assumption that overpricing would be passed on to consumers, while the new legislation sets forth that such assumption must be demonstrated by the party that raises the argument.

The Brazilian constitution provides that “the law shall not exclude any injury or threat to a right from review by the judiciary” (Article 5, item XXXV), which guarantees that any company or individual may ask the Brazilian courts for a judicial decision on competition matters. Nonetheless, private right of action before the Brazilian courts is limited to cartel effects (claims for damages). See 5.1 Private Right of Action for further information about private enforcement and 1.2 Public Enforcement Agencies and Scope of Liabilities, Penalties and Awards for significant recent changes in this area.

Cartel behaviour is challenged by CADE, ex officio or based on a complaint submitted by any entity or individual to the General Superintendence. The initiation of a formal investigation by the General Superintendence depends on the details and supporting documents evidencing the accusations made in the complaint. In other words, complaints that do not contain a detailed description of the alleged misconduct and are not accompanied by information and supporting documents evidencing the allegations and their possible anti-competitive effect, are likely to be dismissed by CADE. CADE also has a whistle-blowing channel by means of which any company or individual can make a complaint about anti-competitive practices.

There is no private right of action in the criminal arena, as only the Public Prosecutor’s Office is entitled to challenge cartel behaviour in the criminal courts. 

Cartel conduct is defined by CADE in the FAQ section on its website as “any agreement or concerted practice between competitors to fix prices, divide markets, establish quotas or restrict production, adopt pre-arranged positions in public bidding, or which has as its object any competitively sensitive variable”. 

CADE considers that cartels fall within the scope of Law No 12,529/2011, Article 36, paragraph 3, item I, which provides the following: “§ 3 The following acts, among others, to the extent to which they conform to the principles set forth in the caput of this article and its clauses, shall characterise violations of the economic order: I – to agree, join, manipulate or adjust with competitors, in any way: a) the prices of goods or services individually offered; b) the production or sale of a restricted or limited amount of goods or the provision of a limited or restricted number, volume or frequency of services; c) the division of parts or segments of a potential or current market of goods or services by means of, among others, the allocation of customers, suppliers, regions or time periods; d) prices, conditions, privileges or refusal to participate in public bidding”.

With respect to the exchange of competitively sensitive information (such as pricing or production data, commercial strategies, revenue projections, etc), this can be considered as part of a cartel arrangement (thus, an antitrust violation) if the information exchange occurs with the purpose of co-ordinating behaviour among competitors. However, there are cases in which information exchange can be analysed as autonomous conduct, subject to different methodology by CADE.

Not every agreement or joint action between competitors constitutes the practice of a cartel. CADE’s case law and guidelines acknowledge the efficiencies derived from co-operation agreements, joint ventures, joint development agreements, as well as discussions for benchmarking purposes, or discussions in the context of industry conferences and trade associations. 

There are no industries, sectors or other activities that are exempt from scrutiny under statutes or precedents in Brazil.

The Brazilian Antitrust Law provides a statute of limitations of five years to investigate antitrust violations. However, because cartel conduct is also considered as a crime in Brazil, Law No 12,529/2011 sets forth that the statute of limitations applicable to cartel investigations shall be governed by the period provided for in criminal law. In the case of cartel practices, criminal legislation provides for a statute of limitations of 12 years. The period is counted from the date of the illegal act, or in the case of a permanent or continuous violation (such as cartel activity), from the day the illegal act ceased.

The jurisdiction of CADE and the judicial courts over alleged cartel participants is the Brazilian territory. Misconduct that occurs in foreign jurisdictions can be investigated in Brazil if it generates effects in the country. According to CADE’s decisional practice about the effects doctrine, CADE’s jurisdiction to investigate international cartels is triggered (i) if the final products or inputs that constitute essential facilities of goods subject to the alleged cartel are commercialised in Brazil (eg, by exports or imports); or (ii) if the Brazilian territory is part of the scope of the cartel activity, even if there are no sales in the country. 

There is no principle of comity specifically applicable to cartel enforcement in Brazil. Brazilian legislation provides the possibility of enforcement of foreign decisions if the foreign decision is totally or partially ratified by the Brazilian Superior Court of Justice. The overall requirements to obtain such a ratification are:

• the decision must have been rendered by the authority with jurisdiction on the matter;
• the decision has become res judicata; and
• the parties must have been served about the decision.

The request for ratification will then be subject to defence by the parties and will be ruled by the President of the Superior Court of Justice.

Once the foreign decision is ratified, the decision is enforced before the Brazilian federal lower courts.

There are no cases in Brazil involving decisions rendered by foreign authorities ratified under such a procedure. Nonetheless, the Superior Court of Justice has already analysed a request made in 2022 by the High Court of Justice, Business and Property Courts of England and Wales, to serve the Brazilian companies Louis Dreyfus, Cargill Agrícola and Citrosuco S/A in the context of a damages lawsuit ongoing abroad regarding CADE’s conviction decision rendered against those companies in a cartel investigation involving orange juice producers in Brazil.

Law No 14,010/2020 was enacted to regulate the emergency and transitional legal regime for private law relations during the COVID-19 pandemic period. Among its provisions, the legislation set forth the temporary suspension of the effectiveness of the following acts, performed between 20 March and 30 October 2020:

• submission to CADE’s approval of merger transactions involving two or more companies, for the purpose of creating an associative contract, consortium, or joint venture;
• investigations of product sales below the market price; and
• investigations of partial or full interruption of companies’ activities. 

CADE also issued a “Temporary Informative Note on Collaboration between Companies to Address the Covid-19 Crisis” in July 2020, aimed at establishing general guidelines for collaboration among players that could mitigate the effects of the pandemic, in light of recommendations made by the OECD in that regard (co-operation between competitors in the time of COVID-19, 2020). In that context, CADE analysed a co-operation agreement submitted by the food and beverages companies Ambev SA, BRF SA, Coca-Cola Indústrias Ltda, Mondelez Brasil Ltda, Nestlé Brasil Ltda, and Pepsico do Brasil Ltda, which aimed at the recovery of small retailers in the industry. Although the arrangement was notified to CADE, the authority concluded that the co-operation was not subject to mandatory filing to merger control and that there was no evidence indicating any anti-competitive conduct, since:

• the co-operation was during a time of emergency, with the objective of mitigating the effects of the crisis, generating well-being for consumers;
• a time limitation was defined, as the agreement was expected to be in force until 31 October 2020, and any extension had to be reported in advance to CADE;
• there was no exchange of competitively sensitive information between the parties; and
• each company maintained its business strategies independently.

Furthermore, CADE initiated an antitrust investigation about supposedly illegal price and profit increases by companies that offered healthcare products related to the treatment of COVID-19 (including masks, alcohol and certain drugs). After a few months, the investigation was dismissed due to a lack of evidence of anti-competitive conduct. 

With respect to trends in competition policy, changes in consumer behaviour related to the increase of online shopping have attracted greater attention from the antitrust community to discuss regulation and competition aspects affecting digital markets in Brazil.

With regard to other aspects affecting competition, Law No 13,979/2020 established measures to tackle the public health emergency caused by the COVID-19 pandemic. One of the measures imposed was the waiver of public procurement procedures for the acquisition or hiring of goods, services and inputs aimed at combating the pandemic. The measure attracted the concern of antitrust experts as it could lead to a direct contracting process that mitigates competition among participants, enabling antitrust practices such as price gouging.

Finally, the National Health Insurance Agency determined the suspension of health insurance price adjustments, due to cost variation and age-group changes between September and December 2020. Later, the agency determined that the suspended adjustment prices would be charged in a diluted manner over 12 months. CADE highlighted at that time the risk arising from price regulation based on maximum limits, as it would facilitate possible co-ordination among competitors to form a cartel.

Currently, CADE’s Tribunal is composed of its president and six commissioners, with a term of office of four years. In 2023, the term of office of four of the commissioners will expire and it is expected that four new commissioners will be assigned by the president of Brazil. 

One of the departing commissioners has raised relevant discussions about the nullity of leniency agreements and, with another departing commissioner, has developed new arguments concerning the standard of proof for cartel conviction by CADE applicable to individuals. Those discussions point to relevant and recent changes in CADE’s understanding and decisional practice that are far from consolidated. Therefore, the end of these commissioners’ term of office may create uncertainty about how the upcoming commissioners will deal with previous relevant discussions concerning cartel enforcement in Brazil.

In addition, Draft Bills No 4,323/2019 and 156/2020 propose changes in the criteria for appointing commissioners at CADE, as well as a minimum quorum for voting during the ruling sessions. These bills are under analysis by the House of Representatives and pending approval by the Brazilian Senate. 

Currently, economists and lawyers over 30 years old with a positive reputation and legal knowledge are eligible to be assigned as CADE commissioners. The bills propose the following eligibility criteria: (i) an educational background compatible with the position to be assumed; and cumulatively (ii) previous professional experience of at least ten years in competition law; or four years in executive management, a position of trust, or academic activities in competition law. The eligible persons will be submitted for approval under a triple list, which will be formed under a public selection proceeding. The bill also sets forth the possibility of deputy commissioners being assigned to prevent vacancies and lack of a minimum quorum to maintain the periodic agenda for ruling sessions.

Many industries have been under CADE’s spotlight in recent years. Accordingly, CADE has condensed its understanding of cases under specific handbooks dedicated to some of those industries, including:

• digital platforms (2021);
• health insurance, hospitals and diagnosis labs (2021 and 2022);
• steel (2022);
• liquid oil fuel distribution and retail (2022);
• mining; and
• telecommunications. 

Once a complaint or whistle-blowing report is received, CADE may initiate a preliminary proceeding to confirm if the accusations refer to matters under CADE’s jurisdiction. 

As a second step, an administrative inquiry may be opened, to collect further evidence to confirm the verity and likelihood of the facts reported.

The preliminary steps mentioned above are not mandatory. If CADE considers that the complaint contains sufficient evidence to initiate an antitrust investigation, the usual investigatory steps are as follows:

• The General Superintendence issues a technical note, specifying the facts under investigation, and notifies the defendants to present a defence within 30 days.
• Access to the case records is granted to the defendants and their representatives, directors, managers or attorneys.
• Defendants who do not present a defence within the legal period, after having been notified, will be judged by default, ie, as if the facts stated against them in the complaint were presumably true.
• At the moment of the deadline for the presentation of the defence, the General Superintendence will request that the defendants submit their interest in diligences and produce evidence of any kind, including information, clarifications or documents from other defendants and government authorities, as well as witnesses’ testimony.
• Upon completion of the discovery stage, the defendants are summoned to present closing arguments. After this stage, the General Superintendence issues a non-binding opinion for the dismissal of the investigation or the conviction of the defendants for antitrust violation, and refers the case records to CADE’s Tribunal for a final ruling.

Dawns raids are a commonly adopted mechanism for cartel enforcement in Brazil provided in Article 13 of the Brazilian Competition Law, as an additional means to obtain evidence of conduct and the participants in such conduct.

Prior to the Raid

Dawn raids are usually carried out by CADE jointly with the Brazilian police and representatives of the Public Prosecutor’s Office. They depend on a prior judicial order that is requested by CADE’s Attorney General’s Office from a federal court and based on the understanding of CADE’s General Superintendence on the need for and interest in such a measure for the investigation. A warrant is then granted, defining the scope of the search – that is, the types of documents and material to be seized (eg, computers, printed documents, smartphones, hard drives, notebooks/agendas, etc, related to a certain subject) – and the companies targeted by the operation.

During the Raid

It is very important that the government authorities are received and accompanied by a company representative/employee and the company attorney to ensure that the seized documents and materials do not exceed the scope of the warrant and that the company does not obstruct the work carried out by the authorities (eg, by means of spoliation of documents and information).

After the Raid

After the dawn raid, the seized material is copied (only server data is copied locally), returned to the company and selected according to its relevance and connection with the investigation. Only after such a selection can the authorities require employees to answer questions, be interviewed or be heard as a witness in the context of the investigation. Such inquiry should not occur during the dawn raid.

CADE has an internal proceedings manual that describes in detail the proceedings adopted by the authority prior to and after dawn raids.

Statistics

The number of dawn raids has been reduced in recent years. The first dawn raid carried out by CADE was in 2003. After that, the number of dawn raids increased and exceeded 57 dawn raids only in 2008. This number shrank in the following years, to six in total between 2009 and 2011. Such a trend for lower numbers was maintained in 2012, with 14 dawn raids. In the past five years, CADE conducted only two dawn raids in 2022; two in 2021; none in 2020; three in 2019; and four in 2018. 

Spoliation of information or any type of difficulties imposed by companies or individuals in the context of dawn raids are subject to fines of BRL20,000 to BRL400,000, to be imposed under a separate ancillary proceeding for that end.

Officers or employees under investigation have a right to counsel, which can be that of the company, although it is recommended that employees have a separate counsel to avoid conflict-of-interest issues.

The Brazilian legislation that regulates counsels’ activities prevents them from testifying about facts related to their clients. In addition, the Brazilian Civil Procedure Code provides that attorneys cannot advise witnesses during their testimony or hearing sessions. In view of these legal provisions, counsel tends to advise clients in advance on the context of the interview and strategy for defence, and may not intervene during interviews, except in a situation of possible violation of clients’ rights. In this situation, counsel may only make claims to the authority. However, counsel may ask questions during the hearings of other defendants.

During the initial phase of any enforcement action, defence counsels should learn all the facts under investigation, confirm whether there are any defendants already co-operating with CADE (by means of leniency or settlement agreements), carefully review the evidence collected by CADE against the client and speak to the individuals involved to understand the context of the enforcement, the client’s view on the enforcement action and the action’s possible commercial impact. As a result of all these steps, counsel will be able to define a defence strategy with the client.

Documentary evidence in the context of cartel investigations can be obtained through dawn raids, leniency agreements and cease-and-desist agreements, as well as submission by the investigated companies and individuals (voluntarily or under the authority’s inquiry). 

For procedural aspects concerning dawn raids, refer to 2.2 Dawn Raids. For the proceedings applicable to leniency agreements and cease-and-desist agreements, refer to 2.11 Leniency and/or Immunity Regime and 4.2 Procedure for Plea Bargaining or Settlement, respectively.

Non-documentary evidence, such as expert evidence and witnesses’ testimony, can be requested by the parties, interested third parties, or by CADE. The authority’s decision, granting or rejecting a request to produce any type of evidence, depends on the relevance and connection of the request with the scope of the investigation.

The production of available evidence depends on the relevance of that evidence to the defence strategy and the scope of the investigation, regardless of whether the evidence is available locally or in other jurisdictions. Basically, there is no legal obligation to provide information to CADE in the context of cartel investigations if the evidence can negatively affect the defendants’ interests and defence. Refer to 2.1 Initial Investigatory Steps for the consequences of not submitting a defence, and 2.7 Attorney-Client Privilege for information about the right to remain silent. 

Attorney-client privilege is widely applied to communications from or to in-house or external counsels, including during judicial hearings in which the attorney is asked to testify, except if necessary for self-defence or to benefit the client’s representation, subject to the client’s authorisation.

The Brazilian constitution and Criminal Procedure Code guarantee an individual’s right to remain silent, and that silence does not imply confession, although it can be used as grounds for a decision. Such guarantee can be applied to cartel investigations in the context of depositions and witnesses’ hearings, and it is widely applied in civil, administrative and criminal procedures.

When CADE requests information, it is customary for individuals and firms to respond, and failure to co-operate with the agency’s requests in the context of cartel investigations (especially in the context of dawn raids) may result in the imposition of fines ranging from BRL5,000 to BRL5 billion, in the case of submission of misleading or unreasonably untimely information. Therefore, it is recommended that the investigated party assesses the risk of providing certain evidence in light of the constitutional right against self-incrimination mentioned in 2.7 Attorney-Client Privilege. 

CADE’s internal regulations allow that confidential treatment is granted to the confidential and proprietary information of individuals and private legal entities, whether they are under investigation or are third parties. The following information can be considered as confidential, among other information to be analysed in each case:

• accounting books and registers;
• economic and financial information, including annual reports and financial statements that are not publicly available;
• tax or banking information;
• business secrets;
• production processes and formulas;
• revenues and turnover, including the volume of sales;
• date, value and form of payment of transactions;
• merger filing agreements;
• customers and suppliers;
• production capacity; and
• production costs and expenses for research and development of new products or services.

Confidential treatment is also granted in the negotiation of leniency agreements and cease-and-desist agreements, although evidence provided by the settling parties must be available to the investigated parties for the purposes of defence.

Defence counsels can schedule meetings with case handlers and file motions at any time during the investigation. During the ruling session, defence counsels have the right to request to present oral arguments. CADE’s officers are typically open to requests for meetings in the context of cartel investigations.

CADE’s Antitrust Leniency Programme was introduced in Brazil by Law No 10,149/2000, which amended the previous Brazilian Competition Law (Law No 8,884/94) to include provisions aimed at strengthening cartel enforcement. The first leniency agreement was executed in 2003 and CADE has executed 109 leniency agreements to date.

CADE’s Antitrust Leniency Programme has, in fact, been enabling companies and/or individuals who participate, or have participated, in a cartel or other anti-competitive practice, to obtain total exemption from the fines and penalties applicable to them, by entering into a leniency agreement. The benefits of leniency agreements are granted at the final ruling of investigations, when CADE attests to compliance with the obligations contained in the agreement.

In criminal cartel investigations, leniency agreements suspend the limitation period and extend the immunity granted by CADE. To that end, CADE co-operates with the Public Prosecutor’s Office to ensure the effects of leniency agreements and to ensure that directors, managers and employees of involved companies that do adhere to the leniency agreement are not prosecuted in the criminal sphere, where participants in a cartel can be subject to penalties of two to five years of imprisonment, plus fines.

The current regime does not prevent “ringleaders” from applying for a leniency agreement in Brazil.

If a company or individual is considering applying for immunity, it is extremely important to report the conduct to CADE as soon as possible, as only the first company and/or individual to report the cartel will be able to enter into a leniency agreement and obtain total exemption or mitigation of sanctions. To enter into a leniency agreement, the interested party must apply for a marker, as leniency requires that CADE cannot already be aware of the misconduct to be reported or that it does not have sufficient evidence to start an investigation (partial leniency). 

Partial leniency does not result in immunity, but in a reduction of one third to two thirds of the applicable penalties. In any event, the applicant can request a marker to report any additional unknown misconduct (“leniency plus”). Information submitted under the whistle-blowing channel, publications or information on the existence of an investigation within another government agency, generally, do not qualify as “prior knowledge” with CADE (to earn partial leniency), unless this information is considered sufficient to support the opening of an investigation. 

The signatories of a leniency agreement must confess and cease their participation in the cartel or other anti-competitive practice, report it and collaborate in the entire process of its investigation, providing CADE with relevant information and documents.

Companies that do not qualify to enter into a leniency agreement can propose a cease-and-desist agreement (see 4.2 Procedure for Plea Bargaining or Settlement for further information about this type of settlement).

The first leniency agreement was signed only in 2003, in the context of the cartel investigation into the surveillance services market. Until 2008, only ten leniency agreements had been entered into by CADE. From 2010 onwards, the average number of leniency agreements per year was ten, until in 2017 this number more than doubled and reached 21 settlements. However, since 2017, the number of leniency agreements has gradually decreased, with only one leniency agreement in 2022 and two agreements up to the end of May 2023. 

In Brazil, amnesty applies only in the context of leniency agreements. See 2.11 Leniency and/or Immunity Regime.

The Brazilian Antitrust Law states that the General Superintendence can request information and documents from any individuals or legal entities, government bodies, authorities and entities, whether they are the focus of the investigation or not. Such information can be requested by means of official letters issued by CADE, or during oral inquiries carried out by CADE. Company employees have the right to appoint counsel to assist them in any of these situations.

The General Superintendence may also request, through CADE’s Specialised Prosecutor’s Office, that judicial branches execute the search and seizure of documents at the domicile of the investigated individuals and companies. See 2.2 Dawn Raids for proceedings concerning raids/search-and-seizure measures.

CADE can also seek information from company employees to the extent that they co-operate and adhere to leniency agreements and cease-and-desist agreements.

If applicable, CADE can grant confidential treatment to the information provided by the individuals.

See 3.1 Obtaining Information Directly From Employees, as this also applies to target companies. 

In addition, CADE adopts the economic group doctrine, under which it may look into any subsidiary, branch, office or parent company belonging to the same decisional centre. According to this principle, CADE can contact companies of the same economic group to request information about one or more entities under investigation.

The Brazilian Competition Law is applicable to conduct adopted in the national territory (totally or in part) and to practices that take place abroad but which have an effect in Brazil. See 1.6 Extent of Jurisdiction for further information in this regard. Therefore, the Brazilian Antitrust Law provides that “a foreign company that operates or has a branch, agency, office, establishment, agent or representative in Brazil is considered as domiciled in the national territory”, and that “the foreign company shall be notified and subpoenaed of all procedural acts, regardless of power of attorney or contractual or statutory provision, in the person of the agent or representative or person responsible for its branch, agency, establishment or office installed in Brazil”. Accordingly, CADE’s case law states that evidence presented in an administrative proceeding can come from a different jurisdiction. CADE can therefore request information directly from companies or individuals located in other jurisdictions, by sending official letters directly to the company or by means of international co-operation mechanisms (see 3.5 Co-operation With Foreign Enforcement Agencies for further information), such as the exchange of information and documents with antitrust authorities from other countries, to obtain the necessary information about the case, or to obtain assistance in serving the foreign entity with the official letter.

CADE has entered into several technical co-operation agreements with different government authorities, such as state and federal Public Prosecutor’s Offices, regulatory agencies (eg, central bank, data protection, telecommunications, and insurance health agencies, etc), state and federal controllers’ offices, and the Federal Revenue Service, among others. These co-operation agreements usually have two to five years’ term which may be extended through the signing of an addendum.

The purpose of these collaborations is to enhance communication to ensure greater efficiency and speed in the prevention of cartel practices and other antitrust violations, as well as to obtain information to support the application of penalties, thereby avoiding the concealment of information that must be provided by the entities, subject to CADE’s oversight. 

Co-operation agreements also create a solid database that allows the development (or improvement) of studies and didactic materials on antitrust procedures and practices. Such measures are determined by the Brazilian Antitrust Law, which assigns to the General Superintendence the duty to guide public entities on the adoption of measures to protect competition, as well as to conduct studies and research that enable the prevention of violations against the economic order.

The parties to co-operation agreements are required to safeguard the legal secrecy of information protected by law or by their respective internal regulations. Copyright issues involving the creation of institutional dissemination materials must also be observed.

CADE has been using international legal co-operation with foreign authorities to enforce the Brazilian Competition Law, especially to obtain the assistance of foreign authorities to serve foreign companies and individuals that are being investigated in Brazil about the initiation of an antitrust investigation; to exchange information and documents about ongoing multi-jurisdictional mergers and investigations; and, in some situations, to conduct joint analyses and operations. For example, in an international cartel involving manufacturers of refrigerator compressors, which was investigated in Europe, the United States and Brazil, simultaneous searches and seizures occurred in several countries due to information exchange between CADE, the European Commission’s Directorate-General for Competition, and the US Department of Justice. More recently, in 2022, CADE exchanged information with the German competition authority regarding the use of algorithms to detect cartels and in the analysis of a co-operation agreement in the auto parts industry.

Brazil’s legal instruments for antitrust co-operation with other countries depend on voluntary adoption and national regulations. CADE has bilateral relations with at least 14 countries (eg, the United States, countries in Europe, Argentina, South Africa, Canada, Chile, Japan, Mexico, etc). Additionally, CADE participates in multilateral forums like the International Competition Network (which congregates representatives of competition authorities worldwide), the United Nations Conference on Trade and Development (UNCTAD), and the Organisation for Economic Co-operation and Development (OECD), which help promote dialogue and identify best practices in antitrust investigations.

Criminal lawsuits are initiated upon the filing of a criminal complaint by the Public Prosecutor’s Office, containing two basic elements: evidence about the misconduct and authorship of the crime. Such factors are evaluated during the inquiry phase, which is conducted by the judicial police, in the preparatory phase of the criminal lawsuit (ie, a police inquiry proceeding). The police inquiry can be initiated based on a complaint filed by any interested party, if it is accompanied by evidence that demonstrates the plausibility of the allegations brought. At the end of the inquiry, the police department issues a conclusive report, which helps the Public Prosecutor’s Office decide whether to lodge a criminal lawsuit (based on whether the report describes the existence of evidence indicating a crime and its authors).

Criminal lawsuits fall under the jurisdiction of the judiciary. Cartel conduct is a crime against the economic order, as stated by Federal Law No 8,137/90, the jurisdiction of which lies with the criminal state court. However, if the investigated practice causes actual damage to the property, interests or services of the federal government authorities, jurisdiction will lie with the federal court.

After being summoned to the proceedings, each defendant will present their response to the complaint, advancing preliminary arguments, attaching documents of interest, specifying the evidence intended to be produced, as well as listing witnesses. Subsequently, the criminal judge will assess whether to receive the complaint filed by the Public Prosecutor’s Office. If so, a date will be set for hearing the evidence and the trial. The defendants will have access to all the evidence used to support the complaint filed. Similarly, the defendants will be granted all legally admissible means of proof for the preparation of their defence.

Civil lawsuits start with the complainant filing a motion and supporting evidence directly before a judicial branch (either a state or federal court). The main requirements for a lawsuit to proceed are: (i) it must be filed by a legitimate interested party; and (ii) the lawsuit must be the only means and a proper measure to obtain the plaintiff’s request. Once the lawsuit is filed, the judge analyses the existence of those conditions and decides on possible requests for a preliminary injunction.

As a second step, the defendant will be notified to present the defence, and the plaintiff will have the right to submit a response. At this time, the parties must submit requests to produce any evidence (documents, hearings, expert evidence, etc).

The defendants will have full access to the evidence, including from third parties (provided that such means are lawful and authorised by the court, such as by means of court orders). Immediately after the end of the discovery phase, the parties will be summoned to present their final arguments, and there will be a final ruling.

The jurisdiction usually lies with the ordinary state court, if the complaint is filed directly against the company accused of antitrust violation by its customer. In the case of collective actions lodged to protect society and the economy (collective rights), the lawsuit is filed by the Public Prosecutor’s Office before the federal lower courts. Requests to review CADE’s decision, to obtain warrants for dawn raids, or lawsuits that have CADE as a defendant are also filed before the federal courts.

Enforcement actions involving cartels are typically brought against multiple parties in a single proceeding, but there is no legal provision establishing this as a requirement. As a cartel involves more than one participant, the Brazilian Competition Law provides that any interested party that may be affected by enforcement actions has the right to access the case records and submit its claims.

Since CADE analyses the evidence against each defendant individually and may render different decisions to each defendant under the same investigation, it is possible for parties to be investigated under separate proceedings related to the same facts as the original proceedings, in the following situations:

• The investigation involves a significant number of defendants and CADE faces difficulties in serving all of them. In this scenario, to avoid the investigation being paralysed for an unreasonable period of time, CADE may determine the segregation of proceedings; one involving the parties already served, and the other involving parties still to be served. This situation is often verified in investigations involving foreign companies and individuals, where serving proceedings may take more time and involve international co-operation.
• CADE finds out during the discovery stage of an existing cartel investigation that there are other companies and individuals that might be involved in the same alleged misconduct. In this scenario, CADE may determine the inclusion of the new defendants in the existing proceeding or – if the investigation is in an advanced stage – the initiation of a separate proceeding against the new defendants based on the same facts and evidence as the previous case.

As a rule, the burden of proof lies with the party that raises a certain argument or accusation. This means that, in theory, CADE, the Public Prosecutor’s Office and plaintiffs have the burden of proving the allegations that an antitrust violation exists.

Nonetheless, CADE’s recent case law states that the proof of the absence of negative effects, or the existence of positive effects that outweigh the harm caused by the conduct, is the responsibility of the defendant, and that such proof will be considered to reduce the penalty applied.

Law No 14,470/2022 also changed the burden of proof regarding overpricing derived from cartel investigations in the context of damages lawsuits. See 1.2 Public Enforcement Agencies and Scope of Liabilities, Penalties and Awards for further information about this matter.

CADE is the fact-finder and the one that applies the law for cartel enforcement. Inside CADE’s structure, the fact-finding and enforcement are carried out by different divisions: the General Superintendence and Administrative Tribunal, respectively. Refer to 1.2 Public Enforcement Agencies and Scope of Liabilities, Penalties and Awards for further information about CADE’s structure.

In the criminal sphere, the fact-finders are the police department and the Public Prosecutor’s Office, while the enforcers are the criminal courts.

Pursuant to the understanding of the Brazilian Superior Courts, evidence obtained from other proceedings can be used in one proceeding only under certain circumstances:

• the evidence must have been subject to full defence by the defendants in the original proceeding; and
• the evidence is considered as valid in the original proceeding.

CADE’s case law states that evidence presented in an administrative proceeding can come from a different jurisdiction.

Nevertheless, applicants for leniency agreements are prohibited from disclosing information or documents presented in connection with a leniency agreement even after the case has been judged, except if there is a judicial decision to the contrary.

CADE’s rules on evidence as a standard and burden of proof have been implemented in accordance with the authority’s case law evolution in the application of antitrust legislation and the implementation of best practices recommended by the OECD. The analysis of evidence is initially carried out by the General Superintendence, but its final legal evaluation to support a decision is the attribution of the CADE Tribunal. See 3.9 Burden of Proof for further details.

Investigated parties may retain economists and law professors specialised in competition matters to prepare opinions supporting the parties’ defence, based on questions put by that party and directed to reinforce arguments presented in defence. Typically, those opinions focus on demonstrating the lack of incentives or non-existence of negative effects to consumers, or even procedural flaws of the investigation. However, this is considered as documentary evidence, not expert evidence. Expert evidence (in which CADE appoints an expert to answer questions set by the authority and all the defendants by means of an opinion to confirm or reject the evidence in the case records) is rarely adopted by CADE. 

See 2.7 Attorney-Client Privilege which also explains the defendant’s right to remain silent for reasons of privilege or to avoid self-incrimination. In addition, 2.9 Protection of Confidential/Proprietary Information provides details on confidential information that is not disclosed to third parties.

The same facts can be investigated by different authorities involving different areas of law (administrative, criminal and civil), which attracts specific consequences for each area. However, the decisional practice of CADE and the Brazilian courts prohibits the initiation of more than one proceeding before the same authority to investigate the same facts regarding the same parties, as this may lead to conflicting decisions.

CADE’s Tribunal is in charge of imposing sanctions directly on companies and individuals convicted of antitrust violations. CADE’s Attorney General’s Office oversees monitoring the fulfilment of sanctions imposed by CADE. Defendants are granted a deadline to demonstrate the payment of fines imposed. If such a deadline expires, CADE’s Attorney General’s Office will initiate a judicial enforcement lawsuit. Other behavioural sanctions are also monitored by CADE’s Attorney General’s Office, which will initiate separate additional penalties for non-compliance and default in fulfilling CADE’s decisions.

Settlements are achieved by means of cease-and-desist agreements (“TCCs”). These agreements are executed between CADE and companies and/or individuals investigated for antitrust violations. Under a TCC, CADE agrees to suspend the investigations against the signatories of the TCC if the signatories comply with the terms of the TCC and agree to the commitments expressly provided therein. At the final ruling of the investigation, CADE will dismiss the investigation against the TCC signatories if full compliance with the TCC obligations is demonstrated.

The obligations assumed by a company or individual under a TCC include:

• full co-operation with investigations, by reporting information that helps the authority to identify other participants or to prove the violation;
• payment of a monetary contribution, which is based on the amount of an expected fine minus a deduction;
• acceptance of penalties in case of breach of the TCC obligations; and
• commitment to cease any antitrust violation.

In the case of cartel investigations, an additional covenant is required in the form of a confession to participating in the cartel.

A TCC is negotiated with the General Superintendence if the case is in the preliminary or discovery stages. If the case is already before the Administrative Tribunal for ruling, the TCC proposal will be negotiated with the reporting commissioner on the case. 

TCC proposals are received through markers that take into account the order of presentation of the interested parties before CADE. After the receipt of a certificate containing the marker, the interested party must file the TCC request within five days, formally declaring its interest in starting negotiations. The general superintendent or reporting commissioner determines a period for negotiations, which can be extended depending on the circumstances of the individual case. A “Negotiation Commission” is constituted to conduct the negotiations. Composed of at least three members, the commission refers the TCC request to the Administrative Tribunal with a suggestion of acceptance or denial of the proposal.

The number of TCCs executed by CADE in the past five years is significant and most of them relate to cartel investigations: from 2018 to 2022, 135 TCCs were executed, of which 120 involved investigations for cartel conduct, representing 89% of the total. The total monetary contribution collected during the period in question was BRL2,427,441,256.96 for all executed TCCs, of which BRL2,282,888,505.07 pertained to TCCs for cartel conduct, representing 94%.

In case of conviction by CADE, companies and individuals are subject to the following fines.

• Companies: 0.1%–20% of the gross revenues registered in the year preceding the investigation.
• Officers, directors, managers: 1%–20% of the fine imposed on the company.
• Other individuals and trade associations: BRL50,000–BRL2 billion.

There are several collateral effects where liability/responsibility is established by CADE. In addition to the fines, CADE can impose sanctions such as:

• the publication of the conviction decision in the newspaper;
• ineligibility for official financing and for participation in public biddings;
• the registration of the wrongdoer with the National Registry for Consumer Protection;
• a recommendation that –
1. a compulsory licence over the intellectual property rights held by the wrongdoer be granted, when the violation is related to the use of that right; and/or
2. the violator be denied the opportunity to pay federal taxes owed by instalment, or that tax incentives or public subsidies be cancelled, in full or in part;
• the company divestiture, transfer of corporate control, sale of assets or partial interruption of activity; or
• the wrongdoer be prohibited from carrying on trade on its own behalf or as the representative of a legal entity for a period of five years.

Such obligations are avoided in TCCs, which do not include ancillary sanctions of this nature.

As mentioned in 1.1 Statutory Bases for Challenging Cartel Behaviour/Effects, being involved in a cartel is also considered a crime in Brazil, under Law No 8,137/90. Individuals who are convicted by criminal authorities may be subject to the payment of fines and imprisonment for a period of two to five years, as provided for in criminal legislation. Criminal investigations may occur regardless of the existence of an investigation by CADE. CADE has no say in respect of penalties imposed in criminal proceedings. Companies cannot be investigated or held liable for cartel conduct in criminal proceedings in Brazil.

The Brazilian Anticorruption Law (Law No 12,846/2013) deals with civil liability applicable to companies in case of bid rigging. The applicable fines are the same as those provided in the Brazilian Antitrust Law, as mentioned in 4.3 Collateral Effects of Establishing Liability/Responsibility. See 5.1 Private Right of Action for details on the application of sanctions in civil litigation.

Effective compliance programmes are not a mitigating factor in imposing sanctions and penalties under the Brazilian Antitrust Law. Nonetheless, the implementation of compliance programmes can be among the commitments imposed on companies as a requirement for closing or settling antitrust investigations or even as a condition for clearing merger filings.

Fines imposed by CADE do not extend to mandatory consumer redress, which can be subject to private civil litigation, as described in 5.1 Private Right of Action. Fines imposed by CADE are paid to the “Fund for the Defence of Diffuse Rights”, created by the Brazilian government to compensate damages caused to the environment, economy, and historical, artistic and/or tourism rights, as well as any other collective rights.

CADE’s decisions may be subject to judicial review, under annulment lawsuits lodged by companies and/or individuals convicted by CADE of antitrust violations. In this regard, some judges understand that only procedural aspects of the investigation should be reviewed. Decisions determining the full annulment of CADE’s decision based on the analysis of merits (ie, the analysis proof) are rare, although the analysis of merits has gained force in recent years and become more frequent. Lawsuits aimed at reviewing CADE’s decisions are usually conditioned to the submission of bonds in the amount of the fine imposed by CADE.

In addition, companies and/or individuals may lodge a writ of mandamus during the course of antitrust investigations to request a preliminary injunction to review preliminary procedural orders and decisions.

Article 47 of the Brazilian Competition Law provides that any company or individual harmed by antitrust violations has the right to compensation under private litigation. Based on general requirements provided by the Brazilian Civil Code on damages claims, private damages litigation must contain:

• evidence of the damages caused;
• an estimate of the amount of the damages to be compensated; and
• evidence of a causal link between the damages caused and the antitrust violation.

Nevertheless, Law No 14,470/2022 has brought changes to the standards required to calculate and evidence damages (see 1.2 Public Enforcement Agencies and Scope of Liabilities, Penalties and Awards for further information). Lawsuits claiming damages are usually lodged before the lower state courts, where the headquarters of the company convicted of cartel activity (ie, the defendant) are located.

The Public Prosecutor’s Office is entitled to initiate collective action concerning competition matters, based on Law No 7,347/85, which provides for compensation of damages caused to “diffuse rights”, which includes antitrust violations.

Although unusual, consumer associations or other public interest groups also have the right to make claims for damages caused to their members, based on the general conditions for private damages lawsuits mentioned in 5.1 Private Right of Action.

Recent court decisions emphasise that providing evidence of the existence of a commercial relationship between indirect and direct purchasers and CADE’s conviction decision is not sufficient to determine the payment of compensation. Brazilian courts widely require that the direct damages suffered as a result of a cartel be demonstrated and calculated to justify compensation. Claims that indirect damages were suffered in the acquisition of inputs have been rejected by Brazilian courts under the argument that price formation considers fixed and variable costs, which are diluted in products and services and passed on to final consumers; therefore, there would not be any harm to indirect purchasers.

Evidence obtained from a CADE investigation and/or connected proceedings is admissible before the Brazilian courts in the context of private litigation. 

Judicial claims regarding cartel investigations or other competition matters tend to be completed rather than dismissed or settled. The resolution of a judicial claim can take approximately two years to be decided by the lower courts and more than two years under analysis by the appellate courts. If the claim is decided by the Brazilian Superior Courts, resolution may take more than five years. 

As a rule, the losing party in judicial claims is required to pay the legal fees and costs of the successful party in an amount of approximately 10%–20% of the value of the claim. 

See 5.6 Compensation of Legal Representatives.

See 5.1 Private Right of Action and 5.2 Collective Action.

Cartel enforcement has become more relevant in Brazil since 2003, when the first leniency agreement was executed, and CADE carried out the first dawn raid. At that time, CADE created the “Brazilian Cartel Enforcement Day”, celebrated on 8 October, the date the first leniency agreement in the country was signed and it published the first guidelines on cartel enforcement in the format of comic books. Since then, most antitrust investigations and the higher fines applied refer to cartel investigation (representing approximately 15%–20% of the companies convicted for cartel activity). For instance, in the five years from 2018 to 2022, 59 administrative proceedings were judged, of which 46 were investigated as cartels. In total, BRL3,966,705,598.37 was collected in fines applied to those convicted.

CADE publishes the following guidelines related to cartel enforcement:

• Guidelines – competition compliance programs;
• Fighting cartels in procurements;
• Guidelines – CADE’s antitrust leniency programme;
• Parameters for submitting evidence in leniency applications;
• Guidelines – cease-and-desist agreement for cartel cases (“TCC”); and 
• CADE’s internal guidelines on dawn raid operations (no English version available).