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1.
Relevant legislation
What is the relevant legislation?The current Brazilian Antitrust Act is Law No. 12,529/2011, which became effective on 29 May 2012 (replacing Law No. 8,884/94). Law No. 12,529/11 is applicable to companies and individuals alike. There are additional provisions in the form of resolutions and ordinances. The individuals may also be criminally prosecuted in Brazil for cartel offences, according to Law No. 8,137/90.
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2.
Relevant institutions
Which authority investigates cartel matters? Is there a separate prosecution authority? Are cartel matters adjudicated or determined by the enforcement agency, a separate tribunal or the courts?The Administrative Council for Economic Defence (CADE) is the Brazilian antitrust agency responsible for prosecuting and adjudicating cartel cases in the administrative sphere. Two of CADE’s departments are relevant for cartel cases: the General Superintendency and the Administrative Tribunal. CADE’s General Superintendency is responsible for the investigation and prosecution while CADE’s Administrative Tribunal adjudicates the cases investigated and prosecuted by CADE’s General Superintendency.
In the criminal sphere, cartels are prosecuted by the federal or state criminal prosecutors (that are completely independent from CADE). Criminal cases will be adjudicated by a criminal court.
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3.
Changes
Have there been any recent changes, or proposals for change, to the regime?There is a bill under Federal Senate analysis that proposes the following changes to the Brazilian Antitrust Act No. 12.529/2011:
- fines related to cartel conducts by companies or their economic groups to be proportional to the duration of the infraction to the economic order;
- establishing double reimbursement to the parties affected by the antitrust violation, with the exception of the defendants that executed leniency or settlement agreements;
- establishing the interruption of the statute of limitation during the term of the administrative process; and
- becoming CADE’s final decision able to motivate the granting of evidence protection in an eventual damage recovery lawsuit filed by third parties affected by the antitrust violation.
Currently, the proposed bill is being analysed by the Federal Senate’s Committee on Economic Affairs.
Recently, CADE issued Resolution No. 21/2018 (of 5 September 2018), which regulates the confidentiality of documents and information. Further details are set out in question 29.
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4.
Substantive law
What is the substantive law on cartels in the jurisdiction?A cartel is the conduct that produces, or has the potential to produce, the effects listed in article 36 of the Brazilian Antitrust Act, and its paragraph 3 exemplifies the types of conduct that result (or may result) in such effects.
Article 36 defines in general terms that conduct (notwithstanding its form) resulting in:
- limiting, restraining or in any way injuring free competition or free initiative;
- controlling the relevant market of goods or services;
- arbitrarily increasing profits; or
- exercising a dominant position abusively may be characterised as ‘violation to the economic order’ (antitrust violation), regardless of fault, even if effects are not achieved (ie, even if anticompetitive effects are only potential).
Article 36, paragraph 3, contains examples of types of conduct that, if resulting (or potentially resulting) in any of the above effects, may be deemed antitrust violations. Specifically, regarding a cartel, the following items of paragraph 3 are applicable:
- to agree, join, manipulate or adjust with competitors, in any way:
- the prices of goods or services individually offered;
- the production or sale of a restricted or limited amount of goods or the providing of a limited or restricted number, volume or frequency of services;
- the division of parts or segments of a potential or current market of goods or services by means of, among others, the distribution of customers, suppliers, regions or time periods; and
- prices, conditions, privileges or refusal to participate in public bidding.
In practice, CADE classifies a cartel, based on article 36, paragraph 3, as conduct that:
- regulates markets of goods or services by establishing agreements to limit or control research and technological development, the production of goods or services, or impairs investment for the production of goods or services or their distribution;
- limits or prevents the access of new companies to the market; and
- creates difficulties for the establishment, operation or development of a competitor company or supplier, acquirer or financier of goods or services, among others.
Because the Brazilian Antitrust Act establishes that only the conduct that may result in the anticompetitive effects mentioned above can be characterised as antitrust violations, a cartel is not a per se violation in Brazil. Therefore, a case-by-case analysis must be carried out, taking into account the circumstances and specifics of the case and the characteristics of the market involved.
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5.
Industry-specific provisions
Are there any industry-specific infringements? Are there any industry-specific defences or antitrust exemptions? Is there a defence or exemption for government-sanctioned activity or regulated conduct?Neither the Brazilian Antitrust Act nor CADE’s resolutions make reference to any industry-specific violations or exemptions.
However, on 28 February 2018, CADE and the Brazilian Central Bank (BACEN) executed a memorandum of understanding (MoU) to align CADE and BACEN’s jurisdiction over financial institutions. According to the executed MoU, CADE is the one responsible for investigating financial institutions regarding antitrust violations. In addition, in order to increase the technical consistency of its decisions, CADE also may request information from BACEN.
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6.
Application of the law
Does the law apply to individuals or corporations or both?The Brazilian Antitrust Act is applicable to both corporations and individuals. On the other hand, the criminal law applies only to individuals.
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7.
Extraterritoriality
Does the regime extend to conduct that takes place outside the jurisdiction? If so, on what jurisdictional basis?The Brazilian Antitrust Act applies to antitrust violations (even if potential) that occur on Brazilian territory and to those that take place outside Brazilian borders, but may have direct or indirect effects in Brazil.
In other words, international cartels that result or may result in direct or indirect effects within Brazilian territory are under CADE’s jurisdiction, even if no illegal conduct is carried out in Brazil.
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8.
Export cartels
Is there an exemption or defence for conduct that only affects customers or other parties outside the jurisdiction?There is no specific exemption in the Brazilian Antitrust Law regarding export cartels.
However, in a recent precedent from 5 September 2018, CADE’s Tribunal adjudicated a case in which the American Natural Soda Ash Corporation (ANSAC) was charged as an export cartel that allegedly violated the Brazilian Antitrust Law. CADE carried out an analysis based on the rule of reason and on the possible harmful effects of ANSAC’s exports into the Brazilian market. CADE’s Tribunal concluded that ANSAC’s exports did not result in harmful effects to the competition on the Brazilian market and thus shelved the case.
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9.
Steps in an investigation
What are the typical steps in an investigation?The investigation is initiated by CADE’s General Superintendency ex officio or upon a complaint being filed by any interested party.
Following the initiation of the administrative process, all defendants shall be served. The defendants shall provide their defences within 30 days. The 30-day deadline starts from the date that the last defendant is served. This deadline will be doubled (to 60 days) if there is more than one defendant represented by different attorneys. The defence deadline may also be extended for an additional period of 10 days at the defendant’s request, subject to CADE’s discretion. After the filing of such defences and within 30 working days (this deadline is to be considered as a reference), the General Superintendent will determine the evidence to be submitted, which may include the hearing of witnesses, requesting of additional information from the defendants, companies, associations or other entities, economic studies, etc.
At the end of the fact-finding phase, defendants will be required to submit new statements within five working days (10 working days if there is more than one defendant represented by different attorneys). After that, the General Superintendency shall issue its recommendation (either for the condemnation or for the shelving of the case) and forward the records to the CADE Tribunal for the final decision.
The case will be randomly assigned to a Reporting Commissioner at the CADE Tribunal. The Reporting Commissioner may request that the CADE Attorney General’s Office or the Federal Prosecutor issue their opinions within 20 days.
The Reporting Commissioner may also determine supplementary fact-finding steps at his or her discretion. After an eventual supplementary fact finding, the defendants shall submit their final statements within 15 working days (30 working days if there is more than one defendant represented by different attorneys).
After that, the Reporting Commissioner will schedule the trial for the case. The adjudication takes place during a public hearing at CADE’s plenary session. The final decision by the CADE Tribunal may be challenged only before the federal courts.
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10.
Investigative powers of the authorities
What investigative powers do the authorities have? Is court approval required to invoke these powers?CADE’s General Superintendency is responsible for investigating antitrust violations, including cartels.
While conducting the investigation, the General Superintendency has the power to request information and documents from any individual or legal entity, state bodies and authorities, whether public or private.
The General Superintendency can also summon any individual or legal entity (whether private or public) for a hearing.
Refusal to comply with CADE’s request is punishable with a daily fine starting from 5,000 reais, which may be increased up to 20 times if necessary to ensure its effectiveness (article 40 of Law No. 12,529/11).
However, the Brazilian Constitution guarantees the right against self-incrimination, in the sense that a witness may remain silent if the answer may result in self-incrimination. If the request for information demands a written answer, the company or individual may also refuse to answer in case of self-incrimination, but it is important to submit a document in compliance with the defined deadline stating that it will remain silent, otherwise there is the risk of being punished by not complying with the RFI’s deadline.
The General Superintendency may conduct inspections at the head offices, establishments, offices, branches or subsidiaries of the investigated company where inventories, objects, papers of any nature, as well as commercial books, computers and electronic files may be searched. An inspection is dependent on the agreement by the company. Such agreement is necessary because according to the Brazilian Constitution, the same law making a home inviolable is extended to any company’s office or establishment. This legal barrier can only be removed by agreeing to an inspection or by a court order. If the company does not want an inspection, it is advised to register its disagreement in case CADE interprets any inaction as an agreement.
The General Superintendency may also request, through CADE’s Attorney General, a search warrant (dawn raid) in the federal court to search for objects, papers of any nature, as well as commercial books, computers and electronic files in the interest of an administrative investigation. This situation is different from the inspection in the sense that the company cannot refuse to allow the search in case of a federal court order. In practice, due to difficulties within the court system to grant warrants for dawn raids, the General Superintendency usually depends on evidence provided in leniency agreements to convince the federal judges to authorise them.
CADE’s General Superintendency does not have the power to perform or request wiretapping or email monitoring. This is only possible in criminal investigations through specific court authorisation upon the request of the police or the criminal prosecutor. However, this evidence may be used as evidence in CADE’s administrative proceedings. CADE recently executed a series of cooperation agreements with Criminal Prosecutor’s Bureaus from different Brazilian states.
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11.
Inter-agency cooperation
Is there cooperation with authorities in other jurisdictions? If so, what is the legal basis for, and extent of, cooperation?Yes. CADE has signed a number of cooperation agreements with other antitrust authorities in jurisdictions such as Argentina, Canada, Chile, Colombia, Ecuador, the EU, France, Japan, Peru, Portugal, South Korea, the US and the other BRICS members (Russia, India, China and South Africa). By means of these agreements the authorities may exchange non-confidential information regarding current antitrust investigations.
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12.
Interplay between jurisdictions
Which jurisdictions have significant interplay with your jurisdiction in cross-border cases? If so, how does this affect the investigation, prosecution and penalising of cartel activity in cross-border cases in your jurisdiction?CADE’s General Superintendency has significant interplay with US and EU authorities, which has resulted in a series of international cartel investigations in Brazil following investigations started by US and European authorities.
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13.
Decisions
How is a cartel proceeding adjudicated or determined?A cartel proceeding is adjudicated by CADE’s Tribunal. As explained above (see question 9), the General Superintendency is responsible for the administrative investigation and prosecution of antitrust violations and the Tribunal is responsible for the final adjudication in the administrative sphere.
At the CADE Tribunal antitrust violation cases such as cartels will be adjudicated in a public adjudication session by the Tribunal full court. The defendant has 15 minutes to orally provide the defence arguments before the Reporting Commissioner reads his or her vote. After that, the votes of other Commissioners are collected. The decisions are taken by a majority of votes (the CADE Tribunal is composed of one president and six commissioners).
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14.
Burden of proof
Which party has the burden of proof? What is the level of proof required?CADE’s General Superintendency that has the burden of proof to sustain the charge against the defendants. Such proofs can be collected ex officio and also through a leniency agreement or settlement agreements executed between the authority and individuals or companies involved in the antitrust violation. The standard of proof is defined case by case according to the market characteristics, the dynamics of the misconduct and the evidence gathered in dawn raids, leniency agreement and settlement agreements.
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15.
Circumstantial evidence
Can an infringement be established by using circumstantial evidence without direct evidence of the actual agreement?Yes, CADE uses circumstantial evidence to support condemnations.
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16.
Appeal process
What is the appeal process?A CADE Tribunal decision can be challenged only before the federal courts. The scope of the appeal is broad and may regard the due process, the merit of the case, as well as the balance of the penalties. It is important to clarify that lawsuits in Brazil are not expeditious, usually lasting between 5 to 10 years or more. It is also important to mention that to challenge CADE’s adverse decision it is necessary to deposit in a court’s bank account the full amount of the fine imposed by the tribunal.
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17.
Criminal sanctions
What, if any, criminal sanctions are there for cartel activity?A cartel is a federal crime defined in article 4, item II, of Law No. 8,137/1990. The criminal penalty for a cartel is imprisonment from two to five years, plus a criminal fine. Only individuals may be criminally prosecuted for cartel offences.
The administrative prosecution of cartels (performed by CADE) has been more effective than criminal prosecutions (performed by criminal public prosecutors) in the past years. However, the criminal prosecution of cartels has been increasing lately. In light of this, CADE has recently signed a series of cooperation agreements with Criminal Prosecutor’s Bureaus from different Brazilian states.
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18.
Civil and administrative sanctions
What civil or administrative sanctions are there for cartel activity?The administrative sanction is imposed by the CADE Tribunal, pursuant to article 37 of the Antitrust Act. The main penalties are fines, such as:
- for companies, a fine ranging from 0.1 per cent to 20 per cent of the gross revenues of the company, group or conglomerate, registered in the last fiscal year before the initiation of the administrative proceeding, in the field of the business activity in which the violation occurred, which will never be less than the advantage obtained, when possible the estimation thereof;
- for individuals in managerial positions (for example, CEOs, directors, managers), directly or indirectly responsible for the violation committed, if their fault or wilful misconduct is proven, a fine ranging from 1 per cent to 20 per cent of the fine imposed on the company; and
- in the case of other individuals or public or private legal entities, as well as any association of persons or de facto or de jure legal entities, even if temporary, incorporated or unincorporated, which do not perform business activity, not being possible to use the gross sales criteria, a fine of between 50,000 and 2 million reais.
In addition to the penalties mentioned above, pursuant to article 38 of the Antitrust Act, other penalties may also be cumulatively imposed (together with the fines) by CADE, such as:
- the requirement to publish the adverse decision in a newspaper of wide circulation;
- a prohibition on contracting with public financial institutions and of participating in biddings held by public bodies for no less than five years;
- a split-up of the company or a divestiture of certain assets;
- the recommendation to the relevant public bodies to grant compulsory licence of intellectual property rights when the offence is related to the use of these rights;
- the recommendation to the relevant public bodies not to grant the payment of federal taxes in instalments or to cancel, in whole or in part, tax incentives or public subsidies;
- the prohibition on performing commercial activities on their own behalf or as a corporate representative for a period of five years (for individuals);
- the inclusion of the perpetrator in the National Consumers Roll; and
- to determine any other act or measure in order to eliminate the harmful effects to the economic order.
Regarding civil liabilities, the Brazilian Antitrust Act expressly recognises the independence between administrative and civil liabilities, meaning that a civil damages recovery lawsuit does not depend on a previous CADE Tribunal’s adverse decision. Civil damages recovery lawsuits (individual claims or class actions) can be filed by any affected third parties, following articles 186 and 927 of the Brazilian Civil Code, which set a general obligation to the party at fault to indemnify the damages caused to others.
The complainant seeking damages compensation must prove:
- the violation of the Antitrust Act;
- the damage; and
- the causal link between the violation and the damage.
Nonetheless, damages recovery lawsuits motivated by antitrust violations are still uncommon in Brazil. One of the most important difficulties in carrying out civil damages recovery lawsuits is the time frame before a final decision is reached. This may take several years, with more than a decade being not uncommon.
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19.
Guidelines for sanction levels
Do fining or sentencing principles or guidelines exist? If yes, are they binding on the adjudicator? If no, how are penalty levels normally established? What are the main aggravating and mitigating factors that are considered?Pursuant to article 37, paragraph 1 of the Brazilian Antitrust Act, the CADE Tribunal shall consider the following criteria when imposing fines:
- the seriousness of the violation;
- the defendant’s good faith;
- the advantage obtained or intended by the defendant;
- the materialisation or not of the violation;
- the degree of damage or danger to harm, to free competition, to the national economy, to consumers or to third parties;
- the negative economic effects produced in the market; and
- the defendant’s economic status.
The Antitrust Act also states that the fine is doubled in the event of recurrence.
There is no specific guideline regarding the interpretation of these criteria and they are assessed on a case-by-case evaluation by the CADE Tribunal. However, recurrence is the main aggravating factor that can double the fine. There are no specific mitigating factors in the Brazilian Antitrust Act other than cooperation through leniency or settlement agreements that may result in full immunity or fine reduction, respectively.
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20.
Debarment
Is debarment from government procurement procedures automatic, available as a discretionary sanction, or not available in response to cartel infringements? If so, who is the decision-making authority and what is the usual time period?As mentioned above (see question 18), there are other penalties that may also be cumulatively imposed with fines. One of them is the prohibition on contracting with public financial institutions on participating in bids held by public bodies. If this specific ancillary penalty is imposed, it will be valid for no less than five years. Ancillary penalties are applied at CADE Tribunal’s discretion. There are some CADE precedents concerning bid rigging in which this was applied.
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21.
Parallel proceedings
Where possible sanctions for cartel activity include criminal and civil or administrative sanctions, can they be pursued in respect of the same conduct? If not, how is the choice of which sanction to pursue made?Administrative, criminal and civil liabilities are completely independent. As a consequence, the same conduct can be prosecuted in the administrative and criminal spheres as well as being subject to a civil recovery lawsuit at the same time (in parallel). In practice, CADE’s decision is the fastest, so it is often used as evidence in both the criminal prosecution and the civil recovery lawsuits.
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22.
Private damage claims
Are private damage claims available for direct and indirect purchasers? What level of damages and cost awards can be recovered?The Brazilian Antitrust Act does not distinguish between ‘direct or indirect purchasers’. The Act foresees in general the possibility for a damage recovery lawsuit to be brought by any party affected by the violation.
Civil damages recovery is calculated by the extension of the damages. There is no possibility of multiplying factor application. Defendants in a damage recovery lawsuit are jointly and severally liable. It is important to clarify that private damage claims in Brazil related to antitrust violations are new and there are only a few cases under discussion in the civil court.
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23.
Class actions
Are class actions possible? If yes, what is the process for such cases? If not, what is the scope for representative or group actions and what is the process for such cases?Class actions to recover civil damages are possible in Brazil. The following entities are entitled to file class actions:
- the Federal Prosecutor;
- the union, the states, the municipalities and the federal district;
- the entities and bodies of public administration, specifically those destined to defending interests and rights protected by the Consumer Protection Code; and
- the associations legally incorporated in at least one year, which have among its institutional purposes, the protection of interests and rights within the Consumer Protection Code.
As mentioned previously, the Brazilian Antitrust Act expressly recognises the independence of administrative and civil liability, meaning that a civil damages recovery lawsuit does not depend on a previous adverse CADE decision. The complaint seeking damages compensation before the civil court must prove:
- the illegal act;
- the damage; and
- the causal link between the illegal act and the damage.
There is a trend that public prosecutors are intensifying civil damages lawsuits related to cartel cases.
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24.
Immunity
Is there an immunity programme? If yes, what are the basic elements of the programme? What is the importance of being ‘first in’ to cooperate?In 2000, the Brazilian leniency programme was inserted by Law No. 10,149/00 and has been improved since then.
A successful leniency application entitles the applicants to criminal immunity and also to full immunity against CADE’s fines or a reduction from one- to two-thirds of such administrative fines, if the General Superintendency already had prior knowledge of the reported violation. It also entitles individuals for full immunity against the antitrust criminal prosecution.
On the other hand, the leniency agreement does not grant immunity for civil damages recovery lawsuits.
A company or an individual is qualified for the leniency application before CADE if it participated in the antitrust violation and if it fulfils the criteria below, cumulatively:
- it is the first to apply for the leniency in relation to the disclosed violation;
- it ceases participation in the disclosed violation;
- at the time of the leniency application the General Superintendency did not have enough evidence to guarantee the conviction of the applicant;
- it confesses its participation in the violation;
- it provides full and permanent cooperation with the investigation and respective administrative process, attending any investigation action when requested at its expenses; and
- the cooperation results in:
- the identification of the other participants involved in the violation; and
- information and documents that prove the disclosed violation.
The effects of the leniency agreement may be extended to other entities of the same economic group and its employees. However, this extension is not automatic and it is mandatory that these other entities and employees adhere to the leniency agreement to be protected.
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25.
Subsequent cooperating parties
Is there a formal partial leniency programme for parties that cooperate after an immunity application has been made? If yes, what are the basic elements of the programme? If not, to what extent can subsequent cooperating parties expect to receive favourable treatment?Full immunity in the leniency programme is granted only to the first applicant. However, the subsequent companies and individuals that did not come first may execute settlement agreements (TCCs) with the authority, qualifying for an administrative fine reduction.
According to the settlement agreement programme, the companies and individuals that are defendants in an administrative proceeding may settle an antitrust investigation if they:
- confess their misconduct;
- fully cooperate with the investigation; and
- pay a pecuniary contribution (in the case of cartel investigation).
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26.
Going in second
What is the significance of being the second cooperating party? Is there an ‘immunity plus’ or ‘amnesty plus’ option?Regarding the settlement agreement programme, the main advantages for a defendant to execute a TCC are:
- reduction in the expected fine;
- the administrative process will be suspended in relation to the applicant; and
- it does not have to support the defence costs. In contrast to the leniency agreement, the TCC does not grant criminal immunity for individuals.
The reduction of the expected fines in a settlement agreement negotiated by the General Superintendency varies according to the collaboration offered by the applicant and the timing of the TCC application (the sooner the application, the larger the discount), following the ranges below:
- a reduction of 30 per cent to 50 per cent for the first TCC applicant;
- a reduction of 25 per cent to 40 per cent for the second TCC applicant;
- a reduction of up to 25 per cent for the remaining TCC applicants, but subsequent reductions shall be always lower than the previous one; and
- a reduction of up to 15 per cent if the TCC application is requested when the records are already at the CADE Tribunal for adjudication.
In practice, for individuals in managerial positions, the pecuniary contribution is usually defined as up to 5 per cent of the pecuniary contribution applied for the company and for the individuals in non-managerial positions it usually varies from 50,000 to 150,000 reais.
There is also a possibility of a higher reduction for TCC applicants called leniency plus.
A leniency plus consists of the reduction by one-third to two-thirds of the applicable penalty for a defendant (company or individual) that did not qualify for a leniency agreement in the conduct under investigation, but has information regarding a different conduct and thus may qualify for a new leniency agreement regarding another violation that General Superintendency had no prior knowledge.
Where applying for leniency plus, the following parameters for discounts on the expected fine will be applied to the TCC:
- the first proponent of a TCC with leniency plus: from 53.33 per cent to 66.67 per cent;
- the second proponent of a TCC with leniency plus: from 50 per cent to 60 per cent; and
- for all other proponents of a TCC with leniency plus: up to 50 per cent.
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27.
Approaching the authorities
Are there deadlines for initiating or completing an application for immunity or partial leniency? Are markers available and what are the time limits and conditions applicable to them?There are no deadlines to apply for a leniency agreement. However, after the initiation of the administrative process the applicant will be qualified to a fine reduction and not to full immunity of CADE’s fines. It is also important to state that the leniency agreement is executed at General Superintendency discretion that will have a less incentive after the initiation of the administrative process.
If the applicant does not have all the necessary information and documents on hand to formally submit the leniency application, it may request a marker in order to secure a place at the front of the queue for the leniency application.
The marker request may be submitted to the General Superintendency orally or in writing and shall contain the following information (even if partially), regarding the conduct to be reported:
- complete identification of the leniency applicant, as well as the identity of the other known companies and individuals participating in the violation to be reported;
- the products and services affected by the reported violation;
- the estimated duration of the reported violation, when possible; and
- the geographic area affected by the violation. In the case of an international cartel, it must be stated that the conduct has at least the potential to generate consequences in Brazil.
If the marker is available, the General Superintendency will issue a statement securing the marker within five working days and will establish the deadline for the applicant to provide all relevant information and documents.
There is also no deadline for applying for a TCC. However, considering that the position in line for the TCC and the timing of the application (according to the phase of the administrative process) directly influences the amount of discount in the pecuniary contribution, it is recommended that any defendant interested in applying for a TCC submits its request as soon as possible.
CADE also uses a marker system to monitor TCC applicants and the level of discount in the pecuniary contribution will depend on the position of the applicant in the TCC’s line. The date of the TCC’s marker application is what defines the position of the applicant in the TCC’s line.
CADE’s Internal Rules, updated on 13 June 2017, foresee that if a marker for a leniency agreement is not available, the applicants on the waiting list for the leniency agreement’s proposal will be given the opportunity to negotiate for a TCC, if they want to, in the same chronological order they arrived for the leniency agreement’s proposal.
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28.
Cooperation
What is the nature, level and timing of cooperation that is required or expected from an immunity applicant? Is there any difference in the requirements or expectations for subsequent cooperating parties?The applicant of a leniency agreement must provide evidence supporting the disclosed violation and shall cooperate fully and continuously with the investigation. The amount of information necessary to secure a leniency agreement may vary from case to case. Usually, the documents requested by the General Superintendency are documents and emails exchanged with competitors evidencing the reported violation. Copies of telephone records, agendas, employee meetings, etc, may also be requested.
In a TCC, the cooperation will influence the amount of discount in the pecuniary contribution. In this sense, the more evidence provided, the greater the discount.
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29.
Confidentiality
What confidentiality protection is afforded to the immunity applicant? Is the same level of confidentiality protection applicable to subsequent cooperating parties? What information will become public during the proceedings and when?The process of requesting and negotiating leniency and settlement (TCC) agreements is confidential. After these agreements are executed, their confidentiality will be regulated by the recently issued CADE Resolution No. 21/2018 (of 5 September 2018).
The following documents and information are confidential according to article 2 of Resolution 21/2018:
- the history of conduct (including amendments and attachments) of leniency and settlement agreements;
- those listed in articles 44, section 2º, 49, 85, section 5º e, and 86, section 9º of the Brazilian Antitrust Law No. 12/529/2011, as well as in articles 91 to 94 and 219 of CADE’s Internal Resolution;
- those containing trade secrets and related to the business activity of individuals or legal entities of private rights;
- those that constitute grounds for confidentiality under the legislation (article 6º, I e II of Order No. 7,724/2012);
- those whose confidentiality is ordered by a judicial decision; and
- those submitted by the proponents, during the negotiation of the leniency or settlement agreements and not executed, while they have not been returned to the proponents or destroyed by CADE.
After CADE’s Tribunal casts its final decision regarding the case, all documents will be public, except those comprised in article 2, listed above.
According to article 3 of CADE’s Resolution 21/2018, the documents deemed confidential may be exceptionally accessed by third parties in the following circumstances:
- legal determination;
- specific judicial decision; and
- authorisation by the signatories of leniency and settlement agreements, with CADE’s consent.
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30.
Settlements
Does the investigating or prosecuting authority have the ability to enter into a plea bargain, settlement or other binding resolution with a party to resolve liability and penalty for alleged cartel activity? What, if any, judicial or other oversight applies to such settlements?CADE’s General Superintendency may propose a settlement agreement to the defendants of an administrative investigation.
If a CADE decision is challenged in the federal court, CADE’s Tribunal may authorise CADE’s Attorney General to terminate the lawsuit through a judicial agreement.
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31.
Corporate defendant and employees
When immunity or partial leniency is granted to a corporate defendant, how will its current and former employees be treated?The protection deriving from a leniency agreement may be extended to other entities of the same economic group and to employees. However, this extension is not automatic and it is mandatory that these other entities and employees adhere to the leniency agreement to be protected.
In the TCC this extension will depend on the existence of specific clauses allowing the employees and former employees to adhere to the TCC negotiated by the company or the existence of an umbrella clause, by which the TCC automatically covers other entities of the same economic group and its employees.
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32.
Dealing with the enforcement agency
What are the practical steps for an immunity applicant or subsequent cooperating party in dealing with the enforcement agency?The leniency agreement application can be divided in four phases:
- secure a marker;
- negotiate and submit the content of the history of conduct (a document with a detailed description of the conduct) and the evidentiary documents to be provided;
- execute the leniency agreement; and
- the final declaration of compliance of the leniency agreement by the CADE’s Tribunal with consequent confirmation of immunity (such declaration of compliance will happen when CADE’s Tribunal casts its final decision regarding the administrative process).
A TCC application can be divided into four phases:
- secure a marker;
- negotiate and submit the content of the history of conduct (with a detailed description of the conduct) and the documents of evidence to be provided;
- approval of the TCC by CADE’s Tribunal and its execution with the consequent suspension of the investigations regarding the defendants covered by it; and
- the final declaration of compliance of the TCC when CADE’s Tribunal casts its final decision regarding the administrative process.
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33.
Policy assessments and reviews
Are there any ongoing or anticipated assessments or reviews of the immunity/leniency regime?There are no ongoing or anticipated assessments or reviews of the leniency or settlement programmes.
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34.
Disclosure
What information or evidence is disclosed to a defendant by the enforcement authorities?According to the Brazilian Constitution the defendants shall have full access to the records (including full content of the leniency and TCC agreements). In this sense, it is guaranteed that all information and evidence is made available to the defendants for the purpose of complying with the due process of law and of guaranteeing all rights of defence.
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35.
Representing employees
May counsel represent employees under investigation in addition to the corporation that employs them? When should a present or past employee be advised to obtain independent legal advice?Yes, counsel are able to represent not only the corporation involved but also its employees under investigation. Generally, employees are represented by the same counsel hired by the corporation. However, in case of conflict of interests between the corporation and the current or past employee, the employee shall be represented by separate counsel.
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36.
Multiple corporate defendants
May counsel represent multiple corporate defendants? Does it depend on whether they are affiliated?It depends. It is possible if there is no conflict of interest.
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37.
Payment of penalties and legal costs
May a corporation pay the legal penalties imposed on its employees and their legal costs?The Brazilian Antitrust Act does not prevent the company from paying individuals’ penalties or legal costs.
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38.
Taxes
Are fines or other penalties tax-deductible? Are private damages awards tax-deductible?Neither fines nor other penalties imposed by CADE nor private damages awards are tax-deductible.
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39.
International double jeopardy
Do the sanctions imposed on corporations or individuals take into account any penalties imposed in other jurisdictions? In private damage claims, is overlapping liability for damages in other jurisdictions taken into account?The criterion to determine whether the anticompetitive violation is under Brazilian jurisdiction is if it has directly or indirectly produced effects in Brazil, even if potentially. In this sense, the Brazilian antitrust and criminal laws are fully applicable to those situations notwithstanding the existence of penalties imposed by other jurisdictions. Regarding private claims, a complainant cannot sue a defendant to recover the same damages more than once, owing to protection against double jeopardy.
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40.
Getting the fine down
What is the optimal way in which to get the fine down? Does a pre-existing compliance programme, or compliance initiatives undertaken after the investigation has commenced, affect the level of the fine?The eventual adoption of a compliance programme has no influence over the fine calculation. Therefore, the best way to reduce a possible fine is to execute either a leniency agreement or a TCC.
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Updates and trends
No updates at this time.

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O.C. Arruda Sampaio is a boutique law firm specialised in antitrust law as well as litigation related to the above referred areas, with a long list of services rendered to Brazilian and foreign clients since its creation, in 1993.
View more information about O C Arruda Sampaio
São Paulo
Alameda Ministro Rocha Azevedo, 882, 8th floor01410-002
São Paulo
Brazil T: +55 11 3060 4300
F: +55 11 3082 2272
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