CADE allows trademark termination of merger under analysis

During the 473rd Section of Judgement CADE approved that all the Extra Eletro stores had their names changed either to Ponto Frio or Casas Bahia.

Extra Eletro stores are focused on eletronic household devices and computer and belong to Grupo Pão de Açúcar, major Brazilian retail and supermarket group, that has entered into a merger with Casas Bahia last December. Six months earlier, Pão de Açúcar has bought Ponto Frio. Casas Bahia and Ponto Frio were retail business for furniture and also electronic household devices and computers.

The two transactions are still under analyzis by CADE and Casas Bahia and Ponto Frio merger is under an agreement not to fully merge (in portuguese acronym, APRO) and under this agreement, trademarks Ponto Frio and Casas Bahia ought to be preserved until CADE's final judgement. However, Extra Eletro trademark, which belonged to the group involved in the transaction, was left out of the agreement and could be terminated without restrictions.

The parties made a formal request to CADE for the change, however.

CADE discussed State Action Doctrine and the limits to its competence

During the judgement of the case involving Public Transportation Services (Processo Administrativo no 08012.004989/2003-54), at Section 473 held last week, CADE has discussed the limits of its competence when analysizing public services and regulated markets.

Although no evidence of the abuse was found and the case was shelved as SDE's opinion recomended, Comissioner Cesar Mattos had changed the basis for shelving only to the lack of proof of abuse.

Because the case involved abuse of dominance in regulated markets of public services, SDE had based its opinion on the lack of CADE's Competence to analyse the abuse, once the market was fully regulated and monitored by São Paulo Municipality. Commissioner Mattos disagreed with the opinion, stating that whenever there is abuse, CADE can scrutinize and punish, even in regulated markets.

He was followed by the others Commissioners that proposed a deeper discussion of CADE's role in public services market, once it is limited to the competiton advocacy regarding the formation of bid's editals and the merger analysis of the winners may not be the best way to act.

CADE suggests investigation in the pay-TV market

Last week, during CADE's Session n. 473, the Board approved the acquisition of DTH operator ITSA – Intercontinental Telecomunicações Ltda. by Sky Brasil Serviços Ltda. and
suggested an inquiry in the pay-TV market, to be performed together with the Brazilian Telecommunications Agency (ANATEL). CADE also determined that a copy of files was sent to the Secretariat of Economic Law of The Ministry of Justice.

CADE fines Continental for unilateral practices

On August 18, the Brazilian Antitrust Agency has ruled in an investigation launched by the SDE in 2005 against Continental do Brasil Indústria Automotiva Ltda. (which has succeeded Siemens VDO Automotive Ltda.), after a complaint was filed Seva Engenharia Eletrônica S.A.

CADE has considered that Continental implemented a number of actions along Brazilian Courts and regulatory authorities with the purpose of imposing artificial barriers to entry for other competitors into the market for tachographs. The reporting commissioner was Mr. Fernando Furlan, who voted for the imposition of a fine to Continental equivalent of 1% of the company's turnover in 2004; Mr. Furlan was followed by commissioners Carvalho, Ragazzo and Ruiz.

CADE´s President Arthur Badin dissented, and voted for the shelving of the investigation, considering that the standard of proof has not been met in this case. Mr. Badin was followed by commissioners Chinaglia and Mattos.

Itaú/Unibanco banking merger gets green light from CADE

The merger between Itaú and Unibanco (AC# 08012.011303/2008-96) creating the largest private financial conglomerate in Brazil was unconditionally cleared by CADE., following favorable opinions from SEAE/SDE and from the Brazilian Central Bank.

The Reporting Commissioner Fernando Furlan considered that there is strong rivalry in the Brazilian financial market, especially from the state-owned banks who incentive efficiency and competitiveness.

473rd CADE's judgment Session is on

Cases to be judged are published here. We will keep you posted!

CADE clears the acquisition of Nossa Caixa by Banco do Brasil

On yesterday's (#472) judgement session, CADE has approved with conditions the acquisition of 71,25% of the stock capital of Banco Nossa Caixa (formerly owned by the São Paulo State) by the Banco do Brasil, a bank controlled by the Federal Government.

According to the Reporting Commissioner César Mattos, on 157 munipalities of the São Paulo State the transaction resulted in a market share superior to 40% (on some of them the concentration was100%). The only condition to the approval was the commitment to set up a free call center service for the customers located on such municipalities in order to inform them about the possibility to move their bank accounts to a competing financial institution and in case the customers chose to do so the call center will take care of the relevant documents for the migration to the bank elected by the customer.

Commisioner Olavo Chinaglia dissented from the remaining commissioners who agreed with Commissioner Mattos. Chinaglia voted for the unconditional approval of the transaction.

CADE shelves investigation against Cielo and Visa

In a decision issued during today's public hearing, CADE has decided to shelve a 2009 investigation launched by the SDE against VisaNet and Visa. SDE's concerns essentially referred to the existence of alleged 'abusive contracts' entered into by VisaNet and credit card company Visa, by means of which the former obtained the sole right to operate the Visa brand name in Brazil. A settlment was entered between CADE and the defendants on December 2009.



Today, according to reporting commissiner Olavo Chinaglia's ruling, CADE attested that VisaNet (now operating under the Cielo brand) had fulfilled all of the obligations assumed last December - specially the end of the exclusivity with Visa - and the investigation was officially shelved.

It is now very unlikely that CADE's activities will be disrupted before the end of the year

Yesterday the Senate approved the renewals of two mandates. Commissioners Olavo Zago Chinaglia and Vinicius Marques de Carvalho will have an additional 2 year-term each, and thus will integrate CADE's Board until August 2012. Both Olavo and Vinicius graduated and obtained PhDs in Law at the University of São Paulo. Olavo was a private practicioner before joining CADE, while Vinicius was already part of the Public Administration, helping to develop public policies in the Presency's Special Secretariat of Human Rights.

472nd CADE's judgment Session tomorrow

Cases to be judged are published here. We will keep you posted!

Commissioner Ragazzo renewal approved

Commissioner Carlos Emmanuel Joppert Ragazzo had his mandate at CADE renewed by the Senate last July 7th. The presidential approval was published last July, 29.

In this sense, the lack of Commissioners Olavo Zago Chinaglia and Vinícius Marques de Carvalho mandates renewal, yet to be voted, will not cause a disruption to CADE's work next month.

If we are alright to August, November brings us new trouble. President Badin and Commissioner Cesar Mattos mandates are to expire as well and we have not had any news.

Cesar Mattos mandate is expected to be renewed, but President Badin has already decline the new mandate and no nomination to his spot has been made so far.

Because of the election period, there is talk about a deputy president chosen among the Commissioners is expected to be set until the end of the year. To see.