In July 2008 CADE rejected the acquisition by Owens Corning of Compagnie de Saint Gobain's fiberglass division in Brazil. The acquisition was part of a multinational deal, and marked one of the few opportunities in which CADE has blocked a transaction completely. At the time, the Brazilian competition agency provided Owens Corning with a deadline until February 1st 2011 to either divest a Saint Gobain's plant in State of São Paulo or submit a strategic plan for the sale to be completed (as the use of an independent investor to intermediate the divestiture).
According to a statement by CADE's President Fernando Furlan earlier this week, the deadline expired without any alternative solution being suggested by Owens Corning, which could cause CADE to begin an intervention at the former Saint Gobain's plant until the manufacturing unit is sold to an independent third-party. This would be the first time in CADE's history that it would make use of the powers granted by article 63 of the local antitrust law ("the execution of CADE's decisions shall be carried out by all means, including by way of intervention in the company, if necessary").
2/14/2011
Health Care Insurance Acquisiton Approved by CADE.
CADE has approved the acquisition of health care insurance companies "Planos de Saúde Integrais S.A.", "Assistência Médica São Paulo S.A." and "Orion Participação e Administração S.A." by Amil Assistência Médica Internacional Ltda last Wednesday - February 9th, 2011. The Counselors decided to follow the guidance of the National Health Insurance Agency ("ANS") over the territorial concept advocated by the Secretary of Economic Monitoring ("SEAE") in the analysis of the relevant market in the sectors of health care services providence and health insurance sales. The Counselors approved the transaction with a restriction of the non-competition clause for the next five years in markets operated by "Assistência Médica São Paulo S.A." and "Planos de Saúde Integrais".
1/06/2011
2011 Breaking News: Vinicius de Carvalho appointed as new Secretary of Economic Law (and other subjects)
Since this is the first post in the blog in 2011, Happy New Year, Readers and co-Bloggers!
The year began with Dilma Rousseff taking office as Brazil's new President. Dilma is the first woman to have this job in the Brazilian history. José Eduardo Cardozo, congressman (former lawyer) and Law professor has been appointed Minister of Justice and invited Vinicius Marques de Carvalho (currently one of CADE's Commissioners) as new Secretary of Economic Law (known as SDE). Carvalho accepted the offer, but he is not taking office before February. CADE currently has 5 members (the minimun quorum for decisions) and without Vinicius Carvalho the analysis of all cases would be immediately suspended. The antitrust community is now expecting for 3 new appointments that will be made by Dilma Rousseff to fullfill the vacant places at CADE, including CADE's President (CADE's Presidency is currently being occupied by Fernando Furlan). CADE's new members have to be approved by the Senate, after an official hearing before the Commission of Economic Matters.
Other fresh news from 2011 are upcoming. In the next days we will also include a few posts about December 2010's updates, pending publication.
The year began with Dilma Rousseff taking office as Brazil's new President. Dilma is the first woman to have this job in the Brazilian history. José Eduardo Cardozo, congressman (former lawyer) and Law professor has been appointed Minister of Justice and invited Vinicius Marques de Carvalho (currently one of CADE's Commissioners) as new Secretary of Economic Law (known as SDE). Carvalho accepted the offer, but he is not taking office before February. CADE currently has 5 members (the minimun quorum for decisions) and without Vinicius Carvalho the analysis of all cases would be immediately suspended. The antitrust community is now expecting for 3 new appointments that will be made by Dilma Rousseff to fullfill the vacant places at CADE, including CADE's President (CADE's Presidency is currently being occupied by Fernando Furlan). CADE's new members have to be approved by the Senate, after an official hearing before the Commission of Economic Matters.
Other fresh news from 2011 are upcoming. In the next days we will also include a few posts about December 2010's updates, pending publication.
12/17/2010
Brazilian Senate approves new competition law bill with amendments
On December 1st the Brazilian Senate has approved the bill for a new competition law.
Because the Senate has proposed amendments to the bill, it will return to the Chamber for review of acceptance of each of the amendments.
The bill was originally proposed by the government in 2005 and had previously been approved by the Chamber of Representatives in 2009.
The proposal for a new competition law was aimed to simplifying the institutional structure of the Brazilian Competition Authorities as well as implementing a pre-merger review process. Brazil currently has 3 different agencies involved in antitrust proceedings and is one of the very few jurisdictions that allow parties to conclude the merger before receiving green light from the enforcers.
One of the amendments to the bill proposed by the Senate is been subject to controversy. If accepted by the Chamber, the turnover thresholds for mandatory filing of mergers would be raised from R$400million to R$1billion, locally. Critics say Brazil would then have one of the highest thresholds in the World and therefore would face the risk of not been notified mergers that could have the potential to harm competition.
It is expected that the bill will be voted by the Chamber in the course of next year. It will not have immediate effects – the bill provides for a 12 month period for the restructuring of the authorities and preparation for the new pre-merger review system
12/15/2010
Brief update about what happened while we've been away
There were two judgement sessions uncovered 480ª and 481ª Sessions happened November 24 and December 8 respectively.
It is worth of noticing the case Alesat Combustíveis S.A. and Repsol YPF Distribuidora S.A was approved (480ª) with a Consent Decree determining the parties not to renew the agreement with the MFB Gas Station.
There was also the 16th International Antitrust Conference that happened between November 26 and 27 at Guarujá. You can see the Program here (yes! it is in English!) and the presentations that were made there are here. Unfortunately, of course, not everything is in English but Roberto Pardolesi's presentation regarding Unilateral Conduct is! You may also enjoy the presentations made by Matteo Bay (from Lathan& Watkins), Susan Hinchliffe (Arnold&Porter), José Ramón González-Magaz (Steptoe&Johnson) and Brian Byrne (ClearyGottlieb). And maybe Google Translator help you enjoy the rest!
Cheers!
11/17/2010
CADE's new 'official precedents'
On November 5th, CADE has issued two new 'official precedents', both concerning certain events that may trigger the need for a merger submission in Brazil.
CADE's 'official precedents' are enacted after the Brazilian competition agency has reached the same decision in 10 different cases, and have the purpose of indicating to the market how CADE will decide about a specific issue in future rulings.
The first one (Official Precedent n. 09) states that for the purposes of counting the deadline set forth in parag. 4 of article 54 of the local competition law, the transaction is considered to have 'occurred' after the sale/purchase option has been exercised, and not at the date such an option was formalized in a written agreement. The exception for such a rule is the situation where the instrument predicting the possibility of exercise of this option already produces rights and obligations that are capable of changing (even if merely potentially) the competitive landscape between the parties.
The second precedent (Official Precedent n. 08) states that for the purposes of counting the deadline set forth in parg. 4 of article 54 of the local competition law, the transaction is considered to have 'occurred' at the date the transaction was executed, and not after the implementation of a certain condition precedent.
CADE's 'official precedents' are enacted after the Brazilian competition agency has reached the same decision in 10 different cases, and have the purpose of indicating to the market how CADE will decide about a specific issue in future rulings.
The first one (Official Precedent n. 09) states that for the purposes of counting the deadline set forth in parag. 4 of article 54 of the local competition law, the transaction is considered to have 'occurred' after the sale/purchase option has been exercised, and not at the date such an option was formalized in a written agreement. The exception for such a rule is the situation where the instrument predicting the possibility of exercise of this option already produces rights and obligations that are capable of changing (even if merely potentially) the competitive landscape between the parties.
The second precedent (Official Precedent n. 08) states that for the purposes of counting the deadline set forth in parg. 4 of article 54 of the local competition law, the transaction is considered to have 'occurred' at the date the transaction was executed, and not after the implementation of a certain condition precedent.
11/05/2010
Partial outcome for soccer broadcasting rights' investigation
CADE decided this week, during its 478th Ordinary Session, to partially shelve a 13 year-long investigation involving soccer broadcasting rights. The shelving benefits one of the Defendants, Organizações Globo, one of the main Midia Groups in Brazil.
The investigation, initiated in 1997, concerned exclusivivity and preference rights in connection to the television broadcasting of soccers games.
During CADE's 477th Session held in October 20, 2010, CADE's Board decided to suspend the investigation against both Organizações Globo and Clube dos Treze (the major association of soccer teams in Brazil), conditioned to the execution of two Consent Decrees. Other defendants were acquitted.
The Consent Decree with Globo states that the Group will waive its preference to acquire broadcasting rights in connection to the main Brazilian soccer championships, as of the next season. As per the Decree executed with the team's Association, it says that the rights will be subject to negotiations between owners (the teams' Associations, especially Clube dos Treze) and potential buyers. Clube dos Treze agreed to offer and negotiate separately the rights to exhibit soccer games in five different Midias: free-to-air television, general pay television, pay-per-view channels, Internet and mobile devices. It also agreed to provide objective and transparent criteria for the biddings related to broadcasting rights and to allow the acquirer of the rights to freely sublicense them.
CADE's decision for the execution of Consent Decrees was not unanimous. CADE's President Arthur Badin, whose mandate expires this week, considered the obligations foreseen in the Decrees insufficient to guarantee the competition in the offer of broadcasting rights. However, all 6 Commissioners, including the Reporting Commissioner Cesar Mattos, were convinced that the Consent Decrees were the most suitable way to end the long administrative litigation and also that rights’ purchasers would have incentives to denounce restrictive behavior directly to CADE, during the monitoring phase of the Consent Decrees.
The investigation against Organizações Globo has now been shelved, since the Group demonstrated that it has already renounced to its contractual rights (preference clauses).
CADE will monitor the behavior of Clube dos Treze during the next 5 years, after which the case against it shall be shelved (unless irregularities - such as systematic refusals to deal - are verified by CADE).
The investigation, initiated in 1997, concerned exclusivivity and preference rights in connection to the television broadcasting of soccers games.
During CADE's 477th Session held in October 20, 2010, CADE's Board decided to suspend the investigation against both Organizações Globo and Clube dos Treze (the major association of soccer teams in Brazil), conditioned to the execution of two Consent Decrees. Other defendants were acquitted.
The Consent Decree with Globo states that the Group will waive its preference to acquire broadcasting rights in connection to the main Brazilian soccer championships, as of the next season. As per the Decree executed with the team's Association, it says that the rights will be subject to negotiations between owners (the teams' Associations, especially Clube dos Treze) and potential buyers. Clube dos Treze agreed to offer and negotiate separately the rights to exhibit soccer games in five different Midias: free-to-air television, general pay television, pay-per-view channels, Internet and mobile devices. It also agreed to provide objective and transparent criteria for the biddings related to broadcasting rights and to allow the acquirer of the rights to freely sublicense them.
CADE's decision for the execution of Consent Decrees was not unanimous. CADE's President Arthur Badin, whose mandate expires this week, considered the obligations foreseen in the Decrees insufficient to guarantee the competition in the offer of broadcasting rights. However, all 6 Commissioners, including the Reporting Commissioner Cesar Mattos, were convinced that the Consent Decrees were the most suitable way to end the long administrative litigation and also that rights’ purchasers would have incentives to denounce restrictive behavior directly to CADE, during the monitoring phase of the Consent Decrees.
The investigation against Organizações Globo has now been shelved, since the Group demonstrated that it has already renounced to its contractual rights (preference clauses).
CADE will monitor the behavior of Clube dos Treze during the next 5 years, after which the case against it shall be shelved (unless irregularities - such as systematic refusals to deal - are verified by CADE).
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