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.

Brazilian Government Published the New Goals in connection to cartel persecution

In June 11, 2010, the Brazilian Government officially announced several goals to be achieved by the authorities of the SDE, the Federal Police, the Public Prosecution Offices in both federal and state spheres, the Public Security Secretariats, among others, in order to improve the repression to cartels in the country. The goals are the result of debates promoted during the 2nd edition of the meeting of the National Strategy of Cartel Repression ("Estratégia Nacional de Combate a Cartéis" - ENACC), held in Brasilia.

Due to the substantial increase of construction and infrastructure projects, in connection to the World Cup (2014) and the Olympic Games (2016) to take place in Brazil, the repression to bid rigging has been elected as a priority for the years to come.

As a result, a document called "Declaration of Independently Presented Bid or Proposal" (see attached Administrative Rule n. 51/2009, Annex II) will be mandatory for all contracts related to the major sportive events mentioned above, including when a bidding procedure is not required. Such declaration is already necessary since September 2009 in connection to bidding procedures conducted by entities of Federal Administration, according to a Instruction of Secretariat of Logistics and Information Technology of the Ministry of Planning.

Another important measure that has come out of the meeting between the authorities is the recommendation directed to the Brazilian Exchange Commission, in order for it to require from publicly traded companies (i) the publication of a material fact in case an administrative investigation of offense to the economic order is initiated and (ii) the adoption of a compliance program.

The accomplishment with these goals (and others) will be monitored by the authorities represented in the meeting, especially the members of the ENACC's Permanent Council (created in June 11, 2010 and integrated by the Secretariat of Economic Law of the Ministry of Justice, the Federal Police, the Public Prosecution Office, among others.