Chamber creates incentive for leniency agreements at Cade

The Chamber of Deputies this week approved a new benefit for those who seek CADE (Administrative Council for Economic Defense) seeking leniency agreements or the cessation of anti-competitive practices.

The change received the approval of the CCJ (Constitution and Justice Commission) in the final process. If there is no requirement for analysis in the plenary, the law will provide that people or companies punished in the civil sphere for damages caused by cartels that have not reached an agreement will receive a fine twice as high as those who helped in the investigation of the facts.

Without the law, those who collaborated with the authorities ended up being more exposed in the civil sphere for having admitted to participating in a cartel — which created the risk of fines for damages.

“The change preserves the golden rule of these agreements: those who collaborate can never be in a worse situation than those who do not collaborate,” he told Sheet the president of CADE, Alexandre Cordeiro.

The change was not the only one. The text approved in the CCJ also reduced the margin for companies punished for cartel in CADE to try to reverse the punishment in the Judiciary. An argument often used in this situation was that the surcharge created in a cartel was absorbed along the production chain, thus not reaching the final consumer.

The law reversed the burden of proof. Before, the companies passed on to those who suffered the damage the role of proving the pass-through of the surcharge. Now, the accused need to show that the damage did not reach the consumer.

“Some changes were improvements to the Competition Law. Others did not exist and we have put them in the law now”, pointed out Cordeiro.

For Cade, which collaborated with the project’s discussions, “a new private system for the defense of competition in Brazil will be inaugurated, granting legal certainty on issues that for years were undefined in the courts”.

Another novelty is the creation of an arbitration body to repair damages for those harmed by cartels.

CADE played a relevant role in cases of known cartels in Brazil, such as the São Paulo subway and contractors in Lava Jato cases. In the case of the São Paulo subway, the total fines for companies and individuals exceeded R$ 400 million.

In all, 11 companies were convicted in the case, in addition to 42 individuals. The punishment was only possible after a complaint from Siemens.

In the context of Lava Jato, the antitrust authority has several investigations. The most recent movement was in June this year, when the municipality signed an agreement with four contractors, employees and former employees that totaled R$ 460 million in payments.

The agreements with the companies involved cartels in various works, such as the São Paulo Metropolitan Strategic Road System Development Program, urban mobility works in the Federal District and subway and monorail projects in the states of Bahia, Ceará, Minas Gerais, Paraná, Rio de Janeiro, among others. In all, there were 19 agreements involving 12 different investigations, all derived from Lava Jato.

In these agreements, known as TCC (Term of Cessation of Conduct), the companies and individuals that sign assume their participation in the cartel and undertake to end the practice, among other points. In exchange, it has a different treatment in relation to the participants who did not sign an agreement