Public consultations on new rules for submission of associative agreements and fixing of a 30-day term for fast-track proceedings
On May 11, 2016 the Administrative Council for Economic Defense ("CADE" – Conselho Administrativo de Defesa Econômica) launched public consultations on the new notification criteria for associative agreements and the proposal to set forth the maximum period for analysis of concentration acts submitted under the summary proceeding..
Public Consultation No. 01/2016, concerning the period for analysis of concentration acts submitted under summary proceeding, aims to include in Resolution no. 2 a thirty (30)-day term for CADE's General Superintendence to issue clearance decisions. In case this period is exceeded, the General Superintendence - SG must submit the reasons for not complying with the term to CADE's Tribunal, what gives priority to the analysis of the concentration act and determines its immediate publication. The proposed change shows CADE's intent to regulate a commitment already established informally by the agency.
Public Consultation No. 02/2014concerns the definition of new criteria for the notification of associative agreements for CADE's scrutiny, with the consequent revocation of Resolution no. 10/2014, which currently regulates the theme.
Amongst the new parameters set forth by the proposed Resolution is the definition of associative agreements as "any agreements setting a common enterprise for exploitation of an economic activity". To this effect, the proposed Resolution provides that common enterprise is characterized by the cooperation of the parties to an agreement providing for the sharing of the corresponding risks and results and with duration equal to or longer than, two (2) years." It also further defines "economic activity" as the acquisition or offer of goods or services in the market, even when not for profit, provided that such activity is exploited by a private company with profit intention.
Some changes in the notification criteria, however, tend to reduce the number of notifications, especially as regards vertical integration. The chart below shows the main proposed changes:
2. Involve "horizontal or vertical cooperation or sharing of risks entailing interdependence".
2. whenever the agreement results in horizontal
and/or vertical cooperation and the corresponding risks and results are shared.
a) The agreement provides for the sharing of revenue or losses between the parties; and b) an exclusivity relationship derives from the
b) an exclusivity relationship derives from the
Further to the changes above, there will now be the possibility of joint approval of agreements executed by the same party, with common characteristics and evident impossibility of anti-competitive effects. Procedures for such notification are yet to be established and disclosed..
CADE's launching of Public Consultation no. 02/2016 shows the agency's attempts to dialogue with the public, seeking to establish better notification criteria for associative agreements. In this aspect, whilst some issues are clarified other doubts arise from the proposal, which the agency needs to clarify or amend.
Comments on Consultations no. 1/2016 and 2/2016 may be submitted to CADE by May 31,2016.
Link for the Consultations: http://www.cade.gov.br/noticias/cade-submete-a-consulta-publica-novas-regras-para-notificacao-de-contratos-associativos