Analysis carried out by Demarest’s Competition team
On February 2, 2021, the Administrative Counsel for Economic Defense (CADE) published its yearbook of activities for 2020, reporting the agency’s performance in its role of competition defense.
Despite the impacts brought by the Covid-19 pandemic, in the scope of mergers and acquisitions (so-called concentration acts), CADE observed an increase of almost 10% in the number of cases reviewed in 2020, with a total of 471 cases, compared to 433 cases in 2019. It is believed that the crisis created by the pandemic may have somehow driven M&A transactions.
The main sectors of the economy that were reviewed by CADE in 2020 were: energy (generation, transmission and distribution), pharmaceuticals, real estate and human health care activities.
Investigations and administrative proceedings have decreased in number: while in 2019 there were 28 proceedings that were ruled on (15 cartels, 10 unilateral conducts, and 3 influencing/promoting uniform behavior), resulting in a total of BRL 792.5 million in fines imposed, in 2020 the number of proceedings ruled on by the Tribunal was about 64% lower, with only 17 cases ruled (14 cartels and only 3 unilateral conducts). The total fines imposed in 2020 did not exceed BRL 138.4 million. As there are many cases already in progress at CADE as well as under analysis for the opening of administrative proceedings, an increase in the number of administrative proceedings to be initiated and ruled on is expected for the year 2021.
With respect to CADE’s internal developments, 2020 was an important year for the agency, having participated more actively in OECD (Organization for Economic Cooperation and Development) meetings, as well as in working groups, debates and discussions with competition authorities of the BRICS nations and institutions such as ICN, UNCTAD and ALIANZA. In line with these discussions, in 2020 CADE also laid out projects for the creation of a Leniency Room, providing a space for confidential meetings, interviews and interrogations, according to internationally recommended parameters.
The results from 2020 are undoubtedly positive for the agency, reinforcing the agency’s stand-out role in a continuous search for improvement. The year 2021 will certainly bring new challenges for CADE.
For us at Demarest, the challenges of 2020 have brought out the best in us: the strength of our teamwork. Specifically for the Competition Practice, 2020 brought excellent results. Our hard work, which despite the need for the adoption of home office work for all employees since March 2020 due to the pandemic, was marked by a reinforcement of the team’s synergy. The year was notable for cases of high complexity and significance to the national economy. We had the opportunity, together with our clients and partners, to submit 37 transactions to CADE, of which no less than 35% were submitted under the Regular Procedure (which is the mandatory procedure for more complex cases, of greater economic concentration). This number places us among the three law firms with the largest number of cases of great complexity before CADE.
In the scope of administrative proceedings, we were successful in dismissing complaints against our clients in two major cartel cases ruled on by CADE. We also formalized the entering into of settlement agreements (TCC) in other cases, as well as assisted clients in obtaining preventive measures before CADE’s Tribunal. In addition, we supported our clients by conducting several training sessions on the importance of Competition Law through the new virtual meeting rooms, in addition to assisting them during the year in numerous consultations about competition issues.
With all this activity, our practice observed significant growth of around 30%, when compared to 2019. Whereas the market was dimissing employees, our competition practice was strengthened with further hires.
This demonstrates the confidence of our clients and partners, who seek highly trained professionals to meet their most challenging demands, reinforcing the confidence they have in our team.
There are many reasons to celebrate the success of so much work. Our team is able to, together with our clients and partners, contribute to achieving the objectives of their business with quality and excellence in their mandates, from the simplest to the most complex, all the while transcending possibilities.