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General Superintendence suggest condemnation in four cases of anticompetitive conduct

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20/08/2013 21:00 Demarest News

The General Superintendence - SG of the Administrative Council for Economic Defense - CADE, suggested the condemnation of the defendants in three administrative proceedings involving accusations of price fixing and in a fourth case regarding cartel formation.

With respect to price charts, it is worth mentioning that this practice has been considered by the antitrust authorities as a mechanism to hinder free competition. Especially on markets where the supply structure is dispersed, in which is more difficult to coordinate a classic cartel, price charts have been frequently used as an instrument to standardize the conduct of competitors, reason why the antitrust authorities are constantly condemning individuals and companies involved in such practices.

It should be noted that cartel cases are considered by the Brazilian System for Competition Defense as the main focus of the reprimand for anticompetitive conducts.
Please find below a brief synthesis of the cases where SG recently recommended the condemnation of the parties involved. The cases were forwarded to CADE's Tribunal that will decide whether parties are condemned or the files are archived.
Administrative Process no. 08012.000415/2003-15
On January 24th, 2003, the extinct Department of Economic Defense from the Secretariat for Economic Law - SDE received an anonymous complaint about an alleged cartel involving driving schools at the Federal District that would be practicing uniform prices.
In July, 2012, an Administrative Process was initiated to investigate the existence of anticompetitive conducts deriving from price charts drawn up by the Sindicato das Auto e Moto Escolas e Centros de Formação de Condutores Classes "A", "B", "AB" do Distrito Federal - SINDAUTO, a syndicate for driving schools, with the purpose to fix prices to be charged by the driving schools for hiring several services such as practical driving lessons and exams.
On July 13th, 2013, SG suggested the condemnation of SINDAUTO, as well as of three other individuals that signed the price charts, since it concluded for the existence of imposition of prices by the Defendants by means of the price chart.
Administrative Proceeding no. 08700.000719/2008-21
On February 2nd, 2008, CADE issued an Official letter to SDE, requesting the investigation of alleged anticompetitive practices by the company Staff Master Segurança e Vigilância Ltda., in view of the complaint of Sindicato das Empresas de Segurança Privada, Segurança Eletrônica, Serviços de Escolta e Cursos de Formação pelo Estado de São Paulo - SEVESP.
SESVEP alleged that Staff Master Segurança e Vigilância Ltda. was attempting to restrict free competition by establishing unenforceable prices for services in the market.
However, during the investigation, it remained proved that predatory prices were not practiced by the company Staff Master Segurança e Vigilância Ltda. Actually, SDE concluded that SEVESP, alongside with its President and Vice President, the Defendants in the Administrative Process in reference, were establishing minimum prices to SEVESP's associated companies, through the disclosure of a study ordered to Fundação Getúlio Vargas - FGV.
The standardized conduct imposed by the Defendants aimed to restrain competition in public bids for the hiring of security services.
In June 13th, 2013, SG recommended the condemnation of the Defendants, since the agency concluded that FGV's study was used as an instrument to impose the adoption of uniform commercial conduct by the associated companies.
Administrative Process no. 08012.004365/2010-66
The General Superintendence published on June 13th, 2013, an official opinion suggesting the condemnation of 12 drugstores due to cartel formation in Curitibanos, in the state of Santa Catarina.
The process was initiated in April 26th, 2010, when SDE started to investigate the existence of possible violation to the economic order caused by the development and dissemination of discount rotation schemes and fixing of discount percentages to be practiced by the drugstores.
After analyzing all evidences, SG suggested the condemnation of the defendants.
Administrative Process no. 08012.000261/2011-63
Six tourism companies are under investigation due to price fixing by means of charts.

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