1. Competition Law in Latin America: Lessons to Learn
LEVY & SALOMÃO
A D V O G A D O S
Competition Law in Latin America: Lessons to Learn
The Brazilian experience
Ana Paula Martinez
June 15, 2012 – Oxford

2. Why competition is important?
LEVY & SALOMÃO
A D V O G A D O S
Why competition is important?

3. Competition and Innovation: Inverted U Relationship
LEVY & SALOMÃO
A D V O G A D O S
Competition and Innovation: Inverted U Relationship

4. LEVY & SALOMÃO
A D V O G A D O S
Lesson No. 1
Competition law can do little for competition in the absence of a market-oriented framework

5. Landmarks of Competition Law & Policy in Brazil
LEVY & SALOMÃO
A D V O G A D O S
Landmarks of Competition Law & Policy in Brazil
1962
1994
2003
2012

6. A mandatory post-merger system is extremely ineffective
LEVY & SALOMÃO
A D V O G A D O S
Lesson No. 2
A mandatory post-merger system is extremely ineffective

7. LEVY & SALOMÃO
A D V O G A D O S
Lesson No. 2

8. LEVY & SALOMÃO
A D V O G A D O S
Lesson No. 3
The agency needs to have adequate investigatory tools and sanctions should be designed and effectively applied to deter violations of the law

9. Law amended in 2000 to include dawn raid powers and leniency agreement
LEVY & SALOMÃO
A D V O G A D O S
Law amended in 2000 to include dawn raid powers and leniency agreement
First leniency agreement executed in More than 20 agreements executed from
More than 300 search and seizure warrants served
Direct evidence: (i) supports criminal charges; (ii) allows the competition agency to impose substantial fines; (iii) supports the administrative rulings before the Judiciary
Administrative and criminal enforcement ensures deterrence

10. Estratégia
Ações

12. Real Case: Gasoline Retail Market
LEVY & SALOMÃO
A D V O G A D O S
Real Case: Gasoline Retail Market
Operação Pacto 274: Economia de R$ 32 milhões
Evolução do preço e do consumo de gasolina tipo C em João Pessoa

13. Case Amount Industrial Gases Cartels (2010) US$ 1.3 billion
LEVY & SALOMÃO
A D V O G A D O S
Case
Amount
Industrial Gases Cartels (2010)
US$ 1.3 billion
Abuse of market power (2009)
US$ 250 million
Security Services Cartel (2007)
US$ 25million
Vitamines Cartel (2007)
US$ 10 million
Crushed-Rock Cartel (2005)
US$ 45 million
Steel Cartel (2005)
US$ 210 million
Flat Steel Cartel (1999)
US$ 38 million
IT Services Settlement (2011)
US$ 20 million
Compressors Settlement (2009)
US$ 60 million
Plastic Bags Settlement (2008)
US$ 15 million
Cement Settlement (2007)
US$ 25 million

14. Multimillionaire fines: is this the right way?
LEVY & SALOMÃO
A D V O G A D O S
Multimillionaire fines: is this the right way?

15. Cooperation among agencies is crucial to ensure outstanding results
LEVY & SALOMÃO
A D V O G A D O S
Lesson No. 4
Cooperation among agencies is crucial to ensure outstanding results

16. Leading Case: Rio Madeira (2007)
LEVY & SALOMÃO
A D V O G A D O S
Leading Case: Rio Madeira (2007)
A major Brazilian construction company entered into exclusivity agreements with all turbine suppliers with plants in Brazil prohibiting them to deal with other bidders in connection with the Rio Madeira energy bid
The competition agency adopted an interim measure to suspend the effectiveness of the exclusivity contracts; Settlement reached before the bid took place following intense cooperation between enforcers and regulators
Due to competition, the final price for the energy was 35% lower than the cap price

17. Leading Case: Rio Madeira
LEVY & SALOMÃO
A D V O G A D O S
Leading Case: Rio Madeira
Total savings for the 30 years of the concession agreement are estimated in BRL16.4 billion 6

18. Develop a wider culture of competition
LEVY & SALOMÃO
A D V O G A D O S
Lesson No. 5
Develop a wider culture of competition

19. Develop a wider culture of competition
LEVY & SALOMÃO
A D V O G A D O S
Lesson No. 5
Develop a wider culture of competition

20. What to expect now? LEVY & SALOMÃO A D V O G A D O S

21. Novo CADE LEVY & SALOMÃO Marcos Veríssimo Alessandro Octaviani
A D V O G A D O S
Novo CADE
Ana Frazão
Eduardo Pontual
Ricardo Ruiz
Elvino Mendonça
Marcos Veríssimo
Alessandro Octaviani 21

22. Increased number of complex mergers filed (market consolidation)
LEVY & SALOMÃO
A D V O G A D O S
Greatest challenge: implementation of the pre-merger regime and restructuring of the system
Increased number of complex mergers filed (market consolidation)
Top priority: prosecuting bid-rigging
Next frontier: Private claims

23. Ana Paula Martinez amartinez@levysalomao.com.br +55 11 3555 5059
LEVY & SALOMÃO
A D V O G A D O S
Ana Paula Martinez