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

Why competition is important? LEVY & SALOMÃO A D V O G A D O S Why competition is important? www.levysalomao.com.br

Competition and Innovation: Inverted U Relationship LEVY & SALOMÃO A D V O G A D O S Competition and Innovation: Inverted U Relationship www.levysalomao.com.br

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 www.levysalomao.com.br

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 www.levysalomao.com.br

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 www.levysalomao.com.br

LEVY & SALOMÃO A D V O G A D O S Lesson No. 2 www.levysalomao.com.br

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 www.levysalomao.com.br

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 2003. More than 20 agreements executed from 2003-2011 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 www.levysalomao.com.br

Estratégia Ações

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 www.levysalomao.com.br

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 www.levysalomao.com.br

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? www.levysalomao.com.br

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 www.levysalomao.com.br

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 www.levysalomao.com.br

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 www.levysalomao.com.br

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 www.levysalomao.com.br

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 www.levysalomao.com.br

What to expect now? LEVY & SALOMÃO A D V O G A D O S www.levysalomao.com.br

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

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 www.levysalomao.com.br

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 amartinez@levysalomao.com.br +55 11 3555 5059