Brazil: CADE Issues Five New Resolutions

Last Updated: 29 September 2010
Article by Bruno D. Werneck and Gustavo Flausino Coelho

Originally published September 28, 2010

Keywords:CADE, new resolutions, internal regulation

On September 24, 2010, five new resolutions enacted by the Administrative Council for Economic Defense (CADE), an agency of the government of Brazil, were published in the Brazilian Official Gazette (Gazette). These resolutions aim to improve the agency's dynamics and increase the effectiveness of its decisions. They also create more transparency and consistency for the publication of decisions and for defining the time frame in which to challenge decisions. The resolutions also created the Close Audit Program (Programa Malha Fina) with the purpose of controlling the veracity of the information provided to CADE by the companies under review in the agency's administrative proceedings.

The Resolution no. 54/2010 amends CADE's Internal Regulation by the approval of the Amendment no. 01/2010, which eliminates the obligation to publish CADE's decisions in the Gazette. Before the resolution, the term to challenge decisions would start after the publication of the decision in the Gazette. However, from now on after enactment of Resolution no. 54/2010, the legal term to challenge decisions starts with the publication of the minutes of CADE's judgment session in the Gazette. These minutes are now the proper vehicle to communicate decisions to the parties.

The change sets forth a common reference for definition of the time frame in which to challenge decisions. The goal is avoiding unfairness, since the decisions of the same judgment session are commonly published on different days. Beginning with the next session, the minutes will have more information concerning the judgment and they shall be published within two days. The votes of the Commissioners and the whole text of decisions will remain available on CADE's website (

The Resolution no. 55/2010 standardizes the summaries of decisions from CADE. Besides the standardization, which will give a greater coherence and consistency to the information provided by CADE, the goal of this resolution is to make both research and collecting of the data regarding judgment proceedings easier. The resolution requires that judgments shall use broad and clear terms, as well as key-words for a better understanding of the cases and the elaboration of statistical studies.

Following the trend to define legal terms more accurately, the Resolution no. 56/2010 provides for the legal term during the collective vacation period. This resolution approves Amendment no. 02/2010, which modifies Article 34 of CADE's Internal Regulation. Thus, the legal term shall be suspended during the collective vacation period, from December 20 until January 6.

The Resolution no. 57/2010 modifies, by means of Amendment no. 03/2010, the provisions regarding the issuance of infraction notices for refusal, omission or unjustified delay on offering information or documents required by the authorities of the Brazilian Antitrust System or any other governmental authority applying the Antitrust Law. The infraction notice shall now include: (i) the penalty defined by the Reporting Commissioner or CADE's Board, assessed from R$5,320.50 (approximately US$3,150.00) to R$9,576,900.00 (approximately US$5,633,500.00); (ii) the five-day term for payment; (iii) information that the payment shall be made as set forth by the Federal Administration Board for the Defense of Diffused Rights Fund; and (iv) the information that the party has the right to challenge the infraction notice during the five-day term for payment.

The Resolution no. 58/2010 creates the Close Audit Program (Programa Malha Fina) for the purpose of checking the information given to CADE by the companies under merger review and administrative proceedings to investigate anticompetitive practices. The analysis of the information will be performed by the Decision Enforcement Division of the CADE's Attorney General's Office (SCD/ProCADE), which will also be able to use all the evidence allowed by law and to request the assistance of the Economic Studies Department of CADE (DEE) when necessary.

The resolution sets forth that at least one administrative proceeding shall be randomly selected for audit each month. Regarding the penalties applicable to the parties, there are two possibilities depending on the circumstances of each case: (i) imposition of a fine of from R$5,320.50 (approximately US$3,150.00) to R$9,576,900.00 (approximately US$5,633,500.00); and/or (ii) review of the merger clearance.

It is important to highlight that all the new resolutions were previously submitted for the analysis of the market during a period of public consultation.

Summarizing, CADE approved last week five new resolutions aiming to improve the agency's enforcement of competition law. By modifying the definition of its judgment time frame, CADE seeks to improve the proceedings under its analysis. By creating penalties in connection with improper information, the antitrust authority intends to increase the effectiveness and quality of its decisions.

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