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CADE fines Positron in BRL 8 million for anti-competitive conduct

Administrative Proceedings

Decision was issued during the hearing of the Tribunal this Wednesday (12 August)
published: Aug 13, 2020 01:30 PM last modified: Aug 13, 2020 01:30 PM
by International Unit

In the hearing of this Wednesday (12 August), the Administrative Council for Economic Defense (CADE) condemned the company Positron (PST Eletrônica) to pay a fine around BRL 8 million for an economic crime. The company, leader in the Brazilian market of car alarm, signed exclusive contracts with distributors, making it difficult for competitors to enter and develop in the segment.

According to the assessment carried out by the rapporteur commissioner of the proceeding, Luiz Hoffmann, Positron is the only agent in this market that has signed exclusive contracts with distributors, considered the main mean of selling the product, representing 57% of total sales in the sector (wholesalers appear with 7% and others, including direct sales, with 36%).

In the rapporteur’s opinion, the leading position of Positron, along with the good reputation of the brand in relation to consumers, shows that there is no need to establish this type of agreement for the company to compete effectively in the market. On the contrary, it was confirmed that the average prices charged by the company are higher than those offered by its competitors and, even so, it obtains a higher amount of sales in relation to them.

Besides, Positron maintains exclusivity with distributors that have national reach, which enables wide dissemination and commercialization of its products, unlike its competitors.

“By means of its exclusive contracts with distributors, PST reserves to itself a significant portion of the relevant market affected, closing the market for competing alarm manufacturers,” stated the rapporteur. As a result, it falls with other agents in the segment to use less efficient means of selling the product, which, according to Hoffmann, marks the difficulty of competing companies to operate.  

In his vote, in addition to establishing the payment of a fine, the rapporteur commissioner established that the company must remove from its contracts, within the maximum term of 90 days, clauses related to the exclusiveness of car alarm distribution.  

Investigation

The case investigation was initiated on May 2010, from a complaint made by the competitor H-Buster São Paulo Indústria e Comércio. The company accused Positron of two anticompetitive practices: abuse of the right to petition (conduct known worldwide as sham litigation) and closing the market through exclusive contracts signed with distributors.

Regarding the sham litigation conduct, the Tribunal concluded there is not enough evidence to prove abuse of the right to present an administrative or legal petition by Positron that characterizes an anticompetitive conduct.

Access the Administrative Proceedings 08012.005009/2010-60.