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Investigation techniques for cartels disband are subject of discussion at CADE


The Panel of the Brazilian Anticartel Week considered the experience of bodies that participated in the Dubai Operation
published: Oct 14, 2020 09:12 PM last modified: Oct 14, 2020 09:12 PM
by International Unit

The Administrative Council for Economic Defense (CADE) has discussed on Tuesday, 6 October 2020, investigation techniques used for disbanding cartels.  The panel, which is part of a series of debates of the Brazilian Anticartel Week (SNCC), took as a basis the experiences of the agency, the Prosecution Services of the Federal District (MPDFT) and the Federal Police (PF) in the Dubai Operation, that disbanded a fuel cartel in the Federal District.

The panel was dedicated to civil servants and had the participations of the general coordinator of antitrust analysis of CADE, Ravvi Augusto de Abreu C. Madruga, the public prosecutors Áurea Regina Ramim and Carlos Augusto Silva Nina from MPDFT, and the chief of police João Thiago Oliveira Pinho from the Federal Police (PF).

The Dubai Operation emerged in November 2015. In a cooperation task, CADE, PF and MPDFT issued 7 arrest warrants, 25 bench warrants and 44 search and seizure warrants in domiciles and offices of individuals and firms involved with the alleged cartel in the market of fuel of the Federal District.

During the panel, members of the three bodies described the investigation techniques applied and the ways they coordinated to operate in a collaborative manner. "The sharing of evidences by the MPDFT and the PF with CADE at the initial stages of the investigation provided significant information that allowed CADE to decide for the first measures to be adopted concerning a firm investigated by cartel," stated Ravvi Madruga.

CADE understands that the evidences at that stage of investigations were sufficient to prove group Cascol had a dominant market position with nearly 30% of fuel stations in the Federal District. In addition, there were both evidences of the group's participation in the alleged cartel and of its leading position in the collusion. Therefore, aiming at reestablishing competition in the segment, CADE's General Superintendence decided to adopt preventive measure appointing a provisional manager to independently administrate fuel stations owned by the Cascol group with the brand BR.

The operation allowed gathering a considerable amount of evidences that nowadays constitute part of an administrative proceeding in course at CADE. The case is currently under the General Superintendence's analysis. Afterwards, it will be submitted to the Administrative Tribunal of the agency, which is responsible for giving a final decision.

About the SNCC

Cartel is any agreement or concerted practice between competitors to fix prices, divide markets, restrict production or rig bids in public procurements. By implying price rise and supply restrictions, without any economic benefit, cartels result in severe harm to consumers, making goods and services unavailable for some and unnecessarily expensive for others. Due to the several harms it causes, cartel is considered the most serious economic crime.

Knowing the importance of competition defence in this scenario, from 5 to 9 October, CADE held the Brazilian Anticartel Week. The series of debates had the participation of national and international agents, who shared their experiences and best investigation techniques to allow Brazil to continue promoting the proper functioning of markets.