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Abrinq condemned for infringements against the economic order

Anticompetitive Conduct

CADE condemned brazilian association of toy manufacturers and Synésio Batista da Costa, president of the association, for infringements against the economic order
published: Aug 31, 2015 10:00 AM last modified: Apr 07, 2016 03:36 PM

In the public hearing of 19 August 2015, the Tribunal of the Administrative Council for Economic Defense - CADE condemned Brazilian Association of Toy Manufacturers  (Abrinq for its acronym in Portuguese) and Synésio Batista da Costa, president of the association, for infringements against the economic order (Administrative Proceeding no. 08012.009462/2006-69). Both were fined in BRL 6,300.

In September 2006, Abrinq held a meeting with its associates and other representatives of the sector aiming at discussing the fixation of minimum prices for toys imports; the establishment of fixed individual quotas for importers; the creation of barriers to entry of new agents in the market and obstacles for specific agents to remain in the market.

The meeting gathered high-level officials from the participant companies, including founding partners, presidents and commercial and sales directors.

Among the topics discussed in the meeting, it is worth noting the division of the market and the entry of new players, which were considered as raising competition concerns, according to Commissioner Paulo Burnier, who issued a review vote.

According to the Commissioner, the association acted in order to limit, distort and harm free competition and free initiative. The Commissioner noted that the exchange of information is a usual practice of commercial and class associations, but, at the same time,   this exchange should be limited in order to avoid sharing sensitive information, such as prices, discount policies and client portfolios.

For Burnier, the association extrapolated its legitimate role. “It played a dangerous role, as articulator in the sector. Abrinq and its president enabled the exchange of sensitive information among the economic agents involved in the meeting, such as manufacturers, importers, assemblers and retailers of toys in Brazil”, explained the Commissioner.

Procedure – the analysis by the Brazilian Competition Protection System started in March of 2007, when the case was opened in the former Secretariat of Economic Law (SDE, in its acronym in Portuguese) of the Ministry of Justice.

In CADE’s Tribunal, the case was reported by the former Commissioner Olavo Zago Chinaglia, in July 2011. Chinaglia voted for the filling of the case and was followed by former Commissioner Marcos Paulo Veríssimo. In July 2014, former Commissioner Alessandro Octaviani presented an opinion for the filling of the case – he had requested to review the case after Chinaglia’s vote.

In the session of 29 July 2015, the president of CADE, Vinicius Marques de Carvalho, issued his vote for the condemnation of the parties. In the session of 19 August 2015, Commissioners Márcio de Oliveira Júnior and Alexandre Cordeiro also voted for the condemnation presented along with Commissioner Paulo Burnier.