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CADE condemns 19 companies from the Federal District for cartel formation on the fire extinguishers market

Cartel

The fines amount totalize BRL 1.4 million.
published: Feb 06, 2014 09:00 AM last modified: Apr 12, 2016 03:24 PM

The Administrative Council for Economic Defense (CADE) condemned 19 companies from the Federal District (DF) for cartel formation in the fire extinguisher commercialization and maintenance market. The antitrust agency also condemned the Federal District’s Fire Protection Equipment Association (AEECI-DF) and two of its’ directors for taking part on the anticompetitive conduct. The fines amount totalize BRL 1.4 million.

The Reporting Commissioner, Ricardo Ruiz, stated that the companies created, in a previous agreement, guidelines for the prices, selling conditions and profit rates of the products and services provided. The association and its directors tried to legalize the collusion registering a “Convention” in a registry office, stating a 30% profit rate rule, a price chart and the promotion of actions to standardize the competitive behavior.  

According to Ruiz, the price charts were created during a meeting held by the cartel members and sponsored by the association aiming at encouraging the exchange of informations among the companies. According to the Reporting Commissioner, this resulted in a settlement between the companies proved by the registered “Convention” itself.

“The results generated by the agreement between the competitors, under the influence of the Association and its directors, could lead to an overall increase of the prices for the ultimate consumer”, stated Ruiz. The Reporting Commissioner also highlighted that the cartelized companies controlled, at the time, 60% of the market.