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CADE condemns Union of security companies for price fixing

Anticompetitive conduct

Fines imposed totalize BRL 383 thousand
published: Aug 27, 2014 10:00 AM last modified: May 03, 2016 04:08 PM
The Administrative Council for Economic Defense – CADE condemned, on 6 August, the Union of Private Security Companies, Electronic Security, Escort Services and Training Courses of the State of São Paulo – SESVESP for influencing the adoption of a uniform price among providers of private security services that participated in public bids in the State of São Paulo. The Union’s president and vice-president were also accounted for the conduct. Fines totalize BRL 383 thousand.

The anticompetitive practice consisted of imposing a table with minimum prices to be charged for the provision of services of private security. The prices would have been settled based on an academic study developed by request of the Union. According to the entity, it would not be possible to charge lower prices than the ones suggested by the table.

The Administrative Proceeding no. 08700.000719/2008-21 began after the Union itself came to CADE to report the alleged practice of unfeasible prices by companies that took part in public bids in the State of São Paulo.

However, along the analysis of the case, CADE detected that there were no anticompetitive practice by the companies. Nevertheless, the imposition of minimum prices by the Union was indeed an anticompetitive conduct.

To impose the table, the Union fined associates that did not adopt the established rates and also pursued the disqualification of proposals presented in public procurements with prices lower than the one in the table.

“These attitudes evidenced a deviation in the function of the study, which could be only informative or statistical. In the hands of the Union, the study became an instrument of coercion and price fixing”, stated the Reporting Commissioner, Alessandro Octaviani.

The Commissioner also highlighted that, by establishing a minimum price, the Union induced the increase of prices charged by the companies, and, consequently, of the cost of services to bidders.