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CADE’s General Superintendence asks for the condemnation of companies in the mobile recharge market

Administrative Proceeding

The irregularities may have occurred in the distribution market of electronic recharges for prepaid mobile phones
published: Sep 30, 2016 11:04 AM last modified: Sep 30, 2016 11:04 AM

The General Superintendence of the Administrative Council for Economic Defense - CADE issued an official opinion, published on the Federal Official Gazette on 23 September, recommending the condemnation of three companies and nine individuals for cartel activity in the distribution market of electronic rechargers for mobile phones (Administrative Proceeding n° 08012.002812/2010-42).

The companies involved in the anticompetitive conduct are Check Express S/A, Rede Digital Comércio e Serviços Ltda. (currently Rede de Transações Eletrônicas Ltda.) and Rede Ponto Certo Tecnologia e Serviços Ltda.

 The investigation, which began in 2010 with the signature of a leniency agreement between the companies, CADE and the Prosecutor’s Office from the state of São Paulo. The irregularities may have occurred at least between the years of 2007 – When the market’s turnover was around BRL 3.5 billion – and 2009.

 During the instruction of the proceeding, two Cease and Desist Agreements (TCC in its acronym in Portuguese) were signed between CADE, RV Tecnologia e Sistemas S/A, Getnet S/A and nine individuals linked to these companies.

Based on the evidence obtained from the leniency agreement, the TCCs and the investigation, the General Superintendence concluded that the represented parties have defined nonaggression policies among them to prevent the transfer of customers in points of sale; fixed the percentage discounts applicable to the points of sale to avoid the dispute of prices and reduce competition among the distributors; and elaborated and list of defaulting points of sale, in order to reduce their operation risks.

The evidence found consisted in the exchange of e-mails and reports of meetings between the competitors.

The administrative proceeding will be judged now by CADE’s Tribunal, responsible for issuing the final decision. If the companies are condemned, they shall pay a fine that can reach up to 20% of the gross revenues in the year preceding the commencement of proceedings. The individuals involved are subject to the payment of a fine of 1% to 20% of that applied to the company to which they are related.