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CADE’s General Superintendence initiates administrative proceeding against Claro, Oi and Telefônica

Telecommunications

Investigation analyses alleged coordinated conduct regarding price discrimination and refusal to hire
by Assessoria de Comunicação Social published: Aug 30, 2017 02:26 PM last modified: Aug 30, 2017 02:26 PM

The General Superintendence of the Administrative Council for Economic Defense – CADE published an order in the Official Gazette of 28 August, in which it initiates an administrative proceeding in order to investigate an alleged coordinated conduct between the companies Claro S/A, OI Móvel S/A and Telefônica Brasil S/A in a bid held by the Empresa Brasileira de Correios e Telégrafos. The anticompetitive practices may also have involved unilateral conducts, such as price discrimination and refusal to hire (Administrative Proceeding 08700.011835/2015-02).

The investigation began in 2015 after a complaint made by BT Brasil Serviços de Telecomunicações Ltda. The company accused Claro, Oi and Telefônica of coordinating practices in order to eliminate competition between them, in federal public bids for hiring nationwide telecommunication services. BT Brasil questions the alleged anticompetitive character of these companies’ association in public bids because they also have the control over the access to the local telecommunications’ infrastructures.

The complaint details the suspected anticompetitive practices that seem to have occurred during the Eletronic Auction nº 144/2015, realized by the Empresa Brasileira de Correios e Telégrafos. The alleged offenders have acted as a consortium in this bid, and seem to have discriminated prices and refused to hire the communication circuits necessary to valid BT’s proposals for its participation in the auction. Claro, Oi and Telefônica would have been using a legal instrument (the consortium) to coordinate interests, cause anticompetitive effects and eliminate eventual competitors.

The investigation conducted by CADE’s General Superintendence indicated the presence of sound evidence of anticompetitive practices coordinated by the involved companies. The evidence is related to price discrimination, refusal to hire and to the unjustified coordination as a consortium in the Correios’ auction. By means of this evidence, the General Superintendence decided to initiate the Administrative Proceeding.

The parties will now be notified in order to present their defenses. At the conclusion of the investigation, the General Superintendence will issue an opinion and forward the case to CADE’s Administrative Tribunal, responsible for issuing the final decision.