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CADE’s General-Superintendence issues opinion for condemnation of cathode-ray tubes’ cartel

Cartel

Infringement would have occurred, at least, between 1999 and 2007
published: Nov 17, 2015 05:23 PM last modified: Apr 11, 2016 05:56 PM

The General-Superintendence of the Administrative Council for Economic Defense – CADE recommended in a technical opinion published on the Brazilian Official Gazette of 16 November 2015, the condemnation of the companies Asahi Glass Co. Ltd - AGC, Hankuk Electric Glass Co. Ltd. - HEG, Nippon Electric Glass Co. Ltd. – NEG and Schott AG, in addition to seven individuals, for international cartel with effects in Brazil, in the market of cathode-ray tubes – CRT. (Administrative Procedure nº 08012.005930/2009-79).

Present in almost all Brazilian homes and companies, the CRT is a glass structure that forms the image tube of TV sets and monitors used prior to the technological change to plasma, LCD or Led screens. Until today, the tube TV is the only option for 25.9 million of Brazilian homes, according to the Brazilian Institute of Geography and Statistics (IBGE in its Portuguese acronym). 

To the General-Superintendence, the parties, controlling a substantial part of the world production of glass components for CRT, kept regular contact with the aim of coordinating, supporting, assisting and cooperating among them to fix prices, production, client allocation and controlling the insertion of technological innovations in the market. 

The coordination would have occurred, at least, between 1999 and 2007. As for the duration, diversity and complementarity of the acts, the conduct constitutes what the antitrust legal doctrine refers to as “hardcore cartel”, a serious infringement to the economic order.   

According to the General-Superintendence, the cartel has had impact on the national market of tube TVs and screens, whose demand was increasing during the period of the conduct.
 
The effects of the practice may have been direct, in the cases in which it was possible to conclude that imports of the product or service offered by the cartel members effectively entered in Brazil; or indirect, in the cases in which imported products or services that have used inputs offered by the cartel members entered in Brazil.   

Investigations abroad

The CRT cartel has been investigated and condemned by competition authorities in Europe and South Korea. On those jurisdictions, the assessment of the anticompetitive conducts has generally included the same conducts and companies investigated by CADE in Brazil. The European and South Korean decisions were used as documentary evidence in CADE’s proceeding. 

The case was submitted for judgment by CADE’s Administrative Tribunal, which is responsible for the final decision. If condemned, the companies are subject to the payment of fines from 0.1 to 20 percent of their profit on that activity, in addition to other sanctions provided by the Brazilian Competition Law (Law 12.529/2011).