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CADE’s General Superintendence opens Administrative Proceeding against Instituto Aço Brasil

Administrative Proceeding

The Proceeding investigates alleged abuse of right of petition with anti-competitive purpose
published: Jun 01, 2016 11:47 AM last modified: Jun 01, 2016 11:48 AM

CADE’s General Superintendence opened, on Tuesday, 24 May, an Administrative Proceeding to investigate alleged anticompetitive conduct perpetrated by Instituto Aço Brasil – IABr. The investigated party would have practiced abuse of the right to petition to damage competitors in the market of steel bars – this practice is internationally known as sham litigation (Administrative Proceeding No. 08012.001594/2011-18).

The case began in 2011, from a complaint presented by Associação Brasileira das Empresas Importadoras e Fabricantes de Aço – Abrifa, which accused IABr of filling several lawsuits to prevent companies established in the Brazilian market from importing steel bars.

According to the Opinion issued by the General Superintendence, IABr would have filed provisional measures for the anticipated production of evidence, with preliminary injunctions, questioning if the goods imported were in conformity with the Brazilian safety technical standards. As result of these actions, the loads of imported steel bars had been retained in the ports until the execution of technical examinations, causing numerous expenses to the importers and preventing the circulation of these goods in Brazil. 

The General Superintendence verified that a big part of the provisional measures was formulated under false or imprecise information; some of them were filled repeatedly, in different districts, with the only intention of preventing the competition on the steel bars market.

With the opening of the Administrative Proceeding, the investigated party will be notified to present its defense. At the end of the discovery phase, the General Superintendence will issue an Opinion either for the condemnation or for the closing of the case; it will then be submitted to CADE’s Tribunal, which is responsible for the final decision.