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Brazilian Antitrust Law has been refined

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Although Brazilian antitrust rules follow the example of US antitrust law, the pioneers in the subject were not them, but their Canadian neighbors, since the first known antitrust law was published in 1889, in Canada. By the way, this was the year in which Brazil ceased to be an empire, when the Republic was proclaimed on November 15, 1889, by Marshal Deodoro da Fonseca.

This Canadian law was called the Act for the prevention and suppression of combinations formed in restraint of trade, with the primary purpose of combating the formation of cartels, defining price fixing and other agreements between competitors as abusive practices, which was later incorporated into the Criminal Code of Canada. Currently, the Competition Act is the prevailing competition legislation in the country. It was sanctioned in 1986 and amended in April 2022 through the Budget Implementation Act (BIA), in particular regarding the following: (i) the criminalization of wage-fixing and no-poach labour agreements, (ii) a significant increase to fines and monetary penalties, (iii) adding drip pricing (a pricing technique used mainly in e-commerce, vehicle rentals etc., where only part of an item's price is advertised, with the total amount revealed at the end of the buying process, thus significantly increasing the end price to be paid by the consumer) to explicitly prohibited deceptive marketing practices, (iv) clarifying the scope of abuse of dominance and expanding private rights of action to abuse of dominance claims, and (v) the addition of considerations inspired from digital markets when assessing impacts on competition in regards to merger review and other reviewable practices.

Even though they were not the pioneers, the USA did not take long and, on July 2, 1890, the famous Sherman Act was passed, which was then supplemented by the Clayton Act in 1914, and the creation of the Federal Trade Commission (FTC), the US antitrust agency.

Here is an interesting comparison. While the US law originated from the Common Law system (where the main source of law tends to be custom or case law) and its main source of law is case law (court decisions), Canadian law also originated, in general, from Common Law, but with one particular difference. While the United States has 50 States, and the law practiced in them comes from common law, Canada has 10 provinces, but only one of them, the province of Quebec, had its legal system based on Civil Law, due to the French influence, being its main source of law. The law governing the other nine provinces originated from Common Law.

Taking the Sherman Act as a mirror, Brazil began to look more seriously at the issue after Law 8884, of June 11, 1994, was passed, which became the Brazilian Antitrust Law – including transforming the Administrative Council for Economic Defense (CADE) in a special agency, with greater autonomy to exercise its role of monitoring and sanctioning body against antitrust and economic crimes.

Since then, CADE began to analyze mergers, not only by companies in the process of consolidation or acquisition, but even in the purchase of certain products, whose market dominance would greatly impact free competition. CADE also interfered with cartel and oligopoly schemes, involving nationally and internationally renowned companies.

Finally, on November 30, 2011, Law 12,529 was passed, which became the Antitrust Law currently in force in Brazil, although, due to the delayed effective date introduced by the legislator (time interval between the date of publication of a law and the date on which it enters into force), it only entered into force 180 days later. Our law was so influenced by that of the US that it imported some interesting instruments from it, that were still unprecedented in Brazil, such as the leniency agreement.

So, on November 16, 2022, Law 14,470 was passed, which amended the Antitrust Law by adding the following content:

Article 47. The aggrieved parties, by themselves or by someone legally entitled referred to in Article 82 of Law No. 8078, of September 11, 1990 , may take legal action in defense of their individual interests or individual homogeneous interests, so that the practices constituting violations to the economic order cease, and compensation for the losses and damages suffered be received, regardless of the investigation or administrative proceeding, which will not be suspended due to court action.

Article 47. The aggrieved parties, by themselves or by someone legally entitled referred to in Article 82 of Law No. 8078, of September 11, 1990 , may take legal action in defense of their individual interests or individual homogeneous interests, so that the practices constituting violations to the economic order cease, and compensation for the losses and damages suffered be received, regardless of the investigation or administrative proceeding, which will not be suspended due to court action.
Paragraph 1. The aggrieved parties will be entitled to double damages due to violations of the economic order provided for in Items I and II of Paragraph 3 of Article 36 of this Law, without prejudice to the sanctions applied in administrative and criminal proceedings.
Paragraph 2. The provisions of paragraph 1 of this article do not apply to co-plaintiffs of violations of the economic order who have entered into a leniency agreement or term of commitment to cease the practice the compliance with which has been declared by Cade, who will only be liable for damages caused to the aggrieved parties.
Paragraph 3. The parties to the leniency agreement and the term of commitment to cease the practice are only responsible for the damage they caused to the aggrieved parties, not being jointly and severally liable for the damage caused by the other perpetrators of the violation of the economic order.
Paragraph 4. The transfer of overprice is not presumed in cases of violations of the economic order provided for in items I and II of Paragraph 3 of Article 36 of this Law, with the proof being up to the defendant who alleges it.”

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Article 46-A . When the claim for damages arises from the right provided for in Article 47 of this Law, the statute of limitations will not run during the course of the investigation or administrative proceeding within Cade.
Paragraph 1. The claim for damages caused by violations of the economic order provided for in Article 36 of this Law is time-barred in 5 years, starting from the unequivocal knowledge of the illicit act.
Paragraph 2. The unequivocal knowledge of the illicit act is considered to have occurred when the final decision of the administrative proceeding is published by Cade.

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Article 47-A . The decision of the Full Court referred to in Article 93 of this Law is able to substantiate the granting of guardianship of evidence, allowing the judge to decide on the actions provided for in Article 47 of this Law.

The aggravation of penalties and the increase in zeal with those harmed by violations of the economic order, described in Article 36 of the aforementioned law, since the aggrieved parties, from now on, are entitled to double compensation for all damages caused to them.

In addition, the exclusion of joint and several liability for those who enter into leniency agreements or terms of a consent decree with CADE was also established.

The definition of the five-year statute of limitations (5 years) for any claim for damages caused by violations of the economic order provided for in Article 36 was another innovation brought. It is certain that, according to the new text, while the case is under judgment at CADE, it is suspended, only starting on the occasion of the publication of the final judgment of the administrative proceeding.

The non-presumption of the transfer of overprice is another innovation to make it clearer that it becomes the defendant's burden of proof.

And, finally, the decision issued by CADE's full court becomes capable of justifying the granting of guardianship of evidence, allowing preliminary decision.

These are innovations that contribute to further refine Brazilian antitrust law.

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