Keywords: CADE, cartel investigation, cement market

In the 36th Ordinary Judgment Session, held by the Administrative Council for Economic Defense ("CADE") on January 22, 2014, Commissioner Alessandro Octaviani Luis suggested the imposition of a record-breaking fine for cartel formation in Brazil, totaling more than US $1 billion.

The case refers to an alleged cartel formation by companies in the cement market that has supposedly caused substantial losses for consumers in Brazil. Some companies from the cement and concrete sectors have already been targeted and punished by CADE in previous cases, which may be considered as an aggravating factor in the calculation of the applicable penalties. In addition to fines, Commissioner Alessandro Octaviani Luis also suggested the divesture of assets in order to enable the re-establishment of a competitive environment.

During the judgment – which lasted for approximately twelve hours and was interrupted due to the request of Commissioner Marcio Oliveira Junior to further analyze the records of the case – Commissioner Alessandro Octaviani Luis highlighted the institutionalization of the cartel. According to his vote, the companies involved in the practice replaced a competition-oriented culture with a collusion-oriented culture. Also, the Commissioner emphasized the existence of cartels in the same markets outside Brazil.

The case is now pending a final decision and there is no date for the continuation of the judgment, but the procedure demonstrates the continuing investigation into cartels in Brazil. During the same judgment session, for example, CADE also punished a cartel among drugstores, in which the authority understood that competitors conspired to raise prices. The fines imposed in this case totaled approximately US $600,000.

Originally published January 27, 2014

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