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Security' Cartel CADE evaluates first leniency agreement

On October 19, 2007, the Administrative Council for Economic Defense (“CADE”) sentenced 16 security service provider companies in the state of Rio Grande do Sul, as well as two trade associations and 16 individuals, for the formation of a cartel (bid rigging and predatory practices which aimed at deterring new companies from entering the market).

The companies were ordered to pay 15% of their gross turnover registered in the previous year at the start of the investigation while individuals are to pay 15% of the fine to be paid by the companies in question. The fine imposed on the trade associations has reached approximately US$ 88,000.

This is being seen as an important landmark in the history of antitrust in Brazil as it is the first case judged that has arisen as a result of the signing of a leniency agreement. CADE understood that the company Antares fulfilled the obligations established in the agreement signed with the Secretariat of Economic Law – SDE in 2003, without imposing the applicable sanctions. Recognition of fulfilment of the agreement still impedes the filing of a corresponding penal suit.

Author: Isabel Andrade and Vinícius Rodrigues, Felsberg e Associados Information:

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