Competition & Antitrust - Brazil
CADE establishes submission criteria for associative agreements
Authors
Contributed by Souza, Cescon, Barrieu & Flesch Advogados
Fabíola Cammarota de Abreu
November 27 2014
On October 29 2014 the Administrative Council for Economic Defence (CADE) approved Resolution
10, which sets out the criteria for submitting associative agreements for CADE approval.
In accordance with Article 90(IV) of the Antitrust Law (12.529/2011), which entered into force on May 29
2012, associative agreements are considered concentrations and, once the submission threshold
(ie, the turnover of the economic groups involved) has been met, are subject to CADE's prior approval.
Joyce Honda
According to Resolution 10, an agreement will be considered an associative agreement under the
Antitrust Law if:
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the agreement's duration exceeds two years, either as initial term or total term that results from the
renewal of the initial term – if the initial term is less than two years, the submission must be made
when the two-year term is reached or exceeded; and
there is horizontal concentration or vertical integration with respect to the activities carried out by
the parties involved or a sharing of risks that results in the parties having an interdependent
relationship.
For the purposes of Resolution 10, the following circumstances are presumed to be horizontal or
vertical cooperation or a sharing of risks that result in an interdependent relationship:
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agreements in which the parties are horizontally related and the resulting share of the relevant
market is equal to or exceeds 20%; and
agreements in which the parties are vertically related and one of them holds 30% or more of the
relevant market and the agreement contemplates:
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the sharing of profits and loss between the parties; or
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an exclusive relationship.
The new rules will come into effect on January 5 2015. As of this date, companies that meet the
submission criteria (ie, the turnover of the groups involved) must analyse their contracts carefully
before they are executed, to determine whether a merger filing is required – in which case it must be
made before the agreement is implemented. Once Resolution 10 comes into force, parties whose
agreements meet the specifications outlined above and that do not notify CADE may be subject to
fines of up to R60 million and may have previously implemented acts annulled.
For further information on this topic please contact Fabíola Cammarota de Abreu or
Joyce Midori Honda at Souza, Cescon, Barrieu & Flesch Advogados by telephone (+55 11 3089
6500), fax (+55 11 3089 6565) or email ([email protected]
or [email protected]). The Souza, Cescon, Barrieu & Flesch Advogados website can be
accessed at www.scbf.com.br.
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