The Brazilian Competition Authority implements measures in line with WHO recommendations against the spread of the COVID-19

The Brazilian antitrust authority has implemented measures in line with WHO recommendations against the spread of the COVID-19, and activities are being carried out without major impacts, although deadlines in conduct cases are now suspended and delays in certain matters cannot be altogether excluded.

To this date, the activities of the Administrative Council for Economic Defense (Cade) related to merger control, conduct investigation and competition advocacy are running without greater impacts. Over the past few days, Cade has continued to run its proceedings, issuing decisions, opinions and technical notes. On March 18, Cade’s Tribunal held its 155th Judgment Session, and the next Judgement Session scheduled to take place on April 1 is confirmed and expected to be held virtually.

Aware of the gravity faced due to the spread of the COVID-19 around the world, Cade has been taking measures in attention to the recommendations of the World Health Organization. Servants and officials who have recently traveled abroad are in quarantine, and many others are working remotely. Face-to-face meetings are being replaced by videoconferencing and conference calls.

In the merger control front, Cade remains committed to keeping things on track and has announced that all deadlines remain unchanged. However, given the gravity of the Covid-19 outbreak in Brazil, delays may start happening, especially in cases where Cade depends on the collection of data from market participants. In such cases, CADE may face difficulties in establishing contact with the sources of the required data. Moreover, these will likely be granted extensions when requested.

Yet in the merger control front, it will be important to follow how Cade will deal with exceptional cases involving companies that may face financial difficulties due to the impacts of the pandemic on the economy. There are ways according to Cade’s regulations that allow a transaction to be carried out before Cade’s clearance is granted as long as certain criteria are met (the so-called "provisional authorization"), something that is still rarely used in practice. Discussions on the application of the “failing firm theory”, little explored in Cade’s precedents, may also gain relevance in a scenario of acute financial stress.

On the other hand, changes with respect to investigations have taken effect. Following guidance from the federal government, Cade issued a note on March 25 declaring the suspension of all deadlines running against defendants in (i) investigations of anticompetitive conduct, (ii) gun jumping investigations, and (iii) other administrative proceedings for the imposition of procedural penalties. Finally, CADE stressed in the same note that preliminary conduct investigations, proceedings relating to leniency or settlements agreements, and consultation proceedings will continue to run as before.

As the current situation evolves, the parties and their attorneys should follow developments very closely and take action whenever it is recommended on each specific case. Nevertheless, it is praiseworthy that Cade seeks alternatives to keep its work underway and to minimize the impact of the current crisis especially on assorted businesses that depend on its approval to be implemented.

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Lauro Celidonio Gomes dos Reis Neto, Renata Fonseca Zuccolo Giannella, Amadeu Ribeiro, Marcio Soares, Michelle Marques Machado, The Brazilian Competition Authority implements measures in line with WHO recommendations against the spread of the COVID-19, 18 March 2020, e-Competitions Failing firm defence, Art. N° 93835

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