Cartel Workshop – Panama 2012
Cartel Case Initiation
Diogo Thomson
Deputy Superintendent of CADE - Brazil
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Formal Complaint;
Informal complaints: anonymous, email, complaint-click, verbal,
consultations with other institutions, petition right;
Complaint by other organizations (government bodies, public
prosecutors, federal police, NGOs, consumer agencies);
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Ex officio;
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Leniency;
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Art. 66, §6 Law no. 12.529/11 – formal complaint made by the
National Congress Commission, the Deputy Chamber, the Senate,
SEAE – Ministry of Economy, Regulatory agencies and CADE´s
Legal Service
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Formal Complaint
- More usual for unilateral cases than for cartels;
- It´s confidential while being screened and during a period of better
assessment and investigation of the facts (it can be done informally or
formally through preparatory procedure or administrative inquiry), before
the opening of administrative proceedings;
- After the beginning of the investigation the complainant becomes the
interested party, without any procedural rights nevertheless.
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Ex officio:
- When a complaint or a notice by other organization does not contain
all the necessary elements to open a file immediately or, at least, to
allow a dawn raid authorization;
- Anonymous complaint, media news or public facts may be the tipoff for an ex officio screening, market study and/or investigation of
facts that could be evidence of cartel;
- Typical ways: After sector inquiries and market studies.
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Leniency
-33 cases started by leniency since 2003. 10 in 2012. (Mainly
international cartel cases)
-28 still processing within General Superintendence (25% of total ongoing
cartel cases).
Incentives for leniency in Brazil:
-Immunity for administrative and criminal sanctions of cartel. After L.
12529/11, criminal immunity also for bid rigging cartels and other related
public procurement frauds and gang crime.
-Transparency of requirements and of the access to authorities
-Increase of International reputation of Brazil authorities and leniency
program
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Leniency (cont.)
Advantages of a case started by leniency:
-Confession
-Cooperation during the investigation and after the open of the file
until judgment.
-Better description and assessment of facts and evidences and better
preparation for searches and inspections
Main Challenges of the Program in Brazil:
-Interplay with settlements and with other cooperative defendants (2nd
and 3rd in)
-Program outreach for national cartels (mainly bid rigging, smaller and
business and regional markets)
-Deal with another crimes and administrative infringements unreached
by immunity: corruption, bribery, money laundry, etc..
Before - Two different authorities (SDE and CADE)
SDE
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- Leniency: Negotiated only by the Secretary of Economic Law and his chief of staff.
- Other ways of initiation: Short screening by the Director of the Antitrust Division
office and then the case was sent to one of the division’s units.
- Units: the 6 units were responsible for the preliminary investigations. Also the unit
decided whether to propose the opening of a file or to dismiss a case. Finally, the
same unit instructed the case after the opening.
-Difficulties: scarce resources from lack of specialization, which resulted in a less
efficient and slow responses to the complaints, raise in the amount of time a
proceeding stayed in the unit, increase in the total backlog related to the unit having
to handle less relevant matters, and difficulties in prioritizing and case management.
CADE
- delay in judgments: priority “competition” between post-merger notification cases
and cartel and other conduct cases
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After Law 12.529/11
One authority: CADE
General Superintendence (GS): Investigation and instruction
Tribunal: Tribunal judges only challenged mergers and Administrative Proceedings.
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Cartel Case Initiation:
General Superintendence:
- 4 Special Units at superintendent´s office: Leniency (Deputy Superintendent,
Chief of Staff and senior officers); Intelligence, Operations and Strategic
Information (senior officers and IT LAB) Screening/Prioritizing/Triage (Deputy
Superintendents and senior officers); Special Projects.
- 3 Cartel thematic specialized units: a) bid rigging cartels; b) international cartels;
c) national hard core cartels and subsidiary.
GS office units do all the initiation procedures from leniency (when it exists) to dawn
raids or formal opening of the proceeding, working in active interaction to:
a) define and apply prioritizing;
b) screen and reject of complaints;
c) decide to do dawn raids, searches, inspections and other measures;
d) rank the complaints;
e) contact other investigative partners and other sectors of CADE, for instance
economic studies department and the legal service;
f) make intelligence reports and build databases and IT solutions.
Advantages:
Specialized staff in each phase of the initiation until the opening of the file working
in interactive way allows better results.
Thematic cartel’s specialized units in charge only of instruction of the opened
administrative proceedings may be more efficient in the analysis of evidences and
defenses and give fast and better conclusions.
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How to deal with...
◦ Scarce resources
◦ Duty to investigate
◦ Rejection of complaints vs. Policy Priorities
◦ Incentives to leniency
◦ Confidentiality until the dawn raid and/or opening the file
◦ Intelligence and IT solutions
In order to reach:
◦ Best assessment of complaints
◦ More efficient, accurate and fast enforcement (reputation);
◦ Increase the number and variety of leniency applications;
◦ Ensure right to due process and proportional punishment;
◦ Less susceptible cases to judicial review
diogo.andrade@cade.gov.br