- LEGALLY PRIVILEGED AND CONFIDENTIAL -
Antitrust Deep Dive Report
Country
- LEGALLY PRIVILEGED AND CONFIDENTIAL -
Legal Department Brazil 2014
Legally Privileged and Confidential
- LEGALLY PRIVILEGED AND CONFIDENTIAL -
High Level Information on Brazilian Context and Business
Political and Economical Environment
- LEGALLY PRIVILEGED AND CONFIDENTIAL -
Antitrust legal framework and Antitrust Agency in Brazil
Deep Dive Report Brazil – June 2014






Participants: Marcos Angelini, Vice President & General Manager for Home Care at Unilever Brasil, Marketing and Advertising; Julio Campos, Vice
President of Sales at Unilever Brasil, Marcelo Celani, Paula Morrone, Newman Debs.
Methodology: Interviews and documentation review.
Result of the Antitrust Matrix Exercise as compared to benchmark: ____ Risk
This work covers and is focused only on the potential antitrust concerns arising from commercial practices related to (cattegory).
The Current Status In House Review is based on Interviews conducted by Mr. Newman Debs and Mrs. Nelcina Tropardi, Legal Directors at Unilever Brasil.
Information and Figures provided by Marcos Angelini, Julio Campos, Ricardo Zuccollo (Sales Director at Unilever Brasil), Luiz Henrique G. Dente (Customer
Marketing Director at Unilver Brasil), Juliana Carsoni (Channel Development Director at Unilever Brasil) and Estevam Demasi (CD Finance).
Current Status
Conduct
Antitrust Law and Regulation - Brazil
Action Plan
In House Review
The decision of the Brazilian antitrust tribunal
(CADE)
on
SKF
case
(Case
No. 08012.001271/2001-44) is paradigmatic on
resale price maintenance.
Pricing/Resale Price
Maintenance
According to CADE in this case, such kind of
practice shall be presumed illegal, especially the
fixing of minimum or rigid resale prices. Having
sufficient grounds demonstrating the occurrence of
the practice, it will be on the defendant the burden
of proving that its price strategy:
(a) is not capable of causing the presumed damages
to competition by lack of market power or
(b) can result in economic efficiencies that
outweigh the antitrust concerns.
- LEGALLY PRIVILEGED AND CONFIDENTIAL Deep Dive Report Brazil – June 2014






Participants: Marcos Angelini, Vice President & General Manager for Home Care at Unilever Brasil, Marketing and Advertising; Julio Campos, Vice
President of Sales at Unilever Brasil, Marcelo Celani, Paula Morrone, Newman Debs.
Methodology: Interviews and documentation review.
Result of the Antitrust Matrix Exercise as compared to benchmark: ____ Risk
This work covers and is focused only on the potential antitrust concerns arising from commercial practices related to (cattegory).
The Current Status In House Review is based on Interviews conducted by Mr. Newman Debs and Mrs. Nelcina Tropardi, Legal Directors at Unilever Brasil.
Information and Figures provided by Marcos Angelini, Julio Campos, Ricardo Zuccollo (Sales Director at Unilever Brasil), Luiz Henrique G. Dente (Customer
Marketing Director at Unilver Brasil), Juliana Carsoni (Channel Development Director at Unilever Brasil) and Estevam Demasi (CD Finance).
Current Status
Conduct
Antitrust Law and Regulation - Brazil
Action Plan
In House Review
Furthermore, there is no need of evidence on the
application of penalties for noncompliance with
prices scheme: The mere pre-existence of
mechanisms of monitoring and punishment tends to
be considered sufficient to put pressure on resellers.
It also does not matter the duration of the practice,
not even if the resellers effectively followed the
fixed prices or not.
In the same decision, CADE’s Chairman stated that
suggestion of resale prices is not without risk. It
may raise antitrust concerns if it can lead to
conscious parallelism in price movements or tacit
collusion among competitors through mechanisms
of collection and dissemination of sensitive market
information among them.
It is also worth noting that, according to CADE’s
case law, the conditional of benefits (like: rebates
and bonus) on the achievement of suggested resale
prices tends tends to be deemed as minimum/rigid
- LEGALLY PRIVILEGED AND CONFIDENTIAL Deep Dive Report Brazil – June 2014






Participants: Marcos Angelini, Vice President & General Manager for Home Care at Unilever Brasil, Marketing and Advertising; Julio Campos, Vice
President of Sales at Unilever Brasil, Marcelo Celani, Paula Morrone, Newman Debs.
Methodology: Interviews and documentation review.
Result of the Antitrust Matrix Exercise as compared to benchmark: ____ Risk
This work covers and is focused only on the potential antitrust concerns arising from commercial practices related to (cattegory).
The Current Status In House Review is based on Interviews conducted by Mr. Newman Debs and Mrs. Nelcina Tropardi, Legal Directors at Unilever Brasil.
Information and Figures provided by Marcos Angelini, Julio Campos, Ricardo Zuccollo (Sales Director at Unilever Brasil), Luiz Henrique G. Dente (Customer
Marketing Director at Unilver Brasil), Juliana Carsoni (Channel Development Director at Unilever Brasil) and Estevam Demasi (CD Finance).
Current Status
Conduct
Antitrust Law and Regulation - Brazil
Action Plan
In House Review
resale price maintenance.
Finally, regarding maximum pricing schemes, two
important cautions on this issue are ensuring that
the suggested price:
i. does not decrease clients’ mark-ups to an extent
such that drives them off the market, which
could have a negative impact on the marketing
of competing products and brands, and
ii. does not become a focal point to other resellers
in the market, which in turn could facilitate a
price alignment among resellers or even among
competing manufacturers.
- LEGALLY PRIVILEGED AND CONFIDENTIAL Deep Dive Report Brazil – June 2014






Participants: Marcos Angelini, Vice President & General Manager for Home Care at Unilever Brasil, Marketing and Advertising; Julio Campos, Vice
President of Sales at Unilever Brasil, Marcelo Celani, Paula Morrone, Newman Debs.
Methodology: Interviews and documentation review.
Result of the Antitrust Matrix Exercise as compared to benchmark: ____ Risk
This work covers and is focused only on the potential antitrust concerns arising from commercial practices related to (cattegory).
The Current Status In House Review is based on Interviews conducted by Mr. Newman Debs and Mrs. Nelcina Tropardi, Legal Directors at Unilever Brasil.
Information and Figures provided by Marcos Angelini, Julio Campos, Ricardo Zuccollo (Sales Director at Unilever Brasil), Luiz Henrique G. Dente (Customer
Marketing Director at Unilver Brasil), Juliana Carsoni (Channel Development Director at Unilever Brasil) and Estevam Demasi (CD Finance).
Current Status
Conduct
Antitrust Law and Regulation - Brazil
Action Plan
In House Review
Pricing below costs may be considered an antitrust
violation if capable of forcing out competing brands
from the market with no economic reason for its
adoption.
Also if this is a recurrent practice.
Predatory Prices
Another relevant factor in the assessment of
antitrust effects of such kind of practice is its
market coverage. The higher the number and
market relevance the target clients, the geographic
area defined for the implementation of the practice
and its duration period, the higher the antitrust
risks.
Exception: time limited practice with strong
economic reason for its implementation.
Price Discrimination
Price differences among clients with similar
purchasing characteristics could be deemed illegal
unless there is a strong economic reason for that,
- LEGALLY PRIVILEGED AND CONFIDENTIAL Deep Dive Report Brazil – June 2014






Participants: Marcos Angelini, Vice President & General Manager for Home Care at Unilever Brasil, Marketing and Advertising; Julio Campos, Vice
President of Sales at Unilever Brasil, Marcelo Celani, Paula Morrone, Newman Debs.
Methodology: Interviews and documentation review.
Result of the Antitrust Matrix Exercise as compared to benchmark: ____ Risk
This work covers and is focused only on the potential antitrust concerns arising from commercial practices related to (cattegory).
The Current Status In House Review is based on Interviews conducted by Mr. Newman Debs and Mrs. Nelcina Tropardi, Legal Directors at Unilever Brasil.
Information and Figures provided by Marcos Angelini, Julio Campos, Ricardo Zuccollo (Sales Director at Unilever Brasil), Luiz Henrique G. Dente (Customer
Marketing Director at Unilver Brasil), Juliana Carsoni (Channel Development Director at Unilever Brasil) and Estevam Demasi (CD Finance).
Current Status
Conduct
Antitrust Law and Regulation - Brazil
Action Plan
In House Review
such as:
 relevant market differences among them
(different customer-service costs or conditions)
 commercial strategy to entry in a new market
niche
 different competitive conditions in the markets
where clients operate
 circumstances linked to the moment at which UL
deals with each client.
Rebate for Exclusivity
or Exclusive Purchase in the
commercialization chain or at
the point of sale
Exclusive Distribution
Rebates conditioned to exclusivity could be deemed
illegal if capable of limiting access of competitors
to key sales channels in a specific market.
Exclusive agreements with wholesalers may raise
antitrust concerns if:
-
- LEGALLY PRIVILEGED AND CONFIDENTIAL Deep Dive Report Brazil – June 2014






Participants: Marcos Angelini, Vice President & General Manager for Home Care at Unilever Brasil, Marketing and Advertising; Julio Campos, Vice
President of Sales at Unilever Brasil, Marcelo Celani, Paula Morrone, Newman Debs.
Methodology: Interviews and documentation review.
Result of the Antitrust Matrix Exercise as compared to benchmark: ____ Risk
This work covers and is focused only on the potential antitrust concerns arising from commercial practices related to (cattegory).
The Current Status In House Review is based on Interviews conducted by Mr. Newman Debs and Mrs. Nelcina Tropardi, Legal Directors at Unilever Brasil.
Information and Figures provided by Marcos Angelini, Julio Campos, Ricardo Zuccollo (Sales Director at Unilever Brasil), Luiz Henrique G. Dente (Customer
Marketing Director at Unilver Brasil), Juliana Carsoni (Channel Development Director at Unilever Brasil) and Estevam Demasi (CD Finance).
Current Status
Conduct
Antitrust Law and Regulation - Brazil
Action Plan
In House Review
 capable of limiting the access of (effective or
potential) competitors to key channels for their in
a relevant market and
 the economic reasons for such practice or the
efficiencies directly resulting from it are not
sufficient to counterbalance the potential harms
to competition.
It is worth noting that the higher the market share of
the companies involved in such a kind of practice,
the higher the antitrust concerns arising from it.
Notification to CADE. Exclusivity agreements
shall be shall be previously submitted to the
Brazilian antitrust authorities for review if the
following criteria are met:
 it is capable of producing effects in Brazil
 at least one party has annual turnover superior to
- LEGALLY PRIVILEGED AND CONFIDENTIAL Deep Dive Report Brazil – June 2014






Participants: Marcos Angelini, Vice President & General Manager for Home Care at Unilever Brasil, Marketing and Advertising; Julio Campos, Vice
President of Sales at Unilever Brasil, Marcelo Celani, Paula Morrone, Newman Debs.
Methodology: Interviews and documentation review.
Result of the Antitrust Matrix Exercise as compared to benchmark: ____ Risk
This work covers and is focused only on the potential antitrust concerns arising from commercial practices related to (cattegory).
The Current Status In House Review is based on Interviews conducted by Mr. Newman Debs and Mrs. Nelcina Tropardi, Legal Directors at Unilever Brasil.
Information and Figures provided by Marcos Angelini, Julio Campos, Ricardo Zuccollo (Sales Director at Unilever Brasil), Luiz Henrique G. Dente (Customer
Marketing Director at Unilver Brasil), Juliana Carsoni (Channel Development Director at Unilever Brasil) and Estevam Demasi (CD Finance).
Current Status
Conduct
Antitrust Law and Regulation - Brazil
Action Plan
In House Review
R$ 750 million in the Brazilian territory and
 at least another party has annual turnover of more
than R$ 75 million in the same country.
Transactions subject to mandatory filing shall be
closed only after CADE’s final ruling, under
penalty of nullity of the acts performed by the
parties and fines ranging from R$ 60 thousand to
R$ 60 million approximately.
Growth Rebates
Under certain circumstances, the grant of
conditioned benefits by a company in a relevant
position in the market may end up stimulating
resellers to concentrate their purchases in the
grantor and, consequently, hampering sales of
competitors or forcing out competing brands from
the market.
The main factors taken into account in the
assessment of the possibility of foreclosing the
- LEGALLY PRIVILEGED AND CONFIDENTIAL Deep Dive Report Brazil – June 2014






Participants: Marcos Angelini, Vice President & General Manager for Home Care at Unilever Brasil, Marketing and Advertising; Julio Campos, Vice
President of Sales at Unilever Brasil, Marcelo Celani, Paula Morrone, Newman Debs.
Methodology: Interviews and documentation review.
Result of the Antitrust Matrix Exercise as compared to benchmark: ____ Risk
This work covers and is focused only on the potential antitrust concerns arising from commercial practices related to (cattegory).
The Current Status In House Review is based on Interviews conducted by Mr. Newman Debs and Mrs. Nelcina Tropardi, Legal Directors at Unilever Brasil.
Information and Figures provided by Marcos Angelini, Julio Campos, Ricardo Zuccollo (Sales Director at Unilever Brasil), Luiz Henrique G. Dente (Customer
Marketing Director at Unilver Brasil), Juliana Carsoni (Channel Development Director at Unilever Brasil) and Estevam Demasi (CD Finance).
Current Status
Conduct
Antitrust Law and Regulation - Brazil
Action Plan
In House Review
market are the following:
 the degree of market power of the executor of
such practice
 the established targets
 the market share of the resellers bound to the
practice
 the relevance of the bound resellers to the selling
of competing products
 the application of benefits over the sales volume
prior to the target achievement or only to the
exceeding volume.
 the reference period.
 the relevance of benefits granted from the
resellers’ point of view.
There are no clear standards for each of the factors
- LEGALLY PRIVILEGED AND CONFIDENTIAL Deep Dive Report Brazil – June 2014






Participants: Marcos Angelini, Vice President & General Manager for Home Care at Unilever Brasil, Marketing and Advertising; Julio Campos, Vice
President of Sales at Unilever Brasil, Marcelo Celani, Paula Morrone, Newman Debs.
Methodology: Interviews and documentation review.
Result of the Antitrust Matrix Exercise as compared to benchmark: ____ Risk
This work covers and is focused only on the potential antitrust concerns arising from commercial practices related to (cattegory).
The Current Status In House Review is based on Interviews conducted by Mr. Newman Debs and Mrs. Nelcina Tropardi, Legal Directors at Unilever Brasil.
Information and Figures provided by Marcos Angelini, Julio Campos, Ricardo Zuccollo (Sales Director at Unilever Brasil), Luiz Henrique G. Dente (Customer
Marketing Director at Unilver Brasil), Juliana Carsoni (Channel Development Director at Unilever Brasil) and Estevam Demasi (CD Finance).
Current Status
Conduct
Antitrust Law and Regulation - Brazil
Action Plan
In House Review
given above that enable to identify when a certain
practice may be seen as a means of restraining
competition. In view of this, the antitrust effects of
such kind of practice shall be assessed on a case by
case basis.
It is also worth noting that rebates implying below
cost pricing are being under attack in several
jurisdictions, because the lack of a precompetitive
rational when imposed by dominant players.
Finally, rebates are fundamentally an incentive
mechanism. They are pro competitive when linked
to efficiency considerations. When they imply
below cost pricing and are used to attain higher
market shares they can be challenged.
Idem to above
Market Share Rebates
Rebates are fundamentally an incentive
mechanism. They are pro competitive when linked
- LEGALLY PRIVILEGED AND CONFIDENTIAL Deep Dive Report Brazil – June 2014






Participants: Marcos Angelini, Vice President & General Manager for Home Care at Unilever Brasil, Marketing and Advertising; Julio Campos, Vice
President of Sales at Unilever Brasil, Marcelo Celani, Paula Morrone, Newman Debs.
Methodology: Interviews and documentation review.
Result of the Antitrust Matrix Exercise as compared to benchmark: ____ Risk
This work covers and is focused only on the potential antitrust concerns arising from commercial practices related to (cattegory).
The Current Status In House Review is based on Interviews conducted by Mr. Newman Debs and Mrs. Nelcina Tropardi, Legal Directors at Unilever Brasil.
Information and Figures provided by Marcos Angelini, Julio Campos, Ricardo Zuccollo (Sales Director at Unilever Brasil), Luiz Henrique G. Dente (Customer
Marketing Director at Unilver Brasil), Juliana Carsoni (Channel Development Director at Unilever Brasil) and Estevam Demasi (CD Finance).
Current Status
Conduct
Antitrust Law and Regulation - Brazil
Action Plan
In House Review
to efficiency considerations.
Dominant player: Market share incentives are
admissible if used to shelter or keep previously
attained positions. But when they are used to obtain
higher market share, they can be challenged.
Idem to above.
RTG (Relative Turnover
Growth)
Facing (Shelf Space
Agreements)
Tied Sales
RTG can be easily considered by regulators as an
antitrust violation if imposed by a dominant player
because is a manner to reinforce such a dominant
position .
Idem to above.
Tying the sale of a certain product (tying product)
to the acquisition of a second one may be an
antitrust violation, depending on the market power
- LEGALLY PRIVILEGED AND CONFIDENTIAL Deep Dive Report Brazil – June 2014






Participants: Marcos Angelini, Vice President & General Manager for Home Care at Unilever Brasil, Marketing and Advertising; Julio Campos, Vice
President of Sales at Unilever Brasil, Marcelo Celani, Paula Morrone, Newman Debs.
Methodology: Interviews and documentation review.
Result of the Antitrust Matrix Exercise as compared to benchmark: ____ Risk
This work covers and is focused only on the potential antitrust concerns arising from commercial practices related to (cattegory).
The Current Status In House Review is based on Interviews conducted by Mr. Newman Debs and Mrs. Nelcina Tropardi, Legal Directors at Unilever Brasil.
Information and Figures provided by Marcos Angelini, Julio Campos, Ricardo Zuccollo (Sales Director at Unilever Brasil), Luiz Henrique G. Dente (Customer
Marketing Director at Unilver Brasil), Juliana Carsoni (Channel Development Director at Unilever Brasil) and Estevam Demasi (CD Finance).
Current Status
Conduct
Antitrust Law and Regulation - Brazil
Action Plan
In House Review
of the supplier in the market for the tying product.
Packed Products
Refusal to Sell
Idem to above.
Refusing to sell products to a certain client may be
deemed illegal unless there is strong economic
reason for that, like: request for non-standard
commercial conditions or default.
Any kind of agreement or collusive behaviour
among competitors to fix prices, control production,
divide markets or allocate consumers/suppliers may
constitute an antitrust violation.
Cartel
The disclosure of sensitive information from some
resellers to others may be seen as promotion of
cartel in the resale market and may also constitute
an antitrust violation.
Abuse of Dominant Position
Regardless of intent, it is deemed illegal in Brazil to
undertake commercial practices aiming at or
- LEGALLY PRIVILEGED AND CONFIDENTIAL Deep Dive Report Brazil – June 2014






Participants: Marcos Angelini, Vice President & General Manager for Home Care at Unilever Brasil, Marketing and Advertising; Julio Campos, Vice
President of Sales at Unilever Brasil, Marcelo Celani, Paula Morrone, Newman Debs.
Methodology: Interviews and documentation review.
Result of the Antitrust Matrix Exercise as compared to benchmark: ____ Risk
This work covers and is focused only on the potential antitrust concerns arising from commercial practices related to (cattegory).
The Current Status In House Review is based on Interviews conducted by Mr. Newman Debs and Mrs. Nelcina Tropardi, Legal Directors at Unilever Brasil.
Information and Figures provided by Marcos Angelini, Julio Campos, Ricardo Zuccollo (Sales Director at Unilever Brasil), Luiz Henrique G. Dente (Customer
Marketing Director at Unilver Brasil), Juliana Carsoni (Channel Development Director at Unilever Brasil) and Estevam Demasi (CD Finance).
Current Status
Conduct
Antitrust Law and Regulation - Brazil
Action Plan
In House Review
capable of:
 limiting, restraining or harming open competition
or free enterprise
 controlling any relevant market for products or
services
 Achievement of market control by means of
competitive efficiency is exempted.
 increasing profits on a discretionary basis and
 abusing one’s market power in any relevant
market.
 Players with market share superior to 20%
are presumed to have market power.