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Legal Update

Brazil Senate's Economic Affairs Committee approves Bill that Modifies CADE Law

18 December 2018
Tauil & Chequer Legal Update

At the 43rd Ordinary Session of the Federal Senate's Economic Affairs Committee ("CAE"), held on December 11, 2018, Senate Bill No. 283 was approved, with some amendments. The Bill concerns the amendment of Law 12.529/2011, which forms the legal framework for the Brazilian Competition Defense System ("SBDC") and provides for the prevention and prosecution of competitive infractions.

As pointed out by the Rapporteur, Senator Armando Monteiro, the Bill aims to make the formation and practice of cartels more burdensome and risky, as well as to facilitate reparation of damages by instating double indemnification, increasing the limitations period and incentivizing arbitration and leniency agreements. In this way, the proposed Law is in line with the microeconomic reforms prioritized for the current economic situation, with a view to boosting productivity through fostering competition and increasing economic efficiency.

In addition, the importance of fostering initiatives in the private sector was emphasized for the reparation of damages caused by cartels, in order to reduce costs of administrative litigation and to discourage further anticompetitive practices.

The main proposed modifications to Law 12.529/2011 are (i) to institute double compensation for damages suffered as a result of cartel practices; (ii) to extend benefits under leniency agreements and Cease and Desist Agreements ("TCC"); (iii) to legitimize the decisions of the Plenary Tribunal of the Administrative Council of Economic Defense ("CADE") , in order to justify the granting of advance protection of evidence in preliminary injunctions; (iv) to extend the limitations period to five years in damages lawsuits and to institute a fixed initial term; (v) to establish for the beneficiaries of TCC agreements the obligation to submit damage reparation to arbitration when the injured party takes the initiative to institute such obligation.

The Bill was approved by the CAE, by fifteen votes to none, with no abstentions. According to congressional procedure, the Bill will next be voted on by the full Senate; if it passes, it will go to the House of Representatives for a final vote.

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