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Legal Update

General Superintendence of CADE Suggests the Condemnation of Cartel of Doors and Metal Detector Systems

9 January 2014
Tauil & Chequer Legal Update

On December 30, 2013, the Official Opinion of the General Superintendence of the Administrative Council for Economic Defense – CADE was published, recommending the condemnation of ten executives and employees, and four manufacturers of doors and metal detector systems, for operating a cartel in public and private bidding competitions for doors and metal detector systems. The case now proceeds to judgment by CADE’s Tribunal.

According to the Superintendence ("SG"), the companies Beringhs Indústria e Comércio Ltda., Ieco Desenvolvimento e Indústria de Máquinas e Aparelhos Ltda., Mineoro Indústria Eletrônica Ltda. and MPCI Metal Protector Ltda. have organized a cartel that has been in operation since at least 2002.

The investigation began with a report received in 2008, and in that same year, there was a search and seizure at the headquarters of the four companies investigated. Through the analysis of the seized material, the Superintendence confirmed the existence of the cartel and recommended condemnation by CADE’s Tribunal.

The Official Opinion of the SG indicates the existence of illicit agreements relating to division of markets and customers among companies, and also combinations of prices and winners of purchasing processes conducted by public and private banks. Such anti-competitive practice would have damaged public and private banks which bought these products to be installed in their agencies.

In the event of condemnation, companies could pay fines of up to 20% of their revenues of one year before the opening of the proceedings (Administrative Proceeding No. 08012.009611/2008-51). The executives and employees of these companies could pay fines of up to 20% of the amount applied to the company.

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