In Brazil, the public enforcement of antitrust infringements is carried out by the Administrative Council for Economic Defence – CADE. Since Law 12,529/2011 was enacted in Brazil, such enforcement has increased considerably, boosted by CADE through the use of leniency and cease-and-desist agreements (known as TCCs).
Through the leniency agreement, any participant involved in an antitrust conspiracy may denounce the practice to CADE aiming to obtain benefits, which may include full administrative and criminal immunity. To do so, proponents must be the first to report the infringement, confess their participation, immediately cease the practice and collaborate with CADE throughout the process.
Accordingly, the TCC may only be proposed by participants already being investigated by CADE, at the authority's discretion. The proponent must collaborate with the investigations and immediately cease the practice. In addition, in cartel cases, the proponent must also admit wrongdoing and offer a pecuniary contribution. As a result, the administrative investigation against the proponent is dismissed.
Neither of the available options grants civil immunity to proponents, noting that those harmed by anticompetitive infringements, in Brazil, may sue potential defendants to obtain compensation for losses and damages suffered. Therefore, at the moment this is the clearest exposition to proponents arising from the signing of leniency and TCC agreements, since the admission of wrongdoing is a clear requirement of such institutes – at least in cartel cases.
Although the number of such claims is still incipient in Brazil, mostly because of difficulties faced by plaintiffs to overcome the calculation of damages and questions about the statute of limitations, CADE and the Brazilian Congress have been working to change this situation through the enforcement of new regulations on this matter.
Therefore, proponents must be aware of the continuing discussions about the use, in private lawsuits, of confidential documents and the information provided in leniency and TCC agreements. For instance, the Brazilian Superior Court of Justice (STJ) recently decided that confidentiality over documents and information part of CADE's investigations was not perpetual. Indeed, STJ understands that documents provided in leniency agreements must only be kept confidential to the extent necessary to protect investigations or in cases where they contain sensitive information that must be preserved.
For its part, CADE issued Resolution N 21/2018, which aims to regulate access to documents and information gathered in its investigations. The new rule establishes that access to the 'history of conduct statement' – a document elaborated by CADE based on self-accusatory documents and information voluntarily provided in the negotiations of agreements – will only be granted to third-parties if this is determined by law, judicial decision or authorisation by the signatories, with CADE's consent. The first request based on Resolution 21/2018 was made in early 2019 and a final decision is still pending.
Another important development is Bill N 11,275/2018, which aims to institute double damages for those harmed by cartels. The new rule, if approved, will be favourable to leniency and TCC proponents, since they will not be obliged to pay such double damages, neither will they be subject to the joint and several liabilities applicable to other violators. Therefore, the Bill may be seen as an extra incentive for violators to seek agreements with CADE, but also means stronger private enforcement.
The overall message is that when negotiating immunity and TCC agreements, certain sensitive information and documents are disclosed, and may expose proponents to potential damage claims. Although CADE has been trying to balance such liabilities, the exposure remains. Therefore, when uncovering anti-competitive practices, companies must be aware that Brazil has sophisticated immunity and settlement programmes in place which may help to decrease overall liabilities arising from antitrust infringements. However, companies should also balance the correspondent level of civil exposure involved, while regulations, case law and interactions among different authorities develop.
|Thales de Melo |