CADE’s application of pecuniary penalties and punitive measures: the need of ascertaining its “state of rightness” – By María Gabriela C. Bacha, Edited by Carlos Mena Labarthe
The application of a pecuniary penalty is the main mechanism that CADE (Brazil’s antitrust authority) has with which to punish companies found guilty of anticompetitive behavior and to deter these agents, and other potential infringers, from engaging in future illicit acts. And considering that CADE has imposed more and more of these fines in recent years, we can see that its methodology for calculating such penalties is of crucial importance.
Article 37 of Brazil’s Antitrust Act (Law 12,529/2011) establishes that a company found guilty
of antitrust violations will be subject to a fine of 0.1% to 20% of its gross revenues – specifically, those
deriving from the offending business area and earned during the fiscal year just prior to the start of the
administrative proceeding (the “gross revenues criterion”). Moreover, the article establishes that such a
fine may never be less than the amount of gains improperly made from the infringement (the
“advantage-obtained criterion”), provided that such an amount can reasonably be estimated.
With respect to the “gross revenues criterion” established at the beginning of article 37, CADE
has been consistent in its decisions: fines levied upon companies have unfailingly been a percentage of
the designated year’s gross...
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