Brazil's Council for Economic Defence (CADE), has approved a resolution to amend merger notification proceedings in the country. But the country's competition specialists say the system may create more problems than it solves.
One of the main changes is that submissions will now be made electronically, as the authority has developed specific software for notifications to be filed online.
Within two days of the online submission, merger applicants will also be required to file a printed version with the Secretariat of Economic Law (SDE), as well as electronic copies of the appendices.
The council says the new system will be introduced after corresponding regulation is issued by the SDE, which is continuing to develop the software. Once launched, there will be a trial period of four months, during which time printed submissions, based on the old notification system, will still be accepted.
Francisco Ribeiro Todorov, a partner at Trench Rossi e Watanabe Advogados in Brasilia, says that under the current system, merging parties have to submit three copies of all documents filed - one for each of the country's enforcement agencies. "This creates a burden on the parties but also on the authorities, which have to handle multiple copies of documents, without any efficiency gains," he says. "An electronic system - leading to an almost paperless process - may help to speed up analysis and reduce the time between filing and approval, especially on simpler cases."
Barbara Rosenberg, a partner at Barbosa Müssnich & Aragão in São Paulo, says the idea behind electronic filing is to simplify the merger review system, making it more focused and effective - but this may not be achieved. "The new system was expected to be in line with other national agencies' evolving approaches to merger notification, following a global trend which is backed by the International Competition Network," she says. "However, the notification form appears to require substantially more detailed information on transactions and companies, even for simple deals, making notification more complex and burdensome than it currently is."
Tito Amaral de Andrade, a partner at Machado Meyer Sendacz e Opice Advogados in São Paulo, says he is "in favour of innovation", as long as it creates a more efficient system. "The concern is that an electronic system will not give the necessary level of flexibility that is required when one is drafting an antitrust filing," he says. "In other words, the system has to be smart enough to cope with very complex transactions and with so-called 'fast-track filings' - and it needs to be able to differentiate between them."
Amadeu Ribeiro, a partner at Levy & Salomão Advogados in Rio de Janeiro, agrees the new system may be flawed. "The electronic form requires more information than the current form and appears to be less flexible," he says. "I believe that the proposed change is driven by the authorities' desire to gain more control over the notification process, and to have more information about notified mergers in general."
The authority has yet to announce when the new software will be fully operational.
(Global Competition Review 02.09.2008)