Cade Closes Telecoms Case

Brazil's Council for Economic Defence, CADE, has dismissed a case against the country's largest mobile phone operator Vivo, seven years after it began.

 

The case was brought in 2001 by Mexican mobile phone operator Claro - then known as Telet. Claro accused Vivo of market foreclosure by signing exclusive distribution agreements with certain retail outlets. At the time, Claro was a newcomer in the mobile communications market and Vivo was the incumbent mobile telephone operator in Brazil. It then took Brazil's telecoms regulator, Anatel, six years to reviewed the matter. Eventually, Anatel ruled that Vivo had violated antitrust laws and sent the case to CADE, recommending the imposition of a fine.

CADE found that the despite seven years of investigation, there was no clear evidence of market foreclosure, and there were still a number of alternative retail outlets available to Claro through which it could distribute its products. The authority also said that Claro gained market share over the six years, suggesting that Vivo had been unable to foreclose the market. The final decision to exonerate Vivo was tied, with three votes for and three votes against. Chairperson Elizabeth Farina cast the deciding vote.

"It's really hard to predict how CADE would have reacted had the case been judged six years ago," says Tito Amaral de Andrade, a partner at Machado Meyer Sendacz e Opice Advogados and counsel to Vivo. "The main line of our defence would not have changed, but the seven-year period helped us to prove that everything we put forward in our defence came true in the end." He adds that CADE is better equipped to analyse complex antitrust cases now than it was seven years ago.

RB

 

Counsel to Vivo

 

 

Counsel to Claro

 

Malard Advogados Associados

Partner Neide Malard in São Paulo

 

(Global Competition Review 09.06.2008)