Since the declaration of the state of public calamity, the Administrative Council for Economic Defense (Cade) has indicated that there will be no relaxation of the application of the Antitrust Law (Law No. 12,529/11) because of the covid-19 pandemic. Bill No. 1,179/20, which establishes emergency and transitory changes to regulate private law legal relations due to the Covid-19 pandemic and, in its final version, contemplated changes suggested by Cade itself in the relevant articles, should not promote any significant change in the agency's actions or vacate its jurisdiction.
The bill clearly states that the amendments proposed to the Competition Law apply expressly to acts performed and effective from March 20 to October 30 of this year or for the duration of the state of public calamity, recognized by Legislative Decree No. 6, of March 20, 2020.
If the bill is signed by the President of Brazil, the effectiveness of sections XV and XVII of paragraph 3 of article 36 of the Antitrust Law will be suspended, which means that Cade may not sanction companies for the sale of goods or rendering of services unjustifiably below cost price (predatory pricing), or for partial or total cessation of activities without just cause during the period delimited by the bill. Besides being unlikely in practice, conduct of this nature has not been the subject of punishment by Cade thus far. The bill also provides that Cade should consider the extraordinary circumstances arising from the pandemic when analyzing other potential anticompetitive conduct under the Competition Law.
With respect to mergers, the PL provides for suspension of the effectiveness of subsection IV of article 90 of the Antitrust Law, which imposes the need for reporting transactions that constitute an associative agreement, consortium, or joint venture, provided that the parties meet the turnover thresholds. However, the provision does not rule out the possibility of subsequent review by Cade of acts of concentration or finding of antitrust violations due to agreements that are not necessary to combat or mitigate the consequences of the pandemic.
Cade has expressed the view that business cooperation mechanisms related to the pandemic, regardless of the nature of their contractual arrangement, should be brought to the agency's attention in advance.
In this context, companies should remain alert to the competitive risks of their business practices, as the emergency and transitory changes promoted by the bill in the application of the Antitrust Law do not represent any type of antitrust immunity due to the covid-19 pandemic.