2 results
Brazil
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- By Cristianne S. Zarzur, Pinheiro Neto Advogados, São Paulo, Brazil, Lilian Barreira, Pinheiro Neto Advogados, São Paulo, Brazil, Marcos P. Garrido, Pinheiro Neto Advogados, São Paulo, Brazil
- General editor Maher M. Dabbah, Queen Mary University of London, Paul Lasok QC
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- Book:
- Merger Control Worldwide
- Published online:
- 05 November 2014
- Print publication:
- 31 May 2012, pp 194-231
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Summary
Relevant legislation and statutory standards
The first Brazilian law specifically dealing with competition issues was Law 4137 of 10 September 1962, containing general rules on abuse of economic power, with broad and generic provisions aimed at controlling acts and contracts that could harm competition on the Brazilian market. This law created the Administrative Council for Economic Defence (Conselho Administrativo de Defesa Econômica – CADE), the Brazilian authority charged with enforcing the competition law. Other laws and decrees of lesser importance were subsequently issued, also dealing with this matter.
However, as the national economy was strongly closed, suffering a rigid control of prices set by the Federal Government, the enforcement of these legal provisions was minimal and the competition culture almost null. On a parallel basis, and also as a result of the legal environment, the local business community was not familiar with competition rules, mainly due to the country’s political and economic history where governmental control over most economic sectors and industries had been the ground rule for decades.
It was only in the mid-1990s that the current Brazilian competition law was enacted, in a moment when the country was undergoing a signiicant number of privatisations, the outset of currency stabilisation, and the gradual opening of the national economy.
6 - Brazil
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- By Cristianne S. Zarzur, Lilian Barreira, Pinheiro Neto Advogados, São Paulo, Brazil
- General editor Maher M. Dabbah, Queen Mary University of London, K. P. E. Lasok QC
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- Book:
- Merger Control Worldwide
- Published online:
- 30 July 2009
- Print publication:
- 29 May 2008, pp 23-29
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- Chapter
- Export citation
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Summary
Effects in Brazil
On 18 October 2005 the CADE issued a precedent (CADE's Precedent No. 1) “formalising” its understanding that the turnover criterion dealt with in the Competition Act should apply to the turnover achieved by any of the parties to the merger transaction in Brazil (and not worldwide, as previously stated by CADE). This precedent affords merging parties the necessary legal certainty when evaluating whether they must notify their operation in Brazil.
On 27 August 2007 CADE issued another precedent, CADE's Precedent No. 2, consolidating its understanding that notification of transactions involving simple corporate reorganisation is not mandatory. According to this precedent, acquisition of a minority ownership interest in the voting capital, by a partner that already holds a majority ownership interest, does not constitute a transaction that requires notification to the Brazilian competition authorities, provided that:
the seller does not hold powers arising from laws, by-laws or agreements to appoint senior managers, determine the company's business policy or veto any corporate matters; and
the transaction does not include non-compete clauses for a period exceeding 5 years and/or a territorial scope broader than that in which the company actually operates; or clauses that entail any type of control between the parties.