Brazil: The Enactment Of The New Brazilian Competition Law: An Important Shift

Last Updated: 26 August 2013
Article by Barbara Rosenberg

The year of 2012 was key for the modernization of the antitrust law and policy in Brazil: after several years in Congress under discussions and amendments, the new Brazilian Competition Law (Law No. 12.529/2011) entered into force on May 29, 2012.

Among the several changes brought by the new Law, the main was the adoption of a pre-merger review system, which incorporated a suspensory obligation prior to closing. This new legal framework changed the dynamics of the antitrust review process not only to the antitrust authority (the Economic Council for Administrative Defence, or CADE), which became bound to a deadline to review merger cases, but also to companies that now have to deal with bar on closing obligations during the merger review process.

i. Pre-merger review

Since May 29, 2012, parties to notifiable transactions in Brazil are not allowed to close or implement agreements, or, in merger cases, to integrate their businesses, before CADE issues its final decision regarding the competitive effects of the transaction. The parties cannot align their behavior in the marketplace either, and they should maintain their business operations as fully independent as possible until CADE's final decision is issued. In a nutshell, by adopting a pre-merger review system, Brazil aligned its practice to the one existing in the mature jurisdictions, such as the United States of America and Europe.

The Brazilian antitrust authority expects parties involved in a notifiable transaction to hold their respective activities (including, for instance, facilities, plants business and commercial practices) separate until CADE's final authorization is given. As such, during CADE's review, the parties are not allowed to (i) transferring assets, (ii) exchanging competitive sensitive information that is not reasonably necessary to the negotiation of the agreement or transaction, and (iii) exercising any type of decisive influence over another's business and commercial decisions. The definition of competitive sensitive information may vary from case to case and from industry to industry and may require a specific assessment in the context of the agreement or transaction under analysis, but examples of competitive sensitive information generally include information regarding prices, quantities, profitability, costs, payment terms and conditions, intellectual properties rights, current or prospective clients and suppliers, research and development projects, current or future marketing and strategic plans, product development plans or trade secrets. As a consequence, parties should be especially cautious as to competitively sensitive information that is to be exchanged for purposes of planning the business integration, including in the course of the due diligence process, in order to avoid these risks during preliminary negotiations and during the transition period between signing and closing.

If the parties do not comply with the suspensory obligations, incurring in the so-called gun-jumping prior to closing, the transaction will be considered void the parties shall be subject to fines ranging from BRL 60 thousand to BRL 60 million, in addition to possible cartel investigations.

ii. Timing of the review

With respect to the timing of the antitrust merger review, CADE has a maximum deadline of 240 days, which can be extended by CADE in complex mergers to up to 330 days (11 monts), to review the notified transactions. Even though the new Law does not explicitly set forth that the transaction is automatically cleared if the review period is exceeded, CADE's General Attorney has issued Opinion No. 17/2012 stating that such deadline is final.

The practice so far has shown that CADE has approved fast track cases in less than 30 days as of the moment of the filing, provided that the notification form is considered complete. After clearance, parties shall wait additional 15 days for a possible appeal prior to closing. Therefore, closing schedules should allow for 30 to 45 days for clearance of the so-called fast track transactions. The review period of more complex cases (transactions that involve concentrations of more than 20% market share) cannot be precisely estimated and depend of a case by case analysis.

In the context of a pre-merger review, it is important to have in mind that the more complete the notification form, the larger the chances of having the case cleared quickly. Under the old system, parties normally provided limited information and waited the authority to request any additional data it deemed necessary. Since the enactment of the new Law, the companies have to take extra care in the completeness of all information that is being provided because each request for additional information from the authority can result in delay in the review process and thus in the consummation of the deal. The notification filing forms provided by the new law are more complex in terms of the information requested and it is important to follow the requests therein as strictly as possible to have the deal cleared in a reasonable timing. One additional difference is that the parties must now present any side documents prepared with the purpose of approving the transaction, including those with market data and assessment of the target company, among others. This requires additional care in the preparation of the documents.

Finally, one should also note that there is no longer a deadline to submit the transactions to CADE; notifiable transactions must be submitted for review prior to closing and preferably after signing of a binding document, even though CADE has been accepting to review non binding documents, provided that some agreement has been executed between the parties.

iii. Notifiable transactions

The New Competition Law also changed the thresholds of notifiable transactions. According to the new Law, a deal has to be submitted to CADE's review when (i) at least one of the groups involved registered an annual gross revenues (turnover) or a business volume above BRL 750 million in the year preceding the proposed transaction, and (ii) another group involved registered gross revenues (turnover) or a business volume above BRL 75 million in the year preceding the proposed transaction.

Article 90 of Law No. 12.529/2011 provides that a concentration shall be deemed to occur when (i) two or more previously independent companies merge; (ii) one or more companies acquire, directly or indirectly, by any means, control or parts of one or more other companies; or (iii) two or more companies enter into an association agreement, or form a consortium or joint venture.

Given the broad wording of Article 54 of the former Brazilian antitrust law (Law No. 8.884/1994), the attempt of Article 90 of the new law was to give a better guidance of the types of transactions that need to be submitted to CADE in order to restrict the number of cases reviewed by the authority. With this in mind, the concept of acquisition of control or parts of one or more other companies (as stated in item (ii) above) has already been further clarified by CADE´s Resolution No. 2/2012 which states what types of acquisitions triggers mandatory antitrust filing. This regulation improves the clarity of a significant number of transactions that needs to be notified to CADE. One should note, however, that this regulation is still not enough to contemplate companies' concerns and doubts when assessing whether or not to submit certain transaction to CADE. In this context, the authorities are yet to issue additional clarifications with respect to the scope of the specific provision regarding "joint ventures" and "association agreements" (as stated in item (iii) above) given the broad language of article 90 and in view of CADE's over inclusive decisions regarding the need to notify those kind of agreements under the old Law No. 8.884/1994.

iv. Other Changes

The new law also brought changes in relation to the administrative proceedings related to anticompetitive conducts (i.e. cartels) with the aim to improve the enforcement of those wrongdoings.

An important change concerns the fines imposed on companies convicted for anticompetitive conducts. While the old law established a fine of 1 to 30% of the gross revenues less taxes of the company in the year prior to the beginning of the investigation, the new law changed the range of the fines to 0.1 to 20% of the company's gross revenues of the company, economic group or conglomerate in the year prior to the beginning of the investigation, and limited the basis for the calculation of the fines to the business segment in which the wrongdoing occurred. This means that under the new Brazilian Competition Law the fines are no longer calculated based on the total gross revenues of the company, but on the revenues of the business segment in which the conduct occurred. It is still uncertain whether this change of the law will result in more limited fines to the companies since CADE has still not issued any decision under the basis of the new Law; the reasonableness of the fine would mostly depend on the geographic scope of the business segment involved in the wrongdoing.

For individuals, the range of the fines also changed from 10 to 50% of the amount applied to the company (according to the old antitrust law) to 1 to 20%. The new law also expanded the list of alternative penalties to individuals including the possibility of debarment from practicing trade on their own behalf or as a representative of a legal entity for a period of up to five years.

It is worth highlighting that cartel is both an administrative infringement, as well as a crime under Brazilian law; and that there was an important change in the criminal provision of this anticompetitive practice. Prior to the enactment of the new law, Article 4 of Law No. 8.137/1990 provided that the penalty for crimes against the economic order was imprisonment from 2 to 5 years or the payment of a fine. The new Law eliminates the possibility of alternative penalties. Individuals now investigated for cartel crimes are subject to 2 to 5 years' imprisonment and the payment of a fine. As a consequence, individuals investigated for crimes against the economic order (such as cartel) no longer have the possibility to terminate the criminal proceedings by paying an administrative fine to CADE.

The New Competition Law did not bring significant changes to the procedures for signing leniency and settlement agreements and these two subject are still subject to further discussions and regulations by the authorities in order to improve the reliability, certainty and clearness of those tools in the enforcement of cartels investigations in the country.

v. Conclusion

The new Brazilian Competition Law introduced relevant changes, which shall affect the business environment for companies doing business in Brazil. CADE shall be praised for being able to review fast cases in short periods even with considerably limited resources. Although there is still room for improvement, the enactment of the new Brazilian Competition Law was a relevant step in the development and enforcement of the antitrust policy in the country.


1 The concept of group of companies and control are particularly important in this context for the calculation of the applicable turnover thresholds rules; CADE substantially expanded these concepts – in contrast with those adopted by the old law (Law No. 8.884/1994) – with the issuance of new regulations.

2 Associations created for the purpose of participating in public bids have been expressly excluded from the concept of concentration for purposes of merger control.

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.

To print this article, all you need is to be registered on

Click to Login as an existing user or Register so you can print this article.

Some comments from our readers…
“The articles are extremely timely and highly applicable”
“I often find critical information not available elsewhere”
“As in-house counsel, Mondaq’s service is of great value”

Up-coming Events Search
Font Size:
Mondaq on Twitter
Register for Access and our Free Biweekly Alert for
This service is completely free. Access 250,000 archived articles from 100+ countries and get a personalised email twice a week covering developments (and yes, our lawyers like to think you’ve read our Disclaimer).
Email Address
Company Name
Confirm Password
Mondaq Topics -- Select your Interests
 Law Performance
 Law Practice
 Media & IT
 Real Estate
 Wealth Mgt
Asia Pacific
European Union
Latin America
Middle East
United States
Worldwide Updates
Mondaq Ltd requires you to register and provide information that personally identifies you, including what sort of information you are interested in, for three primary purposes:
  • To allow you to personalize the Mondaq websites you are visiting.
  • To enable features such as password reminder, newsletter alerts, email a colleague, and linking from Mondaq (and its affiliate sites) to your website.
  • To produce demographic feedback for our information providers who provide information free for your use.
  • Mondaq (and its affiliate sites) do not sell or provide your details to third parties other than information providers. The reason we provide our information providers with this information is so that they can measure the response their articles are receiving and provide you with information about their products and services.
    If you do not want us to provide your name and email address you may opt out by clicking here
    If you do not wish to receive any future announcements of products and services offered by Mondaq you may opt out by clicking here

    Terms & Conditions and Privacy Statement (the Website) is owned and managed by Mondaq Ltd and as a user you are granted a non-exclusive, revocable license to access the Website under its terms and conditions of use. Your use of the Website constitutes your agreement to the following terms and conditions of use. Mondaq Ltd may terminate your use of the Website if you are in breach of these terms and conditions or if Mondaq Ltd decides to terminate your license of use for whatever reason.

    Use of

    You may use the Website but are required to register as a user if you wish to read the full text of the content and articles available (the Content). You may not modify, publish, transmit, transfer or sell, reproduce, create derivative works from, distribute, perform, link, display, or in any way exploit any of the Content, in whole or in part, except as expressly permitted in these terms & conditions or with the prior written consent of Mondaq Ltd. You may not use electronic or other means to extract details or information about’s content, users or contributors in order to offer them any services or products which compete directly or indirectly with Mondaq Ltd’s services and products.


    Mondaq Ltd and/or its respective suppliers make no representations about the suitability of the information contained in the documents and related graphics published on this server for any purpose. All such documents and related graphics are provided "as is" without warranty of any kind. Mondaq Ltd and/or its respective suppliers hereby disclaim all warranties and conditions with regard to this information, including all implied warranties and conditions of merchantability, fitness for a particular purpose, title and non-infringement. In no event shall Mondaq Ltd and/or its respective suppliers be liable for any special, indirect or consequential damages or any damages whatsoever resulting from loss of use, data or profits, whether in an action of contract, negligence or other tortious action, arising out of or in connection with the use or performance of information available from this server.

    The documents and related graphics published on this server could include technical inaccuracies or typographical errors. Changes are periodically added to the information herein. Mondaq Ltd and/or its respective suppliers may make improvements and/or changes in the product(s) and/or the program(s) described herein at any time.


    Mondaq Ltd requires you to register and provide information that personally identifies you, including what sort of information you are interested in, for three primary purposes:

    • To allow you to personalize the Mondaq websites you are visiting.
    • To enable features such as password reminder, newsletter alerts, email a colleague, and linking from Mondaq (and its affiliate sites) to your website.
    • To produce demographic feedback for our information providers who provide information free for your use.

    Mondaq (and its affiliate sites) do not sell or provide your details to third parties other than information providers. The reason we provide our information providers with this information is so that they can measure the response their articles are receiving and provide you with information about their products and services.

    Information Collection and Use

    We require site users to register with Mondaq (and its affiliate sites) to view the free information on the site. We also collect information from our users at several different points on the websites: this is so that we can customise the sites according to individual usage, provide 'session-aware' functionality, and ensure that content is acquired and developed appropriately. This gives us an overall picture of our user profiles, which in turn shows to our Editorial Contributors the type of person they are reaching by posting articles on Mondaq (and its affiliate sites) – meaning more free content for registered users.

    We are only able to provide the material on the Mondaq (and its affiliate sites) site free to site visitors because we can pass on information about the pages that users are viewing and the personal information users provide to us (e.g. email addresses) to reputable contributing firms such as law firms who author those pages. We do not sell or rent information to anyone else other than the authors of those pages, who may change from time to time. Should you wish us not to disclose your details to any of these parties, please tick the box above or tick the box marked "Opt out of Registration Information Disclosure" on the Your Profile page. We and our author organisations may only contact you via email or other means if you allow us to do so. Users can opt out of contact when they register on the site, or send an email to with “no disclosure” in the subject heading

    Mondaq News Alerts

    In order to receive Mondaq News Alerts, users have to complete a separate registration form. This is a personalised service where users choose regions and topics of interest and we send it only to those users who have requested it. Users can stop receiving these Alerts by going to the Mondaq News Alerts page and deselecting all interest areas. In the same way users can amend their personal preferences to add or remove subject areas.


    A cookie is a small text file written to a user’s hard drive that contains an identifying user number. The cookies do not contain any personal information about users. We use the cookie so users do not have to log in every time they use the service and the cookie will automatically expire if you do not visit the Mondaq website (or its affiliate sites) for 12 months. We also use the cookie to personalise a user's experience of the site (for example to show information specific to a user's region). As the Mondaq sites are fully personalised and cookies are essential to its core technology the site will function unpredictably with browsers that do not support cookies - or where cookies are disabled (in these circumstances we advise you to attempt to locate the information you require elsewhere on the web). However if you are concerned about the presence of a Mondaq cookie on your machine you can also choose to expire the cookie immediately (remove it) by selecting the 'Log Off' menu option as the last thing you do when you use the site.

    Some of our business partners may use cookies on our site (for example, advertisers). However, we have no access to or control over these cookies and we are not aware of any at present that do so.

    Log Files

    We use IP addresses to analyse trends, administer the site, track movement, and gather broad demographic information for aggregate use. IP addresses are not linked to personally identifiable information.


    This web site contains links to other sites. Please be aware that Mondaq (or its affiliate sites) are not responsible for the privacy practices of such other sites. We encourage our users to be aware when they leave our site and to read the privacy statements of these third party sites. This privacy statement applies solely to information collected by this Web site.

    Surveys & Contests

    From time-to-time our site requests information from users via surveys or contests. Participation in these surveys or contests is completely voluntary and the user therefore has a choice whether or not to disclose any information requested. Information requested may include contact information (such as name and delivery address), and demographic information (such as postcode, age level). Contact information will be used to notify the winners and award prizes. Survey information will be used for purposes of monitoring or improving the functionality of the site.


    If a user elects to use our referral service for informing a friend about our site, we ask them for the friend’s name and email address. Mondaq stores this information and may contact the friend to invite them to register with Mondaq, but they will not be contacted more than once. The friend may contact Mondaq to request the removal of this information from our database.


    From time to time Mondaq may send you emails promoting Mondaq services including new services. You may opt out of receiving such emails by clicking below.

    *** If you do not wish to receive any future announcements of services offered by Mondaq you may opt out by clicking here .


    This website takes every reasonable precaution to protect our users’ information. When users submit sensitive information via the website, your information is protected using firewalls and other security technology. If you have any questions about the security at our website, you can send an email to

    Correcting/Updating Personal Information

    If a user’s personally identifiable information changes (such as postcode), or if a user no longer desires our service, we will endeavour to provide a way to correct, update or remove that user’s personal data provided to us. This can usually be done at the “Your Profile” page or by sending an email to

    Notification of Changes

    If we decide to change our Terms & Conditions or Privacy Policy, we will post those changes on our site so our users are always aware of what information we collect, how we use it, and under what circumstances, if any, we disclose it. If at any point we decide to use personally identifiable information in a manner different from that stated at the time it was collected, we will notify users by way of an email. Users will have a choice as to whether or not we use their information in this different manner. We will use information in accordance with the privacy policy under which the information was collected.

    How to contact Mondaq

    You can contact us with comments or queries at

    If for some reason you believe Mondaq Ltd. has not adhered to these principles, please notify us by e-mail at and we will use commercially reasonable efforts to determine and correct the problem promptly.

    By clicking Register you state you have read and agree to our Terms and Conditions