CADE and Regulatory Agencies in Brazil
CADE (Administrative Council for Economic Defense)
What is Law 8884/94?
This law, known as the Competition Protection Law, prevents and punishes offenses against the economy based on free enterprise and free competition. It ensures the prevention and prosecution of abuses of economic power.
What is CADE?
The Administrative Council for Economic Defense (CADE) was created in 1962 as an organ of the Ministry of Justice and became a federal agency linked to the same Ministry in 1994. CADE guides, investigates, and acts as a guardian against abuses of economic power by companies with market power.
CADE’s Structure
CADE consists of a Plenary composed of a chairman and six members, appointed by the President of the Republic and approved by the Senate for a two-year term. CADE also has its own Prosecutor.
How CADE Handles Cases
CADE’s decisions are taken in public trial sessions held every 15 days in BrasÃlia. All cases have a designated rapporteur, and each Plenary member has the right to vote. The President of CADE has the right to a tie-breaking vote. Decisions are taken by a simple majority.
CADE’s Roles
CADE has three main roles:
- Preventive: Analyzing mergers and acquisitions to prevent harm to competition. CADE can impose conditions on companies, such as asset disposal or contract changes.
- Repressive: Prosecuting anticompetitive practices like cartels, joint sales, price fixing, and exclusive agreements.
- Educational: Spreading the culture of competition through seminars, courses, lectures, publications, and partnerships with institutions.
Appealing CADE’s Decisions
CADE’s decisions are not subject to review within the Executive Branch. Penalized companies can challenge decisions in the Judiciary.
Role of the Federal Prosecutor
The Federal Prosecutor participates in cases reviewed by CADE through a member appointed by the Attorney General’s Office, after consulting the Board.
Regulatory Agencies
Definition
Regulatory agencies are public authorities within the indirect administration, responsible for regulating specific markets and industries. They are politically neutral and impartial, stabilizing the coexistence of public, collective, and private interests.
Features
- Autonomy: Establish their own rules.
- Supervisory Activity: Oversee economic agents in regulated markets.
- Sanctioning Activity: Impose sanctions for non-compliance with laws, regulations, or contracts.
- Judicial Activity: Resolve administrative conflicts between market stakeholders, often through arbitration.
- Technical Character: Regulate specific, often imperfect, markets requiring technical expertise.
- Financial Autonomy: Collect regulatory fees and receive budgetary allocations.
- Limited Autonomy from the Legislative Branch: Subject to legislative changes and potential abolishment.
- Subject to Audit: Public funds used by agencies are subject to audit and control.