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Brazil's Cade applies fines for cartel of underground and submarine cables

Christian Fernsby ▼ | April 17, 2020
In the judgment session on April 15, the Administrative Council for Economic Defense (Cade) condemned four companies and three individuals for international cartel, with effects in Brazil, in the market of underground and submarine cables.
Submarine cable
Cable   Submarine cable
The products are used in the transmission of electrical energy between the generating and distribution units and the final users of the service. The total amount of fines applied is BRL 20.9 million.

Topics: Brazil fines submarine cable

Cade's investigation began with the signing of a leniency agreement with Sumitomo Eletric Industries Limited, Hitachi CableLtd, and J Power Systems, which confessed the participation in the anti-competitive practices and provided documental evidence concerning the operation of the cartel.

According to the vote of the Reporting Commissioner, the former Commissioner Paulo Burnier, the collusion was carried out through periodic contacts between manufacturers of underground cables and submarine cables.

The competitors sent e-mails and held several multilateral meetings, aiming to exchange sensitive information, fix prices, divide markets and allocate clients. Manufacturers in Europe, Japan and South Korea participated in the collusive practice, which lasted from 1990 to 2004.

For the anticompetitive conducts that caused damages to consumers of electrical energy in Brazil, Cade's Administrative Tribunal condemned the companies Nexans, Prysmian, Exsym Corporation and Viscas Corporation to pay fines in the total amount of BRL 20.5 million. Moreover, the Tribunal applied an amount of BRL 400 thousand in fines to the three individuals.

Regarding the company ABB and three other individuals investigated for participation in the cartel, Cade decided for the closure of the proceedings due to the full compliance with the respective Cease and Desist Agreements (TCC). According to these agreements, the parties committed to cease the investigated practices and to pay BRL 1.6 million, in total, as a pecuniary contribution.

The case was also closed in relation to the companies LS Cable and Taihan Eletric due to lack of evidence.

With the final judgment of the case, Cade's Tribunal withdrew the punitive claim of the Government in favor of Sumitomo Eletric Industries Limited, Hitachi CableLtd, and J Power Systems, due to the full compliance with the leniency agreement obligations.

Cade's Tribunal also determined to send the decision to the Federal Prosecution Services in the State of São Paulo.