CADE acknowledges gun jumping involving Digesto and JusBrasil

On 20 March, the Administrative Council for Economic Defense (CADE) acknowledged that the firms Digesto and JusBrasil completed an acquisition before CADE’s clearance — a practice best known as gun jumping. Although there was an antitrust violation, the Tribunal decided not to fine the firms due to a reasonable controversy in the precedents related to the case. 

The authority launched an administrative proceeding to investigate the acquisition agreement following a complaint from January 2023, received by the Office of the Superintendent General.   

When questioned, the petitioners confirmed that Digesto's shares had been sold to Jusbrasil. However, the parties added that they did not notify CADE because the turnover of the firms involved was below the limit established in the competition law. 

At first, the transaction was not notified to CADE, however, when analysing other cases adjudicated by the authority, the Rapporteur Commissioner Victor Oliveira Fernandes noticed that the criteria for notifying transactions in which investment funds are only indirectly involved are unclear, as it happens in this particular case. According to the commissioner: “The wording of Article 4 of Resolution 33/2022 is ambiguous on this matter, so it is not possible to define whether the indirect involvement of funds in the corporate structure would be enough to adopt different configurations of economic groups set out therein." Thus, it would be unreasonable to impose a fine for gun jumping. "The lack of clarity in the parameters adopted by the antitrust authority when assessing the criteria for mandatory notification, as seen in many of the legal theories proposed, prevents us from concluding that the parties were involved in a wilful or even negligent antitrust violation," he stated. 

The Tribunal of CADE agreed with the rapporteur commissioner’s statement and unanimously decided not to fine Digesto and JusBrasil for gun jumping.