CADE condemns cartel in the international market of refrigerator compressors

The Tribunal of the Administrative Council for Economic Defense – Cade, in the judgment session of 16 March 2016, condemned the companies Household Compressors Holding S.p.A (former ACC – Appliances Components Companies S.p.A.), Danfoss A/S e Panasonic Electric Works Co. Ltd. (former Matsushita Electric Works, Ltd.), as well as three individuals related to companies of the groups Tecumseh and Whirlpool/Embraco for cartel formation in the international market of refrigerator hermetic compressors (Administrative Proceeding 08012.000820/2009-11). The fines imposed sum up to BRL 21.3 million.

The hermetic compressors are used in the refrigerator systems, especially in household appliances, such as fridges, freezers and air conditioning.

According to the reporting commissioner Márcio de Oliveira Júnior, the companies, through their representatives, held meetings and exchanged messages in order to share sensitive commercial information, as well as to discuss price readjustment rates and the control of compressors supply around the world. The collusion harmed Brazilian and foreign consumers at least between 1996 and 2008.

“The contact between the colluded companies’ representatives was frequent. In various moments there has been the exchange of confidential e-mails and personal and phone contacts, in order to maintain the cartel and prepare future meetings”, explained the reporting commissioner. Furthermore, the commissioner noted that “the case has countless evidence that the international cartel of hermetic refrigerator compressors effectively occurred and had effects in Brazil”.

The proceeding was opened in July of 2009, based on evidence of cartel brought to Cade by a Leniency Agreement – when the participant in an anticompetitive practice reports the violation and collaborates with the investigations in exchange for non-punishment or reduction of the penalties applied. In February of 2009, in order to collect evidence, dawn raids  were conducted in companies’ offices and executive’s houses, located in Brazil, the United States and Europe. This is the first case judged by Cade, in which there was international cooperation for the conduction of dawn raids.

In light of the declaration of fulfillment of obligations established by the Leniency Agreement, Cade’s Tribunal determined the extinction of the public administration’s ability to sanction the beneficiaries (Grupo Tecumseh and individuals related to the group). According to the article 87 of Law No. 12.529/11, with the fulfillment of the Leniency Agreement, the ability to sanction the crimes related to the infraction in question is automatically extinguished.

Regarding the other accused parties, Cade has closed the case in relation to the companies Whirlpool S/A, Whirlpool Unidade Embraco Compressores e Soluções de Refrigeração, and other nine individuals related to those companies, because of the Cease and Desist Agreements (TCC in its acronym in Portuguese) signed by them before the case went to trial. TCCs do not have automatic criminal repercussion and possible crimes may be eventually prosecuted in the criminal sphere by the competent authorities, such as the Federal Police, the Public Prosecution Service and the Judiciary branch.