CADE condemns company and individuals for anticompetitive practices in the retail fuel market

The Administrative Council for Economic Defense – CADE condemned, on 12 November 2014, Raízen Combustíveis S/A (former Shell Brasil Ltda.) for abuse of market power in the fuel distribution sector in the cities of Marília and Bauru, in the state of São Paulo, between 1999 and 2003 (Administrative Proceeding no. 08012.011042/2005-61). The distributor influenced the adoption of uniform conduct and fixed prices of fuel retail, imposing the standardization of the accounting systems, prices and profit margins to competing gas stations. CADE’s Tribunal also condemned two commercial managers of the company for participating in the anticompetitive conducts.

Commissioner Márcio de Oliveira Junior highlighted that the instructions in emails sent by the two commercial managers, at the time, showed that Shell restricted the actions of retailers in fuel resale.

According to Oliveira Júnior, Shell’s abusive exercise of market power was held from a constant monitoring of the market, which allowed the company to be sure that the imposed conditions were being fulfilled. If retailers opted to adopt competing prices, the distributor threatened them with eviction notifications.

“The gas stations were compelled to apply the strategy determined by the distributor in the fuel retail service”, stated Oliveira Júnior.

For the anticompetitive practices, Raízen Combustíveis S/A (former Shell Brasil Ltda) was condemned to the payment of a fine of BRL 26,4 million. The individuals involved must pay fines of approximately BRL 32,000 each.