CADE conducts dawn raid to investigate alleged cartel in the market of orthoses and prostheses

CADE’s General Superintendence launched, on 1 December 2015, with the support of the Brazilian Federal Police, the Operation “Merchant of Venice”, for the fulfillment of search and seizure warrants in eight municipalities in four states in order to investigate an alleged cartel in the Brazilian market of orthoses and prostheses.    

There are suspicions that some manufacturers and retailers have been practicing collusion in public bids for the acquisition of implantable medical devices and possibly in private acquisitions of hospital networks and health insurance plans. 

The investigated conducts may involve agreements among competitors regarding bids, market division, and price fixing. These illegal conducts, if proven, tend to create restrictions of supply and higher prices, affecting consumers and overburdening the health system. 

The investigation was based on the analysis of data on public bids collected by CADE, which indicated suspicious collusive behavior, as well as on complaints of public procurement agencies, contributions from private buyers and analyses of the Federal Court of Accounts (Tribunal de Contas da União - TCU).  

The seized material will be included in the ongoing confidential administrative inquiry within the General Superintendence. If the existence of robust evidence of cartel conduct is verified, a public Administrative Proceeding will be opened against the companies, and individuals, which may  eventually be accused. 

In the interest of the investigation, CADE will not publish, for now, further details about the administrative inquiry and the dawn raid operation. 

The title of the Operation – “Merchant of Venice” – refers to the play by William Shakespeare “The Merchant of Venice”, in which a loan shark charges his debtors by claiming a pound of their flesh.