CADE convicts cartel members in the Brazilian market of pipes and fittings

On 27 April 2022, the Administrative Council for Economic Defense (CADE) convicted the firms Brastubo Indústria e Comércio, Poly Easy do Brasil, and three individuals for a cartel in the Brazilian market of high-density polyethylene (HDPE) pipes and fittings. The conduct affected the sectors of gas supply and sewage. The Tribunal imposed BRL 33.1 million in fines.

In 2016, the Office of the Superintendent General of CADE launched the case to investigate illegal agreements between firms to rig public and private procurements related to the acquisition of HDPE pipes and fittings used in the infrastructure of the gas supply sector. The investigation counted on the cooperation of cartel members who signed Leniency and Cease and Desist agreements.

Considering the information obtained through the Cease and Desist Agreement signed with Polierg, the antitrust practice also affected the market of pipes and fittings used in the sewage and water supply sectors. The investigations indicate there was manipulation in 44 public and private procurements—11 in the gas sector and 33 in the sewage sector—and 30 customers were affected.

The rapporteur of the case, Commissioner Lenisa Prado, highlighted in her vote the enormous amount of evidence found during the administrative proceedings. "There is abundant evidence that proves the existence and operation of the cartel from 2004 to 2015. They were involved in price-fixing, customer and market allocation schemes, and public and private procurement division schemes," she declared.

The Tribunal of CADE convicted Brastubo, Poly Easy, and three individuals, imposing BRL 33,175,456.52 in fines for participation in anticompetitive conduct.

The Tribunal granted immunity from prosecution to Tigre and seven individuals linked to the firm for fulfilling their leniency obligations. It also dismissed the claims against FGS Brasil, Polierg, and four individuals, as they honoured their Cease and Desist Agreements.

Finally, the Tribunal referred the case back to the Office of the Superintendent General for a new administrative inquiry against Poly Easy Comercial, Kanaflex Indústria de Pláticos, and Politejo Brasil - Indústria de Pásticos to examine circumstantial evidence found during the investigation.

Access Case no. 08700.003396/2016-37.