CADE convicts companies and individuals for fuel cartel

On 13 May, the Administrative Council for Economic Defense (CADE) convicted three companies, Comércio de Combustíveis Stang Ltda, Santos & Merlo Ltda, and Pato Comércio de Combustíveis Ltda, besides two individuals, for antitrust violations in the market of resale of liquid fuel, in Coronel Vivida, in the Brazilian state of Paraná (PR).

Commissioner José Levi, rapporteur of the case, investigated the alleged cartel in public procurements and price fixing in the fuel retail market. As a result, the companies and individuals convicted will pay around BRL 50 million in fines.

According to Mr Levi, evidence shows that the market players had previously agreed on the division of items in reverse auctions promoted by the City Hall of Coronel Vivida (PR), simulating competition in tenders held in 2017.

Evidence collected from text message excerpts revealed that the parties involved had defined the winning lots related to petrol, ethanol, and diesel supplies based on reverse auctions in the same year.

In addition, there is a body of evidence indicating a price fixing agreement in the fuel retail market, since the messages analysed showed the negotiations among competitors to raise prices in the petrol pumps and maintain the profit margin in the local market.

The Tribunal of CADE denied the preliminary objects raised by the defendants, including requests to stay the proceedings. The rapporteur highlighted that the administrative and criminal domains are self-contained, and there is no court decision to override the evidence in the records.

CADE also imposed an additional administrative sanction to the convicted individuals, forbidding the use of their names in commercial transactions, or as representatives of the companies for a five-year period, due to the severity and reiteration of the conducts.