CADE convicts companies for gun jumping

On 16 October, the Administrative Council for Economic Defence (CADE) signed an agreement with Dom Atacarejo S.A. and DMA Distribuidora S.A. for completing the acquisition of two self-service retail stores in the state of Rio de Janeiro before CADE's clearance, a practice known as gun jumping.
  
In November 2023, the companies submitted the transaction to CADE for review and the agency unconditionally cleared the acquisitions in February 2024. However, in January 2024, the Office of the Superintendent General (SG/CADE) found evidence of gun jumping, and the parties admitted to the violation. Consequently, the authority launched an administrative procedure in the same month.Rapporteur Diogo Thomson acknowledged the gun jumping during the merger review. Thus, it is necessary to consider some particularities of the case to calculate the fine provided for in Article 88, Item 3, of Law 12,529 of November 2011, and regulated by CADE Resolution 24/2019.

SG/CADE considered that the provisions of Article 21, Item 2, of Resolution 24/2019, regarding late payment penalties, as well as Article 21, Item 3, regarding intention to consummate the deal before CADE's approval did not apply, and the latter was not found in the case at hand. According to the records, the defendants acted in good faith.

CADE considered the intention of the parties when calculating penalty enhancements, and the rapporteur concluded that the maximum legal tax rate in the specific case should be reduced to 0.1 %.

Access Case no 08700.000434/2024-18.