CADE convicts school transport companies for bid rigging in São Paulo

On 26 February, CADE convicted two companies for cartel in a procurement that took place in 2019, when the São Paulo State Department of Education (SEDUC-SP) purchased school transport services for public schools in the municipality of Fernandópolis.   

The investigation started after a complaint from SEDUC-SP that stated that the companies Mayfran and New Hope allegedly adopted anticompetitive practices during the procurement process.  

Evidence showed that both companies had the same internet protocol address (IP), an indication of the exchange of information between them.  

The case review found indications of collusive behaviour between Mayfran and New Hope in 3 of the bidding lots. Moreover, their previous commercial relationship, evidenced through a business partnership agreement, reinforced indicatives of a communication channel between the companies. 

According to Ms Camila Pires Alves, the rapporteur of the case, although the coincidence of the IPs does not prove the bid rigging, it constitutes direct evidence, and endorses the alleged communication or coordination between the agents prior to the bidding. “In sum, indirect evidence allows reasonable and plausible hypothesis formulation”, she stated. 

Ms Alves added that the companies are not exactly required to provide information for the fact-finding, but need to give plausible reasons to justify their behaviour, despite their wrongdoings. “CADE does not require that the companies involved provide evidence of the facts; a basic rationale to justify the misconduct is enough.This standard of rebuttal is already established in CADE’s case law, which advocates for a careful and comprehensive use of indirect evidence for inference of illegality only if there are no alternative plausible reasons.” Additionally, the rapporteur said that “The defendants did not submit rationales or alternatives that could affect the indirect evidence in the case record.”

Thus, the Tribunal convicted the companies Mayfran and New Hope to pay the respective fines of BRL 763,903.92 and 842,320.09, totalling over BRL 1.6 million.

The Tribunal also ordered the submission of the decision in an official letter to the Prosecution Services of the State of São Paulo (MPE-SP) for knowledge and for possibly proposing a lawsuit for civil damages, as well as the adoption of measures considered applicable within the criminal field.

Access Case no. 08700.005876/2019-85.