CADE fines fuel cartel in over BRL 150 million in Federal District

On 25 June, the Administrative Council for Economic Defense (CADE) convicted seven fuel stations operating in the market of resale of liquid fuel in the Federal District and surrounding cities. The fines applied exceeded BRL 150 million.  

The Office of the Superintendent General at CADE (SG) launched the administrative proceeding in 2020, after a complaint from the Legislative Chamber of the Federal District (CLDF), which reported the proof of cartel involving several fuel stations from the Federal District and surrounding cities.  

The investigation was based on a considerable set of evidence, collected from an agreement signed with Rede Cascol, search and seizure warrants, and tapped calls made during the “Dubai Operation”.  

In 2017, CADE signed a Cease and Desist Agreement with companies from the same network, their administrators, and some employees, along with the MPDFT. The agreement establishes the payment of a financial contribution of over BRL 90 million, as well as measures to reduce the high participation in the market, and to implement a stricter internal control, such as restructuring and divestiture.

Commissioner Carlos Jacques, rapporteur of the case, highlighted that the evidence against the convicted parties showed that the competitors colluded to agree, fix, and adjust fuel prices in the Federal District and neighbouring cities, harming consumers and the market.  

Mr Jacques made a distinction on the level of participation of each party involved, based on the analysis of evidence and the “corroboration rule”, impacting the tax rates of the fines. 

Regarding some investigated resellers and fuel distributors, the case was dismissed due to lack of evidence.   

The rapporteur stated that CADE exists to ensure that companies have fair competition, based on the quality of services and prices, and not on illegal arrangements that violate the market and harm consumers. “CADE’s mission is to ensure competition on the merits of resellers, without anticompetitive agreements to distort market operations and harm end consumers”, he claimed. 

Thus, the Tribunal of Cade convicted Gasolline, JB, Auto Shopping, Original, Posto Central, Jobral, and Xavante to pay fines over BRL 149 million for involvement in the cartel. Ten convicted individuals are to pay over BRL 5 million in fines. The total amount of fines imposed to the parties is BRL 154,559,346.01.