CADE signs agreement in alleged bid rigging cartel in the market of hospital laundry services in Rio de Janeiro

he Tribunal of the Administrative Council for Economic Defense – CADE signed on 30 July 2014 a Cease and Desist Agreement (TCC for its acronym in Portuguese) with Atmosfera Gestão e Higienização de Têxteis S/A. By the agreement, the company commits to stop the investigated conducts in the proceeding that analyzed an alleged cartel in procurements carried out by public hospitals of the state of Rio de Janeiro to contract hospital laundry services (Administrative Proceeding no. 08010.008850/2008-94).

In the agreement signed, the company admits its participation in the investigated practice and commits to collect BRL 2.95 million as pecuniary contribution. The amount corresponds to almost 200% of the profit obtained from the provision of services to public hospitals in Rio de Janeiro in 2005, the last year that the investigated conduct would have occurred.

According to the investigations, the cartel would have operated between 1999 and 2005 through market division agreements, in which the companies previously established who would win the procurement and which companies would present proposals with higher prices, deliberately intended not to win the procurement, but only to simulate competition.

The proceeding was opened in December 2008, after evidences were collected in a dawn raid of the Operation Roupa Suja, carried out by the Federal Police and by the Public Prosecutor’s Office of the State of Rio de Janeiro.

To the Reporting Commissioner, the agreement contributes to the implementation of the competition defense policy in terms of deterrence, especially due to the fact that the company admitted its participation in the investigated facts and refrained from incurring in the conduct investigated by the proceeding.

With the signature of the TCC, the proceeding remains suspended in relation to Atmosfera Gestão e Higienização de Têxteis S/A until CADE certifies the complete fulfillment of the established obligations.