CADE signs agreement with Gympass in Brazilian health club market

On 21 September 2022, the Administrative Council for Economic Defense (CADE) ratified the Cease and Desist Agreement with Gympass on the administrative enquiry that investigates alleged anticompetitive conduct in the Brazilian sector of health club aggregator platforms.

The enquiry investigates whether the firm is abusing its dominant position in the market by using clauses that allow Gympass to control the minimum price practised by the businesses that adhere to the platform―securing the prices in the Brazilian territory―and exclusivity clauses in contracts.

The Office of the Superintendent General issued an expert opinion recommending the ratification of the agreement because it understands that the firm’s proposal follows all the legal requirements, is beneficial for the government, and has the potential to create efficiencies in the market.

In the case of unilateral conduct, the signature of Cease and Desist agreements is especially beneficial considering that it immediately ends the alleged antitrust violation linked to the signatory firm.

According to the terms provided in the Cease and Desist Agreement, Gympass exclusivity clauses with the affiliated gyms are to answer to the proof of efficiency and correspond to a maximum of 20% of its base of gyms in cities or districts.

The agreement also prohibits the usage of advantage clauses (like Most Favoured Nation clauses) and any clauses that prevent their business partners from, after the end of their respective contracts, adhering to other aggregator platforms.

Additionally, CADE is to monitor compliance with the terms provided in the agreement alongside a trustee nominated by the signatory and approved by the agency. Yet, in case of non-compliance with the time limit provided, a daily fine is to be applied.

Access case no. 08700.004136/2020-65.