CADE signs cease and desist agreement with Google

On 10 December, the Administrative Council for Economic Defense (CADE) signed a cease and desist agreement with Google, investigated for alleged anticompetitive practices related to the Android operating system in Brazil. 

The investigation analysed three contracts signed with mobile device manufacturers and operators: Anti-Fragmentation Agreement (AFA/ACC), Mobile Application Distribution Agreement (MADA), and Revenue Sharing Agreement (RSA). 

According to the Office of the Superintendent General at CADE (SG/CADE), the clauses could restrict competition by making access to essential services in the Android ecosystem conditional to the pre-installation, prominent placement, or exclusivity of Google apps, such as Google Search and Google Chrome. 

In order to eliminate competitive risks, the obligations established in the cease and desist agreement aim to prevent the licensing of Google Play upon pre-installation or promotion of Google Search and Google Chrome, prohibiting any retaliation against manufacturers who do not use these apps.  

In addition, Google must inform partners about the new conditions, and waive exclusivity clauses, thereby refraining from linking RSA payments to the exclusivity of search services.  

The agreement also establishes transparency measures, monitored by the SG, as well as deadlines for communicating the new conditions to manufacturers and operators. 

For Mr Gustavo Augusto, president of CADE and rapporteur of the case, the cease and desist agreement is an efficient solution, aligned with the best international practices in competition law. “The negotiated obligations eliminate the potential anticompetitive effects, and create equal conditions for the operation of the Android ecosystem in Brazil, protecting competition and consumers,” he stated. 

Mr Augusto also highlighted that the consensual solution avoids extended litigation, contributing to increase legal certainty in the digital market. “The agreement allows for immediate correction of the conduct under investigation, with concrete benefits for the competitive environment. The measure is in line with other jurisdictions, and preserves the efficiencies of the Android compatibility model, without harming dynamism or innovation in the sector," he emphasised. 

Upon approval, the investigation is suspended until the parties fulfil their obligations. The agreement must be signed within 30 days and will be made public, except for confidential information.