CADE upholds interim measure against CAIXA and FEBRALOT

On 11 October, the Tribunal of the Administrative Council for Economic Defense (CADE) ruled to uphold the interim measure granted by the Office of the Superintendent General (SG/CADE) against the Brazilian bank CAIXA and the Brazilian lottery federation FEBRALOT. The parties appealed the decision under the administrative proceeding that investigates antitrust violations in the lottery market.

The SG investigates if CAIXA, which holds a dominant position and rulemaking power over activities related to gambling/betting, has abused its market power to deter lottery shops from doing business with online platforms. It also analyses allegations that CAIXA and FEBRALOT have promoted defamatory campaigns against online platforms, suggesting that the economic activity carried out by online platforms is illegal. Thus, to prevent domestic lotteries from entering commercial relationships with online intermediation platforms.

The SG granted an interim measure against CAIXA and FEBRALOT to maintain a competitive environment in the online lottery market during the investigation. The measure requires CAIXA to refrain from imposing the referred sanctions on lottery shops.

Moreover, CAIXA must stop all public communications that suggest the illegality of online intermediation platforms, remove any online press releases published against the platforms, and make public the full content of CADE's decision. Another order was issued to FEBRALOT, especially concerning the removal of similar statements from its website.

CADE states that the decision is necessary and must be held. According to Commissioner Gustavo Augusto, rapporteur of the appeal, the allegations of CAIXA and FEBRALOT were unsubstantiated and there are no grounds for suspension of the interim measure. Regarding the ban of lottery operators based on the relationship with online intermediation platforms, the rapporteur highlighted that it was an abuse of dominance.

"Neither CAIXA nor lottery operators can refuse to supply goods or services within what is considered normal payment and business practices, subject to antitrust violation." he stated. Thus, it cannot refuse or hamper customer service for representatives of online intermediation platforms willing to bet/gamble under usual market conditions.

The scrutiny began when AIDIGLOT, the Brazilian association of digital intermediaries of lottery games, reported the case, which is still pending before the authority.

 Access Case no. 08700.003430/2023-01.