CADE’S General Superintendence investigates cartel of replacement auto-parts

The General Superintendence of the Administrative Council for Economic Defense – CADE  initiated on 29 September 2016, an administrative proceeding to investigate  the practice of cartel in the independent replacement  auto-parts market (Administrative Proceeding n° 08700.006386/2016-53).

According to the opinion, there is evidence that 28 companies that operate in the sector shared commercially sensitive information. The objective of the conduct was to establish standards to set the decision making process related, for example, to the transfer of cost increase on prices charged on the products in the market.

The exchange of information would have  enabled the companies to  anticipate prices,  projected sales , production,  and business strategies of  each other to structure a coordinated action,  with the purpose of  harming or to restricting the competition in the  auto-parts  market.

According to the General Superintendence, at least, 66 individuals related to the companies conducted all of these adjustments.

The practices would have been  conducted by e-mails, telephone calls  and data sheets, as well as  face-to-face meetings periodically held  in the companies’ facilities and in restaurants. These anticompetitive conducts would have possibly occurred between 2003 and 2016.

With the filing of the administrative proceeding, the parties involved shall be notified to present their defense.  By the end of the legal discovery phase, the General Superintendence shall issue an opinion either for the condemnation or for the closing of the case. The opinion shall then be submitted to CADE’s Tribunal, which is responsible for the final decision.

Others investigations in the sector

Between 2014 and 2016, the General Superintendence initiated nine administrative proceedings to investigate cartels on the sector. Among them,  sectors related to sparking plugs (08700.005789/2014-13); anti-friction bearings (08012.005324/2012-59); clutch facings (08700.010321/2012-89); termal sytems – that includes radiators, capacitors and heating systems, ventilation and air condition (08700.010323/2012-78); windshield wipers (08700.010320/2012-34); safety devices for automobiles – such as safety bells, airbags and steering wheel (08700.004631/2015-15); dampers (08700.004629/2015-38) and ceramic substrates for automobiles (08700.009167/2015-45).

Other four markets have already been investigated by means of dawn raids conducted by the General Superintendence on August 2014, and can still result in the prosecution of a new administrative proceedings. The relevant markets are automotive lighting (headlights, lanterns and brake lights); emergency switches (hazard lights and turning signal); access mechanism (cylinders kits, handles, locks and steering locks) and automotive clutches markets. There are other ongoing investigations in the auto parts sector.