CADE’s General Superintendence recommends condemnation of unions and individuals for price fixing

The General Superintendence of the Administrative Council for Economic Defense – CADE rendered two opinions on 13 August 2014 suggesting the condemnation of Sindicato do Centro de Formação de Condutores, the Union of Driver Training Centers of the state of Pernambuco, and of Sindicato dos Fotógrafos, Lojistas e Cinegrafistas, the Union of Photographers, Shopkeepers and Cameramen of the state of Piauí, as well as of the presidents of both entities, for violations to the economic order due to the development and disclosure of price tables.

The Administrative Proceeding no. 08700.006292/2012-51 was opened in March 2014. In the recent issued opinions, the General Superintendence points that the Union of Driver Training Centers of the state of Pernambuco developed and disclosed a table with an increase in the prices of the services offered by the driving schools at the beginning of each year. From 2013 to 2014, for example, the union suggested an increase of 62% in the value of services. The entity also supervised if the fixed prices were being adopted by the companies.

As for the Administrative Proceeding no. 08700.006965/2013-53, opened in February 2014, the Superintendence verified that the Union of Photographers, Shopkeepers and Cameramen of the state of Piauí developed and disclosed a price table for the services, which had to be adopted by the shopkeepers and professionals of this sector. Furthermore, the Union’s president himself supervised the use of the table and coerced the ones who did not follow the determined values. Threatens were registered in police reports, which are part of the evidence collected by the Superintendence.

According to recent decisions from CADE’s Tribunal, the development and disclosure of price tables by associations and unions, in some cases, even if only suggestive, work as a mechanism of price standardization and competition dilution, since the associated companies tend to use this parameter to define the prices to be charged from the final consumer. The General Superintendence has been following the Tribunal’s understanding in these investigations and it has been considering that the development and disclosure of price tables by associations and unions can constitute an offence against competition and the consumers’ rights.

The cases are now to be judged by CADE’s Tribunal. If condemned, the unions will be subjected to the payment of fines that can vary from BRL 50,000 and BRL 2 billion. The individuals are subjected to the fine of 1% to 20% of the one imposed to the unions.

New investigations – On 13 August 2014, the General Superintendence opened an administrative proceeding against APRO – Associação Brasileira de Produção de Obras Audiovisuais, the Brazilian Association of Production of Audiovisual Works, and its managers to investigate the practice of price fixing tables (Administrative Proceeding no. 08700.010847/2013-40). The investigation began after a complaint from the ABA – Associação Brasileira de Anunciantes, the Brazilian Association of Advertisers.

The Superintendence identified evidence that APRO develops and discloses a list of prices to each of the services offered by producing companies of audiovisual works responsible for advertising campaigns.

With the opening of the proceeding, the charged parties were summoned to present their defense. In the end of the investigation, the General Superintendence will issue an opinion recommending either the condemnation or the filing, and will forward the case to final judgment by CADE’s Tribunal.