CADE’s Superintendence investigates alleged anticompetitive conducts of Oi

The General Superintendence of the Administrative Council for Economic Defense – CADE started an Administrative Proceeding (PA no. 08700.010110/2012-46) to investigate alleged anticompetitive practices in the Brazilian telecommunications market. The violations to the economic order would have happened between 2008 and 2009 by companies of the Oi group.

The potentially harms to competition were denounced to CADE by the National Telecommunications Agency – ANATEL in November 2012. A proceeding was started in the regulatory agency after administrative complaint registered by its competitor Global Village Telecom Ltda, or GVT for its acronym, in 2009.

The allegations are that Oi would have cut GVT’s telephone connecting cables in the shared infrastructure between operators of telephone services and cable TV in residential buildings. ANATEL emitted a protective order in 2009 establishing the practice to cease. The Federal Justice Court in Brasília have already rendered preliminary injunction ordering the same, also in 2009.

Oi is also charged to provoke slowness and alleged technical failures in GVT’s data traffic when the competitor used the interconnections with its network to operate.

The proceeding started by CADE will also investigate alleged abuses aiming at hampering the transfer of subscribers from Oi to GVT. According to the complaint, Oi’s employees would have posed as clients and called GVT’s call center asking them to cancel numerical portability actions of people that had already asked the migration.

Charges that Oi’s employees would have also threatened GVT’s telephony system installers in Salvador, Bahia, are yet to be investigated.

CADE’s General Superintendence understood that the presented evidences are relevant and, if proven, could lead to potential harms to competition and to consumers in the telecommunications market, justifying a deeper analysis by the Competition Authority.

Along the opening of administrative proceeding, Oi will be notified to present defense in a 30 days period. After this, the Superintendence will render opinion recommending the condemnation or the filing, and will send the case to final judgment by CADE’s Tribunal.

The practice of violations of the economic order subjects companies to the payment of fines between 0,1 and 20% of its revenue, among other penalties established by Law.