General Superintendence investigates power consumption measurement systems cartel

The General Superintendence of the Administrative Council for Economic Defense – CADE opened, on 10 October 2014, an administrative proceeding to investigate an alleged cartel in the national market of residential and commercial power consumption measurement systems (Administrative Proceeding no. 08700.008413/2014-60). These systems are technological solutions that measure the volume of transmitted energy in specific points of the power grid for pricing purposes and for the administration of the network.

The evidence point that the investigated companies – Dowertech Eletra, Elo, Elster, Itron, Landis+Gyr, and Nansen would have fixed prices, exchanged strategic information, and shared market and clients, establishing the market share goals for each one of them. The charged companies would have also arranged prices, conditions, benefits and abstentions in public and private bids.

Such anticompetitive conducts would have occurred, at least, between 2011 and 2013, but there is evidence that the practice would have also been performed in previous years, possibly since January 2005.

The investigation began after the signature of a leniency agreement between CADE’s General Superintendence and Itron, which renounced to the secrecy of its identity as the beneficiary of the agreement, with the authorization of the antitrust agency.

With the leniency, foreseen in the Law 12.529/2011, a cartel member can report the illicit in which they take part and collaborate with the case’s investigative authorities in exchange of extinction or reduction of criminal and/or administrative penalties.

CADE encourages the signature of leniency agreements, an important tool for anti-cartel enforcement in the country. The agency also assesses as positive when legal entities or individuals report the alleged infringements in which they took part. Since the first agreement of the Brazilian Leniency Program, in 2003, 40 agreements were signed.

With the opening of the administrative proceeding, the charged parties will be notified to present their defenses. After this phase, the General Superintendence will issue an opinion recommending either the condemnation or the case filing to CADE’s Administrative Tribunal, which is responsible for the final decision. In condemned, the companies could pay fines of up to 20% of their respective annual gross revenue in the market in which the infringement happened.