Sign In


Antitrust | CADE changes rules for collaborative agreements

CADE changes rules for collaborative agreements

CADE's Tribunal approved, on October 18, 2016, a resolution defining new rules for mandatory filing of collaborative agreements between companies that meet the revenue threshold criteria established by Law No. 12,529/2011. CADE's Resolution No. 17 (Resolution 17) stipulates the concept of "collaborative agreements" and the cases in which these agreements are subject to mandatory filing. 

Currently, collaborative agreements are regulated by CADE's Resolution No. 10, which has been in effect since January 2015. Pursuant to Resolution No. 10, collaborative agreements were subject to mandatory filing if they were for a period of more than two years and: 
i) the parties were horizontally related in relation to the subject matter of the agreement and their combined shares in the relevant market affected by the agreement was equal to or in excess of 20%; or 
(ii) the parties were vertically related in relation to the subject matter of the agreement provided that:  (a) at least one of them had 30% or more of the relevant market affected by the agreement; and (b) the agreement established either an exclusive relationship between the parties or profit or loss sharing. ​  Resolution 17 changes significantly the definition of agreements subject to mandatory filing with CADE. According to this new resolution, a collaborative agreement is any agreement that establishes a joint enterprise with the purpose of engaging in an economic activity, provided that the agreement stipulates sharing of risk and profits between the contracting parties and the parties or respective economic groups compete in the market related to the agreement. "Economic activity" is defined by Resolution 17 as the acquisition or offer of goods or services in the market that could, at least theoretically, be exploited by a private company operating for profit.

The minimum term for collaborative agreements which triggers the requirement for mandatory filing continues to be two years. Any agreement for a period of less than two years is only subject to mandatory filing with CADE if the two-year period is reached or exceeded by means of a renewal. In this case, agreements must be filed with CADE prior to renewal and its effectiveness is then contingent upon CADE's clearance.

The new rule represents a step forward in the definition of the collaborative nature of agreements subject to mandatory filing, discarding the criteria based on market share and vertical links, which by themselves do not characterize collaboration under Law No. 12,529/11. The withdrawal of the minimum 20% market share requirement enhances legal certainty because it facilitates objective analysis of the filing requirements for transactions. Before Resolution 17, contracting parties were required to analyze relevant market definition theories that could be adopted by CADE, but which may not necessarily have been adopted in CADE's precedents, in order to try to determine whether a filing was necessary. 

In particular, Resolution 17 is more selective than CADE's Resolution No. 10, which covered recurrent commercial agreements, frequently irrelevant from a competition standpoint. In this sense, this new CADE Resolution excluded from the list of agreements subject to mandatory filing those resulting in vertical supply links between the parties. The choice is certainly more consistent with the goals and wording of Law No. 12,529/11.

The Resolution will come into effect 30 days after its official publication. Agreements entered into before this effective date, that last two or more years upon renewal, only need to be submitted for analysis by CADE if they fulfill the criteria established by the Resolution.
See our recent publications