Page 32 - COMPETITION LAW_Flip

32
SINGLE-FIRM CONDUCT

The Superintendence released a report supporting the consent decrees.
This report notes that MFN clauses can have procompetitive justifications and are acceptable
to some extent to avoid free-riding – therefore, CADE agreed with the maintenance of these
clauses to guarantee the best conditions in relation to other on-line platforms or travel agencies.
However, CADE found that the “wide” MFN clauses preventing the hotel chains from offering
more favorable conditions directly to consumers could harm competition. Thus, the investigated
companies agreed to alter MFN clauses to exclude such “wide” provisions.
This was the first single-firm conduct case concerning the use of MFN
clauses by online platforms analyzed by CADE. While it ended in a Cease and Desist agreement,
CADE indicated that it does not see this practice as a per se violation, recognizing that it may
result in efficiencies. Nonetheless, the agency also clearly identified that “wide” MFN clauses
may harm competition.

Petrobras-UTE: discrimination and refusal to deal

In 2015, state-owned Petrobras was accused of refusal to deal/price discrimination
by a thermoelectric power company called UTE . According to UTE, Petrobras was refusing
12
to negotiate and imposing discriminatory conditions to the supply of natural gas. UTE argued
that Petrobras held a monopoly in the distribution of natural gas, which was an essential
input for UTE’s business. For these reasons, UTE argued that refusal to deal/discrimination
were an antitrust violation.
In April, CADE’s Superintendence decided to close the preliminary inquiry.
Firstly, it found that there was no evidence that Petrobras was indeed refusing to negotiate or
imposing discriminatory conditions to UTE. Moreover, the Superintendence found that even
if Petrobras had refused access, the conduct could not have harmed competition. According
to the Superintendence, UTE held a market share of only 2,94% in the downstream market
for electricity production.
Thus, even if Petrobras’ conduct had driven UTE out of the market, the
impact on electricity production would be very limited and unable to allow Petrobras to
dominate the market and increase prices. In May, CADE’s Tribunal asked the Superintendence
to start an investigation on whether Petrobras’ refuses to supply natural gas to other
thermoelectric plants.
The probe shows that CADE’s Superintendence will not move forward
with abuse of dominance claims in the absence of a coherent theory of harm based on sound
economic principles.

12 See Administrative Inquiry
No. 08700.009007/2015-04.