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COMPETITION LAW IN BRAZIL: 2018 OVERVIEW 35

Nevertheless, according to the majority of CADE’s Commissioners,
Continental’s policy would result in a vertical price restriction; the rule of reason should thus
be applied for assessing whether the behavior was lawful. CADE noted that vertical price
restrictions are presumed unlawful, but this presumption can be put aside if the agent imposing
the restriction does not hold market power.
Based on information provided by Continental, the majority of CADE’s
Commissioners concluded that the company did not hold market power in the markets affected
by its policy. Consequently, the conduct was presumed lawful. In this vein, CADE held that the
conduct would become unlawful if any changes in relation to one or more of three conditions
took place: (i) if Continental acquired market power (presumed when a company holds more
than 20% of the market); (ii) if evidence was found that the policy was in fact a result of an
agreement among retailers to fix their prices; or (iii) if the policy was implemented in an unequal or
discriminatory way, subjecting similar retailers to different rules with no reasonable justifications.
Commissioner Cristiane Alkmin dissented. In her view, minimum pricing
policies affecting competitors should be deemed per se illegal. The Commissioner argued
that Continental’s pricing policy should be declared unlawful because it would force all
resellers to advertise minimum prices, resulting in a degree of price standardization that
would hinder competition. This case reinforces CADE tough stance against resale price
maintenance, except that now there is a clear recognition that evidence of market power is
required for the conduct to be held unlawful.

Unilever: exclusive agreements with ice cream retailers

In October, CADE’s Tribunal ruled that Unilever harmed competition by
entering into exclusivity agreements with ice cream retailers . CADE began investigating
16
Unilever and Nestlé in 2006 after Della Vita , a rival ice cream manufacturer, filed a complaint
17
arguing that the companies entered into exclusivity agreements with several ice cream sellers to
exclude rivals via market foreclosure.
In its decision, the Tribunal reaffirmed the same understanding expressed
in previous cases that exclusivity agreements may harm competition when employed by
dominant players. CADE found that agreements requiring that freezers provided by the
companies should be used exclusively for storing their products had a legitimate business
justification. On the other hand, the agency considered that demanding sales and merchandising
exclusivity in the points of sale produced anticompetitive effects not compensated by
procompetitive justifications.

16 See Administrative Process
No. 08012.007423/2006-27.
17
We represented Della Vita Grande
Rio Indústria e Comércio de Produtos
Alimentícios Ltda. in this matter.