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CARTELS

Soda ash: export cartel?

CADE’s Tribunal unanimously dismissed an investigation on alleged antitrust
violations concerning the soda ash market resulting from joint sales carried out through an export
association . The Respondents are the American Natural Soda Ash Corp. (Ansac) association
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and member companies Tronox Alkali Wyoming, Tata Chemical Partners (Soda Ash), Ciner
Resources Corporation and Solvay Chemicals USA.
Ansac is a US association created in 1984 by soda ash producers in an
attempt to reduce export costs by coordinating sales, marketing and logistics, based on the
Webb-Pomerene Act (1918). In the US, the act provides antitrust exemptions for exporters’
associations registered with the Federal Trade Commission when they are organized exclusively
to support their international businesses.
The Tribunal noted that this type of conduct is permitted in the USA, but
highlighted these associations do not enjoy any antitrust immunity in Brazil. It was held that,
despite the similarities between the export cartel and a classic cartel, there was an important
difference in that the export cartel operated lawfully in its home country.
Because of this distinction, the expression “export association” is frequently
used instead of “export cartel”. It also noted that export associations sometimes provide efficiencies
of scale as they are able to reduce costs, which could
justify analyzing the conduct under the rule of reason. THE SUPERINTENDENCE
In this particular case, CADE’s CONCLUDED THAT DESPITE
Tribunal agreed with the opinions issued by CADE’s THE EXISTENCE OF MARKET
Superintendence, the Office of Federal Public Prosecutors POWER ON THE DOMESTIC
and CADE’s General Attorney, analyzing the conduct SODA ASH MARKET, THERE
using the rule of reason. WAS EVIDENCE THAT ANSAC’S
The Superintendence concluded that, ACTIVITIES DID NOT HAVE
although formally set up as a joint venture, Ansac could ANTICOMPETITIVE EFFECTS
be classified as an export association/cartel as it presents IN BRAZIL. THERE WAS NO
all of the usual characteristics of arrangements of such EVIDENCE THAT PRICES HAD
nature: (i) it was legally organized in its country of origin; INCREASED OR QUANTITIES
(ii) its goal is to put members on a better competitive HAD BEEN REDUCED AS A
footing; and (iii) there is evidence of potential efficiencies. RESULT OF THE CONCERTED
The Superintendence concluded that BEHAVIOR. FINALLY, THE
despite the existence of market power on the domestic TRIBUNAL STRESSED THAT
soda ash market, there was evidence that Ansac’s activities ORGANIZATIONS LIKE
did not have anticompetitive effects in Brazil. There was ANSAC ARE NOT EXEMPT
FROM ANALYSIS BY THE
COMPETITION AUTHORITY.

20 See Administrative Process
No. 08012.008881/2010-60.