With a tradition of strong repression to monopolies, cartels and abusive mergers, the Brazilian Antirust Agency (CADE) plays an import role in the Brazilian economy. A time of crisis demands swift regulatory responses able to deter and discourage antitrust violations. The reasonableness and effectiveness of the antitrust response can reveal how well the institutions are prepared to navigate these new challenges.
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In the United States, for instance, the administration evoked the Defense Production Act (1950). This provision, by seeking to stimulate the production of essential supplies to combat the COVID-19 outbreak, creates antitrust exemptions for companies that voluntarily adopt the government plan and provide autonomy to markets involved in fighting the pandemic. The most that the Federal Trade Commission and the Food and Drug Administration have done was to notify several companies that claimed to have developed medications to treat COVID-19. This response contrasts with what is happening in Brazil. Here, CADE is not letting fraudulent suppliers off the hook.
CADE’s view is that governmental reaction must safeguard consumers and guarantee the exclusion of fraudulent companies. The action plan was designed to promote an even more competitive environment, with the goal of fostering development, production and access to better healthcare products and solutions for consumers. CADE stepped forward on March 20 (shortly after the Governments of the major Brazilian States began taking restrictive measures to fight the spread of the coronavirus) and started the inspection of medical device manufacturers, retailers and pharmaceutical industries that were under suspicion of practicing artificial prices. The daily fine for not complying with the agency’s initial request for information regarding sales of essential supplies to fight the outbreak is approximately one thousand American Dollars and, if the information provided is intentionally inaccurate or false, the amount can reach one million American Dollars. The market has shown a very comprehensive and collaborative response to the agency’s agenda and is responding well and efficiently to the authority’s requests.
The current goal of the Brazilian Antitrust Authority lies on a response betting on the long run. CADE is leaving other public agencies and governmental organs to promote a prompt response to specific issues that are strictly related to their institutional capacities while it focuses on closely investigating and repressing anticompetitive behavior arising from the current coronavirus situation.