CADE discusses new role for associative contracts
The Administrative Council for Economic Defense (CADE) released for public consultation a draft resolution which defines the concept of associative contracts and provides the cases of a notification to the antitrust authority according to item IV, article 90 of the Federal Law 12.529/2011 (“Antitrust Law”).
The associative contracts are provided in the Antitrust Law as one of the cases of economic concentration, but this concept was surrounded by doubts and uncertainties. After discussion, CADE approved in 2014 the Resolution No. 10 and defined the associative contracts as contracts lasting more than 2 (two) years with horizontal or vertical cooperation, or risk sharing causing interdependent relationship between the parties.
However, aiming to clarify the definition of associative contracts, CADE presented a new proposal defining such contracts as any contracts establishing common enterprise for exploration of economic activity, respecting the objective criteria laid down in article 88 of the Antitrust Law. The draft keeps the definition of contracting parties and economic group provided in article 4 of Resolution CADE No. 02/2012 and sets forth concepts of enterprise and economic activity.
Under the terms of the proposed resolution, common enterprise is considered as a mutual cooperation between the contracting parties by means of a contract providing risk sharing and corresponding results lasting more than 2 (two) years. In addition, economic activity is defined as the acquisition or the supply of goods or services on the market, even deprived of any lucrative purpose. In this case, it is sufficient that the activity may be, at least in theory, performed by a for-profit private organization.
The draft also intends to change a standard that refers to vertical cooperation or risk sharing which entails interdependent relationship between the parties indicating as reference for analysis the sum of the market share equal or superior than 20% (twenty percent). The current rule laid down in Resolution No. 10/2014 establishes as reference 30% (thirty percent) or more of market share.
With the new provisions and criteria listed in article 88 of the Antitrust Law for notifications of economic concentration, CADE is looking for a clear and objective concept about the associative contracts. The public consultation is open for contributions and suggestions until May 31, 2016, and the draft resolution is available in this link .
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