Ex Ante merger control of cross-border M&As in Brazil
case studies of CADE’s enforcement of gun jumping
DOI:
https://doi.org/10.11606/issn.0102-8049.i182-183p%25pPalavras-chave:
Administrative Council of Economic Defense, Merger control, Gun jumping, Cross-border M&As, Standstill obligation, Suspensory effects, Competition PolicyResumo
Study and Objective: This paper aims to discuss the effectiveness of the Brazilian ex ante merger control system based on a case study of gun jumping investigations recently analyzed by the Administrative Council of Economic Defense (CADE), which resulted in the payment of the largest gun jumping fines in CADE’s story.
Method: Firstly, we present the debate on the impacts of antitrust regulation on cross-border M&A transactions, which involves the costs of notifying in several jurisdictions that adopt ex ante merger control but brings relevant benefits. After, we introduce some of the main characteristics of the Brazilian ex ante merger control regime and analyze CADE’s decisions in the IBM/Red Hat and Veolia/Engie/Suez cases.
Results: In IBM/Red Hat and Veolia/Engie/Suez cases, the threat of conviction for gun jumping did not effectively protect the Brazilian ex ante notification regime. The transactions, which were cleared by other national antitrust authorities (pending only Cade’s approval), proceeded without major obstacles.
Conclusions: We argue that the Brazilian enforcement of the pre-merger control has limited effectiveness, for the following reasons: (i) the punishments for the gun jumping infringement seem to be too lenient; and (ii) the role of CADE as a “peripheral” antitrust authority. In this sense, the gun jumping punishment brings limited costs to the parties compared to their possible private gains in speeding or not notifying the transaction.
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