The Public Civil Action Act (Federal Law No. 7,347/1986) governs class actions in Brazil, including those involving anti-competitive matters.
The Brazilian Industrial Property Act (Federal Law No. 9,279/1996) reads that a competitor may seek redress of losses caused by another competitor for unfair competition acts.
1.3 Is the legal basis for competition law claims derived from international, national or regional law?
The Brazilian Constitution gives federal and state courts juris-diction to hear anticompetitive matters. State courts will hear most cases, while federal courts have jurisdiction only over cases involving harm to the federal government or a federal state-owned company.
1.4 Are there specialist courts in your jurisdiction to which competition law cases are assigned?
Following the National Council of the Federal Justice recom-mendation, federal courts in the Southeast region and the Federal District have started organising these specialised courts. Federal courts in the States of Rio de Janeiro and Espírito Santo have already launched specialist courts, as well as State Court of São Paulo. Further developments in this area are yet to be seen.
1.5 Who has standing to bring an action for breach of competition law and what are the available mechanisms for multiple claimants? For instance, is there a possibility of collective claims, class actions, actions by representative bodies or any other form of public interest litigation? If collective claims or class actions are permitted, are these permitted on an “opt-in” or “opt-out” basis?
Anyone directly or indirectly injured by anticompetitive conduct has the standing to sue. Generally, a plaintiff must show actual injury.
Multiple plaintiffs and defendants are possible in the same civil lawsuit. The judge may order the joinder of parties or claims even if the parties have filed separate complaints. Plaintiffs must have made similar claims, the case must deal with the same anticompetitive conduct, and the parties be subject to the same jurisdiction.
Plaintiffs can seek recovery of damages through class actions with multiple plaintiffs or defendants involved in a common question of fact. A plaintiff in class actions must identify the harmed parties and can add new ones as the suit develops. It
1 General
1.1 Please identify the scope of claims that may be brought in your jurisdiction for breach of competition law.
Civil lawsuits are available for all types of anticompetitive practices. The Brazilian Competition Act (Federal Law No. 12,529/2011) is the primary competition law in Brazil. It prohibits unreasonable restraint of trade that produces or can produce the effects of lessening competition, creating a monopoly, controlling a relevant market, or increasing profits. This Act lists 19 examples of punishable anticompetitive prac-tices, including price-fixing, tying, predatory pricing, refusal to deal, group boycotts, and sale discrimination. The Brazilian Competition Act authorises plaintiffs to seek damages, injunc-tive reliefs, or both. This Act contains a specific provision on the recovery of damages. Plaintiffs may invoke civil or consumer protection under federal law with the Competition Act. Defendants are subject to administrative and criminal penalties in addition to civil liabilities.
Also, Brazilian law authorises civil lawsuits for unfair compe-tition acts. The Brazilian Industrial Property Act (Federal Law No. 9,279/1996) lists 14 illegal practices, including gaining a competitive advantage by publishing false information about a competitor, and obtaining a competitor’s confidential infor-mation illegally. This Act requires that the defendant causes actual harm to the plaintiff and that they are competitors. The plaintiff in those specific cases does not need to show a negative actual or potential impact on competition.
1.2 What is the legal basis for bringing an action for breach of competition law?
Plaintiffs usually ground lawsuits under the Brazilian Competition Act (Federal Law No. 12,529/2011) combined with the Civil Code (Federal Law No. 10,406/2002), which estab-lishes that plaintiffs can recover damages for any illegal activity.
The Consumer Protection Code (Federal Law No. 8,078/1990) applies if the anticompetitive practice involves a consumer. Individuals who are final users of products or services and companies that are a final user of products or services and are in a weakened position with the vendor are considered consumers. The Code contains specific procedural and substantive rules that govern lawsuits involving consumers. For instance, it provides double damages awards and shifts the burden of proof to the vendor.
2.2 What interim remedies are available and under what conditions will a court grant them?
Courts have broad discretion to determine interim remedies. Usually, a judge’s injunctive order summons the party to cease the anticompetitive conduct. For instance, the judge orders the defendant to stop market allocation and start offering the product in specific markets.
The plaintiff must show that: (i) irreparable harm looms unless the judge grants the order; (ii) the remedy is needed to preserve the plaintiff’s rights; and (iii) the effects of such injunc-tion are reversible. The courts may issue an injunctive order before or after hearing the defendant. Usually, courts render it after hearing the adverse party. Courts are more likely to grant interim measures if the plaintiff convinces the judge that it is expected to be successful on the merits of the case and shows that the anticompetitive conduct is ongoing and causing harm to the plaintiff. Courts will likely deny preliminary injunctions if the injury is merely monetary damage, and the defendant is not dissipating its assets to avoid payment.
3 Final Remedies
3.1 Please identify the final remedies which may be available and describe in each case the tests which a court will apply in deciding whether to grant such a remedy.
Courts can order the cessation of illegal conduct and the payment of damages if the plaintiff succeeds in the lawsuit. The defendant may be sentenced to pay compensatory damages, including expectation damages and, in more specific cases, consequential damages. Expectation damages usually encom-pass the sum of the plaintiff’s financial losses. Judges can also award compensation for moral damage. The law does not have a strict rule on how to calculate moral damages. However, judges usually consider the gravity of the offence along with the plain-tiff and defendants’ financial status.
When the litigants’ commercial relationship qualifies as a consumer relationship under the Consumer Protection Code, the defendant may be sentenced to double damages (i.e., twice the amount unduly paid in excess) plus indexation and interest.
3.2 If damages are an available remedy, on what bases can a court determine the amount of the award? Are exemplary damages available? Are there any examples of damages being awarded by the courts in competition cases which are in the public domain? If so, please identify any notable examples and provide details of the amounts awarded.
The plaintiff must present a substantiated computation of damages. The award is calculated based on the overprice paid by the plaintiff summed up with other monetary and moral damages caused. In consumer cases, the court may apply double damages to the plaintiff’s losses. The calculation of damages may be discussed after the plaintiff wins the litigation on the merits, which will follow a specific procedure governed by the Civil Procedure Code.
The court may order the defendants to provide their financial records for calculation of overpricing if such information is neces-sary to calculate the plaintiff’s losses. However, the judge might deny access to it on confidentiality grounds. Nonetheless, because the damages usually take into consideration confidential financial information, the damages awarded are protected under seal.
also must be one of the plaintiffs that the Public Civil Action Act lists to have the standing to bring a class action. The list includes the Public Prosecutor’s Office, the Public Attorney’s Office, federal, state and local governments, state-owned companies or foundations, and specific associations. The Brazilian Antitrust Authority (“CADE”)’s Attorney’s Office plans to participate in future class actions actively, although it is not listed in the Public Civil Action Act.
The injured parties usually do not have the standing to file a class action. However, they can join the case as assistants to the plaintiff. Injured plaintiffs in a separate lawsuit regarding the same matter can ask for a stay in proceedings until the class action judge issues a final decision.
1.6 What jurisdictional factors will determine whether a court is entitled to take on a competition law claim?
The place where the plaintiff is domiciled and where the anti-competitive conduct took place determines the court’s jurisdic-tion. The courts will hear the case if the defendant is domiciled in Brazil, the act took place in Brazil, or the defendant must perform the relief in Brazil.
State or federal courts will hear the case if they have subject-matter jurisdiction. State courts have general subject-matter jurisdiction to hear civil antitrust claims. The Federal Constitution gives federal courts exclusive jurisdiction over cases in which the Federal Government, a federal agency, or a federal state-owned company is a plaintiff, defendant, or inter-venes on the matter (article 109, paragraph 1).
1.7 Does your jurisdiction have a reputation for attracting claimants or, on the contrary, defendant applications to seize jurisdiction, and if so, why?
Although possible for decades, damages lawsuits are still uncommon in Brazil. In the last decade, however, complaints have gained traction with some help from CADE. CADE is taking many actions to foster civil litigation, although its focus is to enforce the Competition Act in the administrative sphere by imposing administrative penalties. CADE is shaping its opin-ions to be better suited as evidence in damages suits. It has forwarded some of its decisions to potential plaintiffs, including possibly affected consumers and prosecutors, alerting them of the possibility of a civil lawsuit. It is also actively engaged in changing the current legislation, making it easier for civil litiga-tion of that nature.
1.8 Is the judicial process adversarial or inquisitorial?
The judicial process is adversarial, in which attorneys must represent the parties, and a federal or state judge hears the case.
Before trial, in class actions, the Public Prosecutor’s Office can initiate a mostly inquisitorial pre-trial class action proce-dure to gather evidence. After concluding this investigation, the prosecutor must litigate the case in an adversarial judicial process before the courts.
2 Interim Remedies
2.1 Are interim remedies available in competition law cases?
The parties may submit reports prepared by expert witnesses or hear them as witnesses, and judges may hire an expert to serve the court. Expert witnesses can use any extrinsic evidence for their opinion. The other litigant or the judge may order the expert witnesses to submit the evidence they relied upon to render the opinion.
4.5 What are the rules on disclosure? What, if any, documents can be obtained: (i) before proceedings have begun; (ii) during proceedings from the other party; and (iii) from third parties (including competition authorities)?
The Civil Procedure Code authorises any evidence, provided that the party legally and morally obtained it. Hearings, docu-ments, expert opinions, and copies of other public proceedings are examples of evidence usually admitted in private antitrust litigation.
Courts admit documents produced in CADE investiga-tions. The Superior Court of Justice (“STJ”) has authorised a party to access a full copy of the confidential leniency agree-ment executed with CADE. According to the STJ, CADE must provide a copy of the leniency agreement to the parties in civil antitrust litigation after CADE’s Tribunal (the decision-making body of the antitrust authority) issues its final decision.
4.6 Can witnesses be forced to appear? To what extent, if any, is cross-examination of witnesses possible?
Witnesses can be forced to appear by court order. Cross-examination of witnesses is possible.
4.7 Does an infringement decision by a national or international competition authority, or an authority from another country, have probative value as to liability and enable claimants to pursue follow-on claims for damages in the courts?
Brazilian courts typically consider foreign decisions, despite the non-binding nature of such alien documents.
4.8 How would courts deal with issues of commercial confidentiality that may arise in competition proceedings?
The STJ has ruled that the judge receiving a copy of a leni-ency agreement could redact its competition-sensitive excerpts. Otherwise, the document should be available to the parties in its entirety. However, if the procedure contains confidential infor-mation, the civil lawsuit should be kept sealed.
4.9 Is there provision for the national competition authority in your jurisdiction (and/or the European Commission, in EU Member States) to express its views or analysis in relation to the case? If so, how common is it for the competition authority (or European Commission) to do so?
The court must notify CADE of any civil litigation involving the Brazilian Competition Act. Represented by CADE’s Attorney General, CADE can participate in the case as an assistant to the plaintiff or the defendant.
3.3 Are fines imposed by competition authorities and/or any redress scheme already offered to those harmed by the infringement taken into account by the court when calculating the award?
Damages awarded by courts in civil claims do not prevent crim-inal courts from imposing fines in addition to other crim-inal penalties, and they do not prevent CADE from imposing administrative sanctions against the plaintiff. It is still not clear as of yet whether fines imposed by CADE will be taken into account by judges hearing damages claims.
4 Evidence
4.1 What is the standard of proof?
Civil law does not establish a specific standard of proof. The law requires the judge to issue a sound judgment based on the evidence the parties submitted. Nonetheless, judges usually decide based on the preponderance of evidence standard, which would be higher than the balance of probabilities and lower than beyond any reasonable doubt standards.
4.2 Who bears the evidential burden of proof?
The plaintiff initially bears the burden of proof. In addition to stating the matters of fact, the plaintiff must substantiate its claims and indicate how it will obtain additional evidence. Once the plaintiff has proven a fact, the burden of proof switches to the defendant, who should convince the judge otherwise by providing sufficient counterevidence.
A different burden of proof applies to consumer relations under the Consumer Protection Code. Plaintiffs may only state the facts that support their reasonable claim, while defendants carry the burden of proving that those asserted facts are incor-rect, false, or unrelated to the complaint.
4.3 Do evidential presumptions play an important role in damages claims, including any presumptions of loss in cartel cases that have been applied in your jurisdiction?
Only criminal convictions are binding on civil courts in terms of fault, fact, and existence of damage. On the one hand, the parties in civil litigation have almost no room to challenge the conclusions issued in criminal cases. While presumptions may apply to the existence of damage, the plaintiff must show in the civil litigation the actual loss caused by the defendant. On the other hand, criminal case dismissals are not conclusive for civil cases because a criminal procedure has a higher standard of proof than civil proceedings.
Decisions issued by other civil courts on the same matter and decisions issued by CADE in the administrative sphere are persuasive but not conclusive.
4.4 Are there limitations on the forms of evidence which may be put forward by either side? Is expert evidence accepted by the courts?
Courts accept any actual, documentary, and testimonial evidence if it was legally obtained and did not harm general moral stand-ards. The Civil Procedure Code does not limit the elements admissible into evidence in civil litigation. For instance, the law does not prohibit hearsay or character evidence.
these changes would have a marginal impact on the length of time that the procedure would usually take.
7 Settlement
7.1 Do parties require the permission of the court to discontinue breach of competition law claims (for example, if a settlement is reached)?
The parties must get the settlement approved by the judge so that the lawsuit can be formally shelved. In certain particular cases, the parties can settle without the consent of the judge. In those situations, the parties must require the court to close the lawsuit.
7.2 If collective claims, class actions and/or representative actions are permitted, is collective settlement/settlement by the representative body on behalf of the claimants also permitted, and if so on what basis?
Grounded on the Brazilian Constitution and federal law, the Public Prosecutor’s Office can agree on collective settlements in class actions. However, injured parties may decide not to join the settlement (opt out).
8 Costs
8.1 Can the claimant/defendant recover its legal costs from the unsuccessful party?
The unsuccessful party has to reimburse the prevailing party for the court costs, including filing fees, expert fees, and other expenses, and also has to pay the counterparty’s attorney fees. Under the Civil Procedure Code, court-defined attorneys’ fees range from 10% to 20% of the lawsuit’s value. Those fees have no connection to the contractual attorneys’ fees – i.e., the ones negotiated between the parties and their lawyers.
As an exception, the court may dismiss entities and individ-uals from paying court costs and fees with evidence that they lack financial resources.
8.2 Are lawyers permitted to act on a contingency fee basis?
Yes. In Brazil, it is relatively common for lawyers to work on a contingency fee basis.
8.3 Is third party funding of competition law claims permitted? If so, has this option been used in many cases to date?
Under Brazilian law, third parties are not expressly prohibited from funding litigation. Third-party funding is not typical but seems to be growing in Brazil.
9 Appeal
9.1 Can decisions of the court be appealed?
Yes. Parties can appeal against interlocutory and final decisions. The Civil Procedure Code provides for filing various appeals,
5 Justification/Defences
5.1 Is a defence of justification/public interest available?
Generally, there is no defence of public interest available. The law is enforced against any party that infringes the Brazilian Competition Act. However, for companies that are active in highly regulated markets, a common defence is that they comply with regulation allegedly conflicting with the Competition Act.
5.2 Is the “passing on defence” available and do indirect purchasers have legal standing to sue?
The passing on defence is available, and indirect purchasers may have legal standing on showing the damage caused and causa-tion. The São Paulo State Court of Appeals decided in at least three cases that the client did not have the standing to sue cartel participants that were punished by CADE because they were not the final consumers of the product. According to the Court, if not proven otherwise, the final users bear the entire costs of a cartel practice.
5.3 Are defendants able to join other cartel participants to the claim as co-defendants? If so, on what basis may they be joined?
Defendants may join their own directors and officers as well as companies of their own economic group as jointly liable for the anticompetitive practice. The court may order the joinder of other cartel participants as defendants if the judge believes that they also caused damage to the plaintiff. These new co-defendants are jointly and severally liable for the damage caused to the plaintiff.
6 Timing
6.1 Is there a limitation period for bringing a claim for breach of competition law, and if so how long is it and when does it start to run?
Plaintiffs have three years to file the damages lawsuits. As a general rule, the limitation period starts running when the event triggering the liability occurs. Some contend that the limita-tion period should begin to run only when the affected party is aware of the infringement. This issue is extremely contro-versial and is being disputed before the Brazilian courts. Bills at the Brazilian Congress are trying to establish the issuing of CADE’s final decision on the violation as the moment when the limitation period starts to run for the affected parties to file a damages lawsuit.
6.2 Broadly speaking, how long does a typical breach of competition law claim take to bring to trial and final judgment? Is it possible to expedite proceedings?
It can take more than 15 years for a final and conclusive judg-ment on a typical breach of Brazilian Competition Act claim to be issued. Expedited proceedings are not available, but stake-holders, such as CADE, are discussing bills that would accel-erate the proceedings.
Under the Civil Procedure Code, the parties to a dispute can agree on specific deadlines for responses and appeals. However,
11.2 What approach has been taken for the implementation of the EU Directive on Antitrust Damages Actions in your jurisdiction? How has the Directive been applied by the courts in your jurisdiction?
This is not applicable in Brazil.
11.3 Please identify, with reference to transitional provisions in national implementing legislation, whether the key aspects of the Directive (including limitation reforms) will apply in your jurisdiction only to infringement decisions post-dating the effective date of implementation; or, if some other arrangement applies, please describe it.
This is not applicable in Brazil.
11.4 Are there any other proposed reforms in your jurisdiction relating to competition litigation?
The House of Representatives is currently reviewing a bill (Bill No. 11,275/2018) that aims to foster private litigation in Brazil while protecting the Brazilian Leniency Programme. The Federal Senate has already approved this Bill. The House of Representatives has suggested no amendments to the Bill and should schedule it for voting. It contains the following signifi-cant changes to the Brazilian Competition Act:■ it makes it clear that double damages will be imposed on
violators charged with cartel behaviour;■ it increases the Lenients and Settlement Agreement
Signatories protection by assuring they will not pay double damages to the harmed parties;
■ it establishes that the Lenients and Settlement Agreement Signatories should not be jointly and severally liable with the other defendants;
■ it sets forth that the defendant has the burden of proof if it decides to use a pass-on defence;
■ it extends the statute of limitations period for five years after CADE publishes its decision;
■ it introduces an additional obligation for a company or individual willing to enter into a Settlement Agreement with CADE: the Signatory must submit to arbitration all disputes concerning damages claims if the plaintiffs require it; and
■ it aims at expediting the judicial proceedings by giving full faith and credit to CADE’s decisions.
not only to the trial judge and the court of appeals, but also to the higher courts. The STJ reviews federal law issues, while the Federal Supreme Court (“STF”) examines violations of the Federal Constitution. Only the court of appeals can review de novo the facts and evidence made available to the first instance court judge. The STJ and STFs’ reviews are limited to legal issues; i.e., they are not allowed to review facts or evidence discussed in the lower courts.
10 Leniency
10.1 Is leniency offered by a national competition authority in your jurisdiction? If so, is (a) a successful, and (b) an unsuccessful applicant for leniency given immunity from civil claims?
CADE has offered leniency agreements since 2000. CADE’s programme is considered very successful, and over 100 leniency agreements have already been executed. Neither successful nor unsuccessful applicants are given immunity from civil claims.
10.2 Is (a) a successful, and (b) an unsuccessful applicant for leniency permitted to withhold evidence disclosed by it when obtaining leniency in any subsequent court proceedings?
The STJ has ordered CADE to share a confidential leniency agreement with the courts in civil litigation. Although there is no decision by superior courts on the obligation to share with courts an unsuccessful leniency agreement, the Brazilian Competition Act establishes that CADE will keep the proposal of a leniency agreement by unsuccessful applicants confidential.
11 Anticipated Reforms
11.1 For EU Member States, highlight the anticipated impact of the EU Directive on Antitrust Damages Actions at the national level and any amendments to national procedure that are likely to be required.
This is not applicable in Brazil.
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Competition Litigation 2021
Pinheiro Neto Advogados
Leonardo Rocha e Silva has been a partner at Pinheiro Neto Advogados since 2006. He has more than 25 years’ experience of guiding his clients through merger control issues and investigations, including cartels, vertical restraints and abuse of dominance. His practice areas include antitrust, civil and commercial litigation. Leonardo previously worked in Switzerland and in the UK, and holds an LL.M. in International Economic Law from the University of Warwick.
Pinheiro Neto Advogados SAFS, Quadra 2, Bloco BEdifício Via Office – 3° andarBrasília-DF, 70070-600 Brazil
Alessandro P. Giacaglia has been an associate in the Litigation Group of Pinheiro Neto Advogados’ São Paulo office since 2012. He has experience in antitrust and anticorruption cases, both in the administrative and judicial spheres in Brazil and the United States. Alessandro has an LL.M. degree from the University of Chicago Law School, a Postgraduate degree in fraud risk management and compliance, an LL.M. degree in corporate law, and a Bachelor’s degree in Law.
Pinheiro Neto Advogados’ Competition Law Practice Group is part of the firm’s highly regarded Litigation Department. The experienced team has in-depth knowledge of the judicial proceedings underway in the various Brazilian courts. It has particular expertise in appellate litigation before the country’s superior courts in Brasília. Pinheiro Neto has equity part-ners and complete teams of associates with expertise in competition law not only in São Paulo but also in Brasília, where the antitrust authority is headquartered. The team has recently been very active in helping clients in the review and implementation of internal investigations and compliance training programmes. The team members have published various articles in the field and have been recognised constantly by Who’s Who, Chambers and Partners, Best Lawyers, LACCA Approved, and other institutions as leading practitioners in Brazil.
