Federative Republic of Brazil, Before the Administrative Council for Economic Defense (“CADE”), Draft Guidelines Concerning Antitrust Remedies, Comment of the Global Antitrust Institute, Antonin Scalia Law School, George Mason University
7 Pages Posted: 27 Jun 2018
Date Written: June 22, 2018
This comment provides recommendations to the Brazilian Administrative Council for Economic Defense (CADE) on Draft Guidelines Concerning Antitrust Remedies, which describe CADE's policies and practices for ordering relief in cases involving structural transactions. The comment commends CADE for publishing the guidelines and for adopting best practices based extensively on accepted international standards. The comment describes why economic analysis suggests flexibility in regard to relief policies, given the wide range of factual possibilities, so that competition is preserved or restored with minimum compliance, administrative, and enforcement costs, and with minimum loss of efficiencies. The comment then identifies several areas where the guidelines could benefit from improved flexibility. These include: (a) a preference for structural remedies, even though behavioral remedies might be preferable in vertical cases; (b) a presumption in favor of an upfront buyer requirement, although such a requirement is usually unnecessary where an effective divestiture package is well defined and qualified buyers are identifiable; (c) a critical stance on remedies requiring monitoring, even though firewalls and other conduct remedies are often successful where circumstances favor them; and (d) a strong presumption against mix-and-match divestiture packages, although such divestiture may be the preferable option in some cases involving multiproduct firms. The comment concludes by encouraging ex-post empirical analysis of merger remedies.
Keywords: guidelines, structural transaction, merger, acquisition, concentration, economics, economic analysis, flexibility, remedy, structural remedy, behavioral remedy, upfront buyer requirement, monitoring, mix-and-match, divestiture, multiproduct firm, empirical analysis
JEL Classification: K21, K23, L41, L42
Suggested Citation: Suggested Citation