Brazilian Antitrust Authority Drops Two Cartel Investigations Due to Insufficient Evidence

The Brazilian Antitrust Authority (CADE) has dismissed two administrative proceedings investigating cartel activity since early 2024. The cases concerned the water meter market and a group of construction companies participating in a tender. Both were dismissed due to insufficient evidence against some of the defendants.

The judgments underline the importance of carefully analysing circumstantial and one-sided evidence in cartel investigations, even in cases arising from leniency or settlement agreements (TCCs). Key points of the judgments include:

1. Leniency Agreements and TCC: They do not automatically lead to the conviction of other parties under investigation. Corroboration and sufficient evidence are required to eliminate reasonable doubt as to the alleged involvement of the accused.
2. One-sided evidence: The Court confirmed that a set of evidence consisting solely of one-sided evidence, involving only one participant in the alleged collusion, is insufficient to support a conviction.
3. Indirect evidence: Evidence that indicates collusion but does not unequivocally prove it is considered weak, especially where such evidence is limited or ambiguous.
4. Secret documents: Unilaterally prepared documents or tables of unknown authorship are not sufficient as evidence of impropriety between multiple parties.
5. Alternative narratives: Proving a legitimate business relationship between the defendants could provide an alternative narrative to collusion, depending on the details of the case and the evidence.

These judgments underscore the rigorous evidentiary standards that CADE applies in cartel investigations, which are reflected in the new composition of the CADE Tribunal.

Source: Mattos Fiho