Remedying behavioral remedies: pre-established commitments by merger applicants and Cade's role

Abstract

Context: in exercising its preventive control (art. 9, I c/c art. 88 et seq., of Law No. 12.529/2011), the Administrative Council for Economic Defense (Cade) is responsible for deciding on the approval, with or without corrective measures, or the rejection of merger transactions (art. 90, of Law No. 12.529/2011). Given the relative predictability of antitrust analysis, the notifying parties may, when submitting the merger, propose "prior commitments," anticipating potential antitrust authority requirements.

Objective: this article aims to characterize the prior commitments undertaken by parties in merger transactions, based on recent Cade rulings, highlighting their similarity to behavioral remedies. It also examines the business risks associated with these commitments and discusses the challenges faced by Cade in monitoring and controlling these measures, emphasizing the importance of transparency and specificity in the disclosure and evaluation of such commitments.

Method: jurisprudential and bibliographical review.

Conclusions: prior commitments serve as mechanisms to mitigate the negative competitive impacts of merger transactions, facilitating Cade's analysis and approval process. When drafted clearly and specifically, these commitments reduce costs and promote a more efficient review, while also providing greater legal certainty to the parties involved. Failure to comply with these commitments may result in serious consequences, such as the reassessment of the transaction or the characterization of abusive practices. Transparency in the formulation and disclosure of commitments is essential for Cade's effective monitoring and verification.