Brazil’s antitrust authority has recommended sanctions against several major automakers in a case involving alleged exchanges of sensitive research and development information in the passenger vehicle market.
The General Superintendence of Brazil’s Administrative Council for Economic Defense, known as Administrative Council for Economic Defense (CADE), said it has recommended the partial conviction of automakers and individuals following an investigation into alleged coordination in the international market for light motor vehicles.
The case is notable as the first in Brazil in which competing companies have been investigated for allegedly restricting competition for innovation rather than more traditional forms of price or market coordination.
According to CADE, the investigation uncovered evidence that certain manufacturers exchanged competitively sensitive information relating to research and development projects for embedded components used in specific vehicle models. The authority said such conduct may have reduced uncertainty between competitors, weakened incentives to innovate, and ultimately harmed consumers.
The products involved were light passenger vehicles, many positioned in the premium segment, that were either produced in Brazil or imported into the country. Although the relevant contacts took place outside Brazil, CADE said the technologies discussed were incorporated into vehicles sold or manufactured in the Brazilian market, giving the authority jurisdiction over the conduct.
Following its investigation, CADE’s General Superintendence recommended that Audi, BMW, Porsche and Volkswagen, along with associated individuals, be found liable for infringing Brazil’s competition law. It also recommended fines and other penalties under Law No. 12.529/2011.
The authority recommended dismissal of the proceedings against Mercedes-Benz and the individuals linked to that company.
The recommendation does not constitute a final ruling. The case will now proceed to CADE’s Administrative Tribunal, which will determine whether to uphold the findings and impose sanctions.
The matter could become a important precedent for Brazilian antitrust enforcement by testing how competition law applies to information exchanges affecting innovation, particularly in industries where technological development is a central dimension of competition.
