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Largest Brazilian sanitation company to sue industrial gases cartel

9 noviembre, 2010

On the 9th September, I posted about the US$ 1.8 billion fine imposed on five industrial gases companies and six of their executives for having formed a cartel in Brazil. As expected, the decision is already having side-effects on the defendants.

SABESP, the state-owned sanitation company operating in the State of São Paulo, disclosed that its legal department is seriously considering to sue the companies involved in the industrial gas cartel – it is no coincidence that SABESP’s current President, Mr. Gésner de Oliveira, was the Chairman of the Administrative Council of Economic Defense (CADE) from 1996 to 2000.

If SABESP brings the action for breach of the antitrust rules against the cartel members, it will be an important precedent for others who have suffered damages caused by cartels. The caseload about private antitrust litigation in Brazilian courts almost does not exist, although there are news regarding some claims – clearly, consumers are still afraid of litigating against cartel members in spite of the active marketing made by the antitrust authorities. The long duration and the fear of retaliation are indicated as the main reasons by some lawyers.

SABESP purchases approximately R$ 1.2 million(approximately US$ 707,000.00 at today’s rate) in gases per year, namely carbon dioxide for treating tap water and oxygen for treating sewage. As CADE concluded the cartel lasted six years at least, SABESP may have suffered damages of R$ 7.2 million (approximately US$ 4,242,000.00 at today’s rate) in transactions with the cartelists.

CADE’s decision determined that all the cartel’s victims, Sabesp included, should be notified about the possibility of pursuing reparation for its losses through lawsuits. Although the value of the damages claimed by SABESP is not substantial, some lawyers believe its initiative may raise the interest of other cartel’s victims.

The cartel’s members have insisted there was no antitrust violation and informed they would appeal to higher courts, pursuing the reduction and cancellation of the fine imposed by CADE.

Source: http://www.valoronline.com.br/online/cade/4358/326997/sabesp-vai-processar-fornecedoras-de-gases

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