Following a six year investigation, the Administrative Council for Economic Defense (CADE) has fined different companies and individuals for a total of EUR 126 million for rigging bids for subway construction. The largest fines were imposed on CAF Brasil (nearly EUR 40 million) and Alstom (EUR 30 million). CADE found that Alstom led the rigging and as a result, has barred the companies from participating in public tenders for five years. Siemens, which blew the whistle, entered a leniency agreement with CADE, escaping fines.
Fines imposed by CADE for cartel activity have steadily risen in recent years. In addition to the subway cartel, so far in 2019, fines have been imposed across a wide range of sectors, including auto parts, fuel retail, LCD and electrical components. The subway cartel decision in particular, shows that bid-rigging remains high on the priority list for CADE.
This is a clear warning to firms with operations in Brazil showing that consequences of antitrust breaches are serious. Not only does CADE have the appetite to impose large fines, but parties found to have a key role in any cartel conduct may face additional sanctions which could affect their operations in the country.