Paulo Leonardo Casagrande, Caio Mario da Silva Pereira Neto, Nov 30, 2011
On November 30, 2011, Law n. 12.529—the New Brazilian Competition Law—was formally enacted by President Dilma Roussef, after more than 7 years of discussions within the Brazilian National Congress. Such Law will become effective on May 29, 2012, when it will supersede Law 8.884, enacted in 1994.
The New Law represents a significant change in the institutional, procedural, and material rules structuring competition policy in Brazil, and it is seen as a major improvement. According to the 2010 peer review by the OECD, the New Law is a “comprehensive legislation that would overhaul the Brazilian Competition Policy System and remedy many of the problems that have plagued it for so long.”
Probably the most difficult problem that the New Law aims to tackle concerns the merger review regime. Law 8884, of 1994, established a non-suspensory regime in Brazil: i.e. parties are allowed to close the transaction before the decision of the competition authority. Besides being odd compared to most jurisdictions, this brought significant difficulties to the authorities and many uncertainties to merging parties, especially in complex transactions.
The New Law sets up a pre-merger review system, together with a significant change in the institutional design of the authorities in charge of such review. This article aims at presenting the main aspects and issues concerning the merger review process under the New Brazilian Competition Law . It will do so by: (i) presenting the new institutional structure of the BCPS; (ii) explaining which transactions will have to be reported, according to the new thresholds; (iii) describing the main phases of the review process; (iv) pointing to some changes in the substantive assessment test; and, finally (v) evaluating the possible effects of such important changes.