The Effects of the Use of a Hybrid Approach to Competition Law in the Regulation of Market Power: the Case of Brazil

Abstract

The Brazilian competition law and policy are inspired by the EU and US competition law models and incorporate different aspects of these systems, such as the rule of reason and the concept of abuse of dominance. Based on the analysis of competition cases and in-depth interviews with members of the Brazilian competition authority, the research examines how the authority has dealt with the differences between the EU and the US models when applying its competition law. It identifies the ways in which the authority seeks to adjust its competition system to the particularities of a large developing country, in terms of legislation, economy, culture and institutional framework. The research also analyses the way in which the current competition legislation was intended to give flexibility to the competition authority but at the same time has produced the potential for inconsistencies in its enforcement. The study reveals differences between the formal provisions of the competition law and the manner in which it is applied. In addition, the research argues that the application of diverging concepts drawn from the EU and US models have resulted at times in incoherence in relation to issues such as the definition of the relevant market, the concepts of dominance and abuse, as well as the dissimilar treatment of specific offences. With regards to the latter, the findings suggest that there is a need to address institutional problems, such as the shortage of administrative personnel, political interference, inadequate training and a lack of an ‘institutional memory’. Possible solutions discussed include the publication of guidelines and II authoritative decisions to restate the law, improvements in training and funding, as well as proposals for administrative and legal reform.