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In 2015, the Brazilian House of Representatives’ Commission for Consumer Protection initiated a formal administrative inquiry with the Brazilian Administrative Council for Economic Defense (CADE), against the company Uber, alleging that the company’s operations amount to unfair competition. However, in a recent turn of events, in October of this year, CADE dismissed the administrative inquiry.

The House of Representatives initially asserted that the company, while intermediating personal transportation services, should technically be considered as offering an “urban transportation activity for individual passenger”. An additional assertion was made that this service should be regulated by the municipalities. In consideration of the actual type of services offered by Uber, according to the House of Representatives, the company’s operations amount to unfair competition against those who currently offered this service, especially taxis.

In response, Uber declared that it is merely a technological solution that only acts as an intermediary between a person and the transportation provider, rather than an individual transportation service. Even if it was considered as such, its activity could not be considered as unfair competition, since there would be regulatory imbalance between Uber and taxis.

In his opinion for the dismissal, CADE’s Reporting Commissioner stated that Uber and other Transportation Network Companies (TNCs) should be considered as legitimate market agents in the light of antitrust law, until there is a clear position of the Legislative, Executive and Judiciary branches of the state. Regarding unfair competition, the Rapporteur stated that the allegations should not be appreciated by CADE, since the public body has no jurisdiction to verify supposed acts of unfair competition, but only supposed violations to the economic order. This does not mean, however, that CADE could not conduct an investigation in the future in case of new indications of violation to the economic order.

The situation of Uber and other app-based companies serving the same purpose is also being debated by the federal legislative branch. The Senate debated and ultimately approved, on October 31, 2017, a variety of amendments to a bill proposed by the House of Representatives to regulate the matter, including, for example, granting authority to the municipalities to supervise the companies, but not implement their own regulations. The amendments now will be deliberated in the House of Representatives, and the staff of the Brazilian president signaled that the executive branch is closely following the voting.

For more information on antitrust law, competition law and government relations, in addition to matters related to intellectual property, please do not hesitate to contact us.

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