Abra, Gol’s parent company, the Brazilian Institute for Research and Innovation (IBCI) and the Institute for Research and Studies of Society and Consumption (IPSConsumo) asked the Administrative Council for Economic Defense (Cade) to reconsider their requests for qualification as third parties interested in the operation involving Azul and American Airlines.
The request for the three to participate in the operation was denied by Cade’s general superintendent (SG), Alexandre Barreto, just over 10 days ago. If the SG rejects the request again, the three petitioners can still appeal to the court.
The operation between Azul and American Airlines consists of the acquisition of the American company’s shareholding in the Brazilian airline. It was formally notified by the airlines to the antitrust body in early April, around two months after the Cade plenary approved the increase in the minority stake held by United Airlines in Azul, which went from 2.02% to approximately 8%.
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First to appeal the SG’s decision, IBCI claimed that it meets the requirements of legitimacy, convenience and opportunity for procedural instruction and defense of the interests of the community. He further argued that some facts were only partially informed by the applicants in the operation.
“The most relevant contribution of the IBCI lies in the analytical content of its statements. Based on facts largely already available in the case file, the IBCI offers an original interpretation that the instruction carried out to date had not developed”, pointed out the institute.
In turn, Abra maintained that the reasons presented for denying its entry into the process are not in line with Cade’s precedents regarding the qualification of interested third parties. He also stated that he presented the damage theory to demonstrate that, even based on public data, documents and information, the narrative created by Azul and American that the merger does not raise competition concerns cannot be sustained.
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Abra argued that its qualification will enable Cade to provide more complete and robust instruction, guaranteeing decision-making in favor of free competition. According to her, the operation “is not covered by any justification or pro-competitive economic rationality, nor by efficiencies that can be passed on to Brazilian consumers”.
For IPSConsumo, the authorization requests demonstrated “a clear intention of contributing to a robust analysis of operations that, far from being simplistic, raise competition concerns of high technical complexity”. The entity stated that the information and safeguards presented by the parties were not sufficient.
Finally, the IPS recalled that it acted as a third party in the process that analyzed the Azul-United operation, judged earlier this year, as well as in the process that examined codeshare (route sharing) between Azul and Gol, last year.
Cade’s SG denied participation
Cade’s general superintendent accepted the technical note from the body, which understood that the petitioners did not present new factual elements that could contribute in a relevant way to the analysis – such as, for example, information that was unavailable or difficult to access for Cade.
According to the SG’s assessment, this is, to a large extent, information that is already known or can be readily accessed, if it proves to be relevant to the investigation of this case.
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The understanding was that none of the three petitioners met either the standards of documentary substantiation or the standards of relevance of the request for intervention.
