Brazilian Administrative Council for Economic Defense: an Approach from Sociology and History

• Autore: Marco Antonio Loschiavo Leme De Barros
• Carica: PhD Candidate at the University of São Paulo Law School
• Pagine: 114-148

ARTICLES & ESSAYS

https://doi.org/10.6092/issn.2531-6133/7361

UNIVERSITY OF BOLOGNA LAW REVIEW

ISSN 2531-6133

[VOL.2:2 2017]

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Brazilian Administrative Council for Economic Defense: An Approach

from Sociology and History

MARCO ANTONIO LOSCHIAVO LEME DE BARROS †

TABLE OF CONTENTS: 1. Introduction; 2. Sociological and Historical Framework to Analyze

Legal and Economic Institutions; 2.1. The Pendulum Between Market and Government;

2.2. The Institutional History and Sociology Standpoint of View; 3. CADE’s Institutional

History; 3.1 . The Beginning of the Economic Competition Protection; 3.2. The Defense

of Popular Economy; 3.3. The Consolidation of the SBDC; 3.4. CADE as an

Administrative Court; 3.5. The New CADE; 4. Final Remarks.

ABSTRACT: This paper is a sociological and historical analysis of the Brazilian

Administrative Council for Economic Defense - C.A.D.E. The main objective is to

indicate that C.A.D.E. has become a reference for the development of the Brazilian

System of Competition Defense due to institutional factors. I argue that a fundamental

process of strengthening C.A.D.E.’s power was the institutional learning pr ocess

incorporated at the structural level, which allowed the agency the ability to review its

positions and constantly rebuild its structures and functions during different moments

in Brazilian antitrust history. Besides the institutional learning, C.A.D.E. was also

subject to different institutional influences over the past decades. A decisive moment

was the 1990s when a national privatization program was carried out and the

competitive protection system was articulated with regulated sectors and policies in

Brazil. An important framework to understand these transformations are the systemic

sociology of organizations and legal developmentalist literature. Both approaches –

with different backgrounds – help to clarify that many institutions are derivative from

previous ones, and that they are also embedded in certain operations related with

society. In C.A.D.E.’s case, Brazil’s judiciary and executive branch played an important

role in shaping the agency divisions and functions. The paper underscores four

different moments of the agency: the Malaia law C.A.D.E.; the 1962 C.A.D.E. – a

collegiate agency of the ministry of justice; the 1994 C.A.D.E. – an autonomous federal

agency – and the new C.A.D.E. per the Antitrust Act. Finally, C.A.D.E.’s case confirms

that the existence of previous institutions has become an indispensable assumption for

their development in light of a continuous institutional learning process.

KEYWORDS: Brazilian Administrative Council for Economic Defense/C.A.D.E.; Development;

Institucional Learning; Institutional Influence; History; Competition.

University of Bologna Law Review

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https://doi.org/10.6092/issn.2531-6133/7361

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1. INTRODUCTION

The Brazilian Administrative Council for Economic Defense (Conselho

Administrativo de Defesa Econômica - hereinafter C.A.D.E.) is an

“administrative court” established in 1962 as an agency of the Ministry of

Justice and transformed in 1994 into an autonomous federal agency. Its new

attributions as an adjudicatory court were established by the enactment of Act

No. 12.529/11,

1

also referred to as Brazil’s new Antitrust Act. Among its

functions, C.A.D.E. is the agency responsible for administrative trials of

infringements against economic order and merger review, by means of the so-

called acts of concentration.

Despite considering all its preventive and repressive functions, the most

significant role played by C.A.D.E. is the implementation of a policy and a

structure to defend economic competition in Brazil. In this sense, Luiz Carlos

Delorme Prado, former C.A.D.E.’s Commissioner confirms that “the

consolidation of the Brazilian system for the defense of competition, which

culminated in the enactment of Act No. 12.529/11, must be seen as the result of

a historical process going back to the 1930s.”

2

The purpose of this text, based on a historical analysis, is to indicate

that the consolidation of the system for defense of competition did not take

place as a process of simple legal transplant and endowment of factors from

foreign experiences. C.A.D.E.’s history underscore a trajectory of successes and

failures of models and interests in a complex relationship between market, law

and government economic program in Brazil.

Beyond the argument that “institutions matter,” the theoretical

framework for this analysis is inspired by the systemic sociology of

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† PhD Candidate at the University of São Paulo Law School. Visiting researcher at University of

California, Los Angeles School of Law. A first draft of this paper was presented at the 36th Annual

Meeting of the Law & Society Association. I am thankful for the comments from the professors

and participants in the session ‘Brazil: Development and Regulation’ and the assistance of Kevin

Massoudi. This paper was granted by the São Paulo Research Foundation.

1

Decreto No. 12.529, de 3 de Novembro de 2011, DIARIO OFICIAL DA UNIAO [D.O.U.] de 1.12.2011 (Braz.).

2

LAERCIO FARINA ET AL., A NOVA LEI DO CADE 99 (2012).

University of Bologna Law Review

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https://doi.org/10.6092/issn.2531-6133/7361

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organizations

3

and works of legal developmentalist scholars

4

that affirms that

institutions are “embedded” and, thus, their functions depend on the previous

existence and relations with other institutions (institutional influence) and

also on internal structures that permit institutions to review and amplify their

actions (institutional learning).

From a systemic point of view, it is important to understand that

institutions are “embedded” because they can be observed as functionally

differentiated social systems. Institutions are differentiated from their

environment or, like pointed out by the main social system theorist Niklas

Luhmann, institutions acknowledge as their own only communications

between members, and only when they communicate as members.

5

However, paradoxically, all institutions operate simultaneously within a

given environment, thus this observation is also about a dynamic process of

constant reconstruction of the institution operations (structures and

programs) in relation with their environment (other systems). Institutions

stimulate their growth reciprocally, by arranging businesses for mutual

relations or by establishing common facilities that must be supported by both

parties.

In this sense, it is not possible to deny the histories of institutions o r,

as theoretical institutionalists argue, the importance to understand their

continuities. Institutions are designed to succeed and to be preservative, but

given uncertainty about future, usually manipulation and failures happen and

it is not always possible to overturn constraints.

3

By systemic organization sociology we mean any kind of development of Luhmann’s sociological

theory of organizations. An important example is the work of Dirk Baecker. For a full

comprehension of systemic organization sociology see the special issue on Niklas Luhmann and

Organization Studies on the Journal Organization: David Seidl & Ka i Helge Becker, Organizations as

Distinction Generating and Processing Systems: Niklas Luhmann’s Contribution to Organization Studies, 13

ORGANIZATION J. 9 (2006) and STEFAN KÜHL, ORGANIZATIONS: A SYSTEM APPROACH (2013). For a general

account about legal institutions from a sociological perspective in Brazil see CELSO CAMPILONGO,

POLÍTICA, SISTEMA JURÍDICO E DE CISÃO JUDICIAL ([Politics, Juridical System and Judicial Decision] (2nd ed.,

2011).

4

Legal devolpmentalists scholars is a general term that refer to legal sociologists that considerer

in their analysis an embedded approach towards law and society. For this paper, we classify the

works of Alice Amsden, Peter Evans, Katharina Pistor, Curtis Milhaupt and Charles Sabel as legal

developmentalists.

5

In this perspective, a n institution functions consists of recursively operations of decisions –

understood as communication of choice attribution between alternatives and nothing else -, that

they generate only own their sequent operations. See NIKLAS LUHMANN, ORGANIZACIÓN Y DECISIÓN,

AUTOPOIESIS, ACCIÓN Y ENTENDIMIENTO COMUNICATIVO (2005).