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2 February 24, 2011 Presented By: Olivier Antoine (Crowell & Moring LLP, New York) Alfredo O Farrell (Marval, O Farrell & Mairal, Buenos Aires, Argentina) Miguel del Pino (Marval, O Farrell & Mairal, Buenos Aires, Argentina) Ricardo Inglez de Souza (BKBG, Sao Paulo, Brazil) Amilcar Peredo (Basham, Ringe & Correa, Mexico City, Mexico)

3 Introduction 1. US impact of recent antitrust enforcement in Latin America. 2. Increase in cartel enforcement record setting fines (Brazil), new leniency regime? (Argentina), potential criminalization (Mexico) 3. More merger control scrutiny 4. Private enforcement? 5. Antitrust compliance in Latin America 6. Q&A

4 Cartel Enforcement in Latin America

5 Cartel enforcement in Brazil New investigative tools since 2000 First leniency agreement signed in 2003 International cooperation among authorities Huge exposure of competition law enforcement in Brazil Development of competition culture in Brazil Institutional autonomy and stability RECORD SETTING FINES

6 Cartel enforcement in Brazil FINES IMPOSED BY CADE IN SOME CARTEL CASES YEAR CASE % of Gross Revenue 2010 Industrial Gases 25%(50%) 2008 Sand 22,5% 2007 Vigilants 20% 2005 Crushed Stones 20% 2005 Steel Bars 7% 2004 Air Transport 1% 2002 Gas Station 5%

7 Cartel enforcement in Brazil Air Products Brasil Ltda.: R$ ,38 $112,001, Air Liquide Brasil Ltda. R$ ,66 $123,476, Linde Gases Ltda. R$ ,29 $177,744, White Martins Gases R$ ,50 $1,099, Ind. Brasileira de Gases R$ ,21 $4,192, José A. B. de Campos R$ ,65 $2,198, There were other defendants.

8 Cartel enforcement in Mexico 2006 AMENDMENTS TO THE COMPETITION LAW Aggressive cartel prosecution. Substantial increase in cartel investigations Implementation of the leniency regime: Recent investigations of the pharmaceutical, electronics, and cement industries

9 Cartel enforcement in Mexico 2010 AMENDMENTS PROPOSED BY THE PRESIDENT Fines substantially increased to up to 10% of assets or sales Dawn raids without prior notice Criminal penalties for individuals engaging in collusive behavior

10 Cartel enforcement in Argentina Cement market (2005) Market allocation; fixing prices; sharing competitive sensitive information Fine US$ 97,400,000 Shell / Total Gas - Case-law by the Federal Court (2008): Reversed a cartel sanction imposed by the CNDC Established that CNDC must perform a deep and detailed analysis of the evidence produced Pay TV market (2010) Market allocation among competitors in the City of Santa Fe Total fine imposed US$ 1,250,000

11 Cartel enforcement in Argentina LENIENCY Antitrust Law does not set out a leniency policy No major cartel cases have been uncovered since 2005 CNDC s main focus relies on merger control Leniency could provide CNDC with insider information that could ease the prosecution of cartel cases

12 Cartel enforcement in Argentina LENIENCY Draft rules finalized on December 2010 (must be sent to Congress for final approval) Main features of the bill: Run to the door system: first to apply receives full immunity, while later applicants can receive a reduction in their fines of 50%, 30% and 20% Leniency plus: full immunity if other conduct is reported No joint enforcement by two parties. Exception for a company that reports jointly with its directors and officers

13 Merger Control

14 Merger Control in Brazil Background information: mandatory filing and closing requirements More guidance with respect to mandatory filing rules CADE has been less lenient on high market concentration transactions Change of control is allowed before final decision, unless CADE order to freeze the transaction until final decision Bill will impose pre-merger review and increase legal thresholds for mandatory submissions

15 Merger Control in Brazil International acquisition of Saint Gobain s fiber glass business by Owens Corning Fiber Glass industry Market definition: geographical dimension of the market was defined as Brazil, and not worldwide High market concentration in Brazil (near to 100% in some markets) CADE has blocked the Brazilian portion of the transaction ordering the applicants to sell a plant in Brazil

16 Merger Control in Argentina Political influence in the analysis of merger cases Developments on the concept of control Remedies and difficulties in implementing them Delays delays and delays

17 Private Enforcement of Antitrust Claims?

18 Antitrust litigation in Latin American? Brazil and Mexico: nascent. Argentina: not really there yet. No treble damages No Class Actions No plaintiff s bar

19 Antitrust Compliance in Latin America Key is to raise awareness to surge in enforcement Real risks now Fines increasing Criminalization is next? Transition from permitted (or ignored violiations) to illegal.

20 Q&A

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