Brazil’s CADE investigates alleged anti-competitive practices in digital wallet transactions.
Brazil’s Federal Court in Brasília overturned a preventive measure imposed by the General Superintendence of the Administrative Council for Economic Defense (CADE) on Itaú Unibanco in a case investigating alleged anti-competitive practices related to barriers in digital wallet transactions by competitors.
The preliminary ruling, signed by Liviane Kelly Soares Vasconcelos, substitute federal judge of the 20th Court of the Federal District, was issued on Monday (24) and obtained by Valor.
The judge found that the documents submitted by Itaú “lend credibility to the argument of a violation of the right to a defense and due process.” She also noted that the General Superintendence acted with “disproportionate urgency in enforcing the preventive measure, including a high daily fine for non-compliance.”
“Failing to grant the injunction could cause substantial harm to the petitioner, given the magnitude of the imposed fine,”
the judge wrote.
Last Friday, Valor reported on CADE’s preventive measure against the bank. The investigation was initiated following a complaint from the Federal Public Prosecutor’s Office, which was alerted by the Brazilian Internet Association (ABRANET).
PicPay, a member of ABRANET, reported “indiscriminate refusals” by Itaú to process digital wallet transactions from competitors, similar to complaints from other companies in the sector. The Public Prosecutor’s Office alleged that Itaú engaged in anti-competitive practices related to payment arrangements via credit cards, particularly concerning restrictions and obstacles imposed on acquirers and electronic money issuers.
In its defense, Itaú denied any irregularities, attributing the barriers to high default rates and the need to prevent household over-indebtedness.
Under the now-overturned decision by CADE’s technical department, Itaú would have been required to cease the alleged anti-competitive practices within 30 days. The ruling was signed by Alexandre Barreto, CADE General Superintendent. Non-compliance would have resulted in a daily fine of R$250,000.
CADE said it has not yet been notified of the court’s decision.
Source: Valor International
