Brazil’s Administrative Council for Economic Defense approved its first settlement in a case probing alleged algorithmic collusion in fuel pricing, restricting the use of the software pending compliance review.
Brazil’s competition authority has approved a settlement agreement in an investigation into the use of algorithmic pricing software in the fuel retail market, marking the first case of alleged algorithmic collusion to be analyzed by the agency’s judicial body.
The Tribunal of the Administrative Council for Economic Defense, or CADE, approved the agreement Wednesday through a Term of Commitment to Cease, or TCC, signed with Intelprice Soluções de Precificação Ltda., developer of the Aprix pricing software. The authority's investigation examined whether the tool facilitated coordination and price alignment among competing fuel stations.
“The software was designed to capture competitively sensitive information from several fuel stations,”
said Gustavo Augusto de Lima, CADE's interim president of CADE and the lead councilor in the case, adding that this structure allows market price standardization.
Under the settlement, Intelprice is prohibited from commercializing the software until it undergoes a formal compliance assessment.
“Once this compliance is demonstrated, then the software may be used,”
de Lima said. He described the case as “virtually preventive,” emphasizing the authority’s focus on avoiding future anticompetitive effects rather than sanctioning harm already materialized.
The agreement also includes a fine which de Lima described as “relatively modest” and reflective of the company’s early stage of operations.
The TCC must be formally signed within 30 days.
As part of the settlement, Intelprice committed to increasing transparency and explanation of its pricing algorithm for CADE’s Superintendence, the agency's investigative arm. The company acknowledged its participation in the conduct under investigation and agreed to cooperate with the ongoing probe, which continues with respect to other potential market participants.
The TCC imposes a series of behavioral remedies, including the appointment of a competition compliance coordinator, reinforcement of a competition compliance program and the adoption of strict data confidentiality clauses in contracts with clients. The agreement also requires rigid procedures to segregate prices and commercial strategies among clients operating in the same local markets.
Intelprice must notify CADE if its market share, or that of other companies in its economic group, reaches 20 percent in any municipality. The authority will also retain access to the company’s facilities and pricing software throughout the duration of the agreement and may require an independent audit to confirm that the algorithm complies with antitrust standards.
Until the measures are fully implemented, the company is barred from entering into new contracts.
Source: MLex
