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Busted Trust | Infoglobo Ad Practices Curbed by CADE

case377

Source: Brasilianas.Org | Folha de S. Paulo

Topic: Infoglobo signs accord with CADE to avoid antitrust verdict

Infoglobo Comunicações e Participações, owner of the newspapers O Globo, Extra and  Expresso da Informação, has signed an agreement with antitrust regulator CADE in order to avoid being convicted of an infraction against the economic order.

The antitrust body found that the discount policy adopted by the company in the sale of ad space in its newspapers could limit competition in the Rio de Janeiro market, where the newspapers in question circulate.

A Infoglobo agreed to pay R$ 1.94 milhão and to adjust its advertising policies, thereby avoided a conviction and a fine. THe company issued a note confirming the terms of the agreement and saying that it promised to refrain from the practices in question for a period of five years.

The decision was formalized through the signing of a TCC — A decisão foi formalizada por meio da assinatura de um TCC (Termo de Compromisso de Cessação) with CADE last week. According to the terms of the contract, the company may not offer discounts related to a an advertiser’s total ad buy in the three papers.

Infoglobo will no longer be able to offer discounts and package deals for ads running in all three papers, which tends to diminish the amount charged compared with the price paid for advertisements in just one of the papers.

The case was brought by the Ministry of Justice in 2005 after receiving complaints from two competitors, Jornal do Brasil and O Dia.

The two publications accused Infoglobo of adopting a series of anticompetitive practices: imposing exclusivity contracts on ad buyers, conditioning discounts on the purchase of ads in more than one of the three Infoglobo dailies, conferring advantages on advertisements carried by the Globo radio and TV network — part of the same group as Infoglobo — and selling Extra at a price below the  cost of production.

The condemnation of Infoglobo came in 2012, in a finding by the Secretariat of Economic Law, an extinct agency now incorporated into CADE.

The SDE found that the market for print newspapers is unstable and subject to heavy competitive pressures from other media. It observed that the difficulties of operating in this market has forced some newspapers to close down, as in the case of the Jornal do Brasil, which denounced the practice.

Jornal do Brasil lives on, billing itsef as Brazil’s first 100% digital newspaper.

The rapporteur in the case, Ana Frazão, said that the “undeniable market power” of Infoglobo, which at the time of the investigation controlled 70% of the print press market in Rio, aggravates the potential harm to competitors due to its advertising discount policy.

Frazão says that the purpose of the accord with Infoglobo is to prevent similar situations from occurring [elsewhere].