Brazilian Court Overturns Antitrust Regulator’s Order Against Itaú Unibanco

A recent ruling by Brazil’s Federal Court in Brasília has overturned a preventive measure imposed by the General Superintendence of the Administrative Council for Economic Defense (CADE) on Itaú Unibanco. The measure was related to an ongoing investigation into alleged anti-competitive practices regarding digital wallet transactions.

According to a statement, the preliminary ruling was signed on Monday (24) by Liviane Kelly Soares Vasconcelos, a substitute federal judge of the 20th Court of the Federal District. The decision, which was obtained by Valor, found that the evidence presented by Itaú Unibanco substantiated claims of a violation of the right to a defense and due process.

The judge further noted that CADE’s General Superintendence acted with “disproportionate urgency” in implementing the preventive measure, which included a significant daily fine for non-compliance. Per a statement in the ruling, the judge emphasized that failing to grant the injunction could have caused substantial harm to Itaú, particularly due to the severity of the imposed penalty.

The dispute arose following a complaint from the Federal Public Prosecutor’s Office, which was alerted by the Brazilian Internet Association (ABRANET). According to a report by Valor, PicPay, a member of ABRANET, cited “indiscriminate refusals” by Itaú to process digital wallet transactions from competitors. Similar allegations were made by other companies in the sector.

The Public Prosecutor’s Office argued that Itaú had engaged in anti-competitive behavior concerning payment arrangements via credit cards, allegedly imposing restrictions and obstacles on acquirers and electronic money issuers. In its defense, Itaú denied any wrongdoing, attributing the restrictions to concerns over 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 eliminate the alleged anti-competitive practices within 30 days. The ruling, signed by CADE General Superintendent Alexandre Barreto, stipulated a non-compliance penalty of R$250,000 per day.

The court’s decision represents a significant development in the case, with potential implications for regulatory oversight in Brazil’s digital payments sector.

Source: Valor International