Cade approves creation of logistics company between Correios and Azul

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The Court of the Administrative Council for Economic Defense (Cade) approved, without restrictions, the creation of a cargo transport logistics company between Correios and the airline Azul. The board's understanding is that there are no relevant competitive problems to impede the deal.


The vote of the rapporteur, counselor Maurício Maia, prevailed, who denied two appeals presented by Latam and Avianca against the deal and maintained the understanding of the body's General Superintendence, which had approved the operation in December.

“In my understanding, the operation does not generate competition concerns and also brings efficiencies, by creating a new company for the cargo transport logistics sector. Azul's low participation in this market eliminates competition concerns", he added.

Coherent Decision
For lawyer Eric Hadmann , from Gico, Hadmann & Dutra Advogados, even with Cade's decision, the matter may be far from over. "The main concerns of Latam and Avianca referred to potential B2B Lead negative effects resulting from exclusivity and how this fact could result in alleged competitive distortion, the so-called cross subsidy. Cade dismissed these concerns, but ordered a copy of the decision to be sent to the TCU , since there was no bidding process for the formation of the joint venture. Apparently, we will still have scenes from the next chapters in this operation."

For the lawyer, Cade's decision today is consistent with the Court's precedents. However, it does not prevent Cade from evaluating the future conduct of Correios in the market. "As was the case with the company's attempts to extend its legal monopoly on the delivery of letters to the delivery of packages. In this case, Correios agreed to pay 21.9 million to close the investigation", he explains.



Resources
The superintendency had already approved the deal. Competitors Latam and Avianca, however, filed an appeal, which led to the case being re-analyzed by the council court. The companies argued that the deal could affect the competitive environment, as Azul could carry out, exclusively and permanently, the domestic air transport of Correios cargo, harming other players in the market.


“Furthermore, there is concern that Correios may adopt discriminatory practices, extending its legal monopoly on letter delivery and its dominant position in the parcel delivery market to other markets,” the companies defended.