Cade Advances Investigation Into Possible “HR Cartel”

The General Superintendence of Brazil’s Administrative Council for Economic Defense (“CADE“) is reported to have gathered more than 2,000 documents and other evidentiary items within an investigation involving more than 50 large Brazilian and multinational companies, across two administrative proceedings examining the alleged practice of anticompetitive conduct consisting of the systematic exchange of sensitive information regarding compensation, salary adjustments and benefits among companies operating in Brazil.

The case originated from a leniency agreement executed in 2020 and subsequently gave rise to an administrative proceeding as of 2024, encompassing conduct allegedly carried out between 1994 and 2021.

In light of the evidence gathered, Cade’s technical staff is considering recommending that the agency’s Court find the involved companies liable for unlawful conduct from an antitrust standpoint and is still assessing whether the conduct may be characterized as a cartel. Any eventual finding of liability, however, remains subject to review by Cade’s Court. The conduct under investigation consists of the exchange of data concerning salary ranges, salary adjustments and corporate benefits, such as health plans and childcare assistance, carried out initially through in-person meetings with PowerPoint presentations and, subsequently, through access-restricted spreadsheets and exchanges of emails and messages among the companies’ HR executives.

The central issue to be resolved by the antitrust authority lies in establishing the boundary between the legitimate practice of benchmarking and the sharing of strategic information capable of reducing competitive uncertainty among rivals as to future hiring conditions, a circumstance that may constitute an infringement of the economic order irrespective of the existence of an explicit wage-fixing agreement.

Accordingly, companies are advised to review their salary-benchmarking practices and strengthen internal antitrust compliance controls concerning the sharing of HR data with competitors.