Brazil’s anti-trust authority, Cade, said on Tuesday it is investigating local steel association IABr for alleged anti-competitive conduct.
According to Cade, it has launched a probe over Brazil’s steel institute on Tuesday to investigate alleged abuse by IABr for using its petition rights with the aim to damage competing rebar importers, a practice known internationally as sham litigation.
Cade said the case started in 2011, following a request from the local association of the steel importing and producing companies, Abrifa, which accused IABr of filing lawsuits to prevent already established Brazilian companies from importing rebar.
According to Cade’s superintendent, IABr adopted precautionary actions to produce evidence in advance—through preliminary injunctions—that questioned the compliance of the imported product to Brazilian safety norms.
As a result of the move, rebar cargos were removed from the ports while inspections were conducted, causing significant costs to importers and avoiding the circulation of the materials in the country.
Cade’s superintendent found that most of the lawsuits were based on both false or imprecise information. Some of the lawsuits were even filed repeatedly at different courts with the “only aim” to avoid competition in Brazil’s rebar market.