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CADE launches study on the payments market


The document highlights card and other electronic payments.


The Brazilian Antitrust Watchdog (CADE)’s Department of Economic Studies (DEE) has just launched the study Cadernos do CADE: Mercados de Instrumentos de Pagamento (CADE's Notebooks: Payment Instruments Market).


The document is part of a series of studies conducted the antitrust authority to consolidate, organize and disclose CADE's case law in specific markets, both to support future decisions from the General Superintendence and the Tribunal and to encourage further research on the industry.


This edition highlighted card and other electronic payments. In addition to an historical approach to regulation and industry development, the document gathered international experience and CADE’s case law from 1995 to 2019.


In total, 121 mergers and investigations have been decided by CADE.


By the end of the research, three main issues raised competitive concerns:


  • High concentration in the banking sector (and high market shares held by traditional banks).

  • Market opening followed by vertical integration (large vertically integrated groups).

  • Market organization as a multi-sided platform, causing pricing to be more complex in this industry.


The study shows, however, that "the numerous interventions undergoing in the market have contributed to the industry growth and enhanced competition".


Ongoing investigation


The newly published study may help in the decisional process of CADE’s ongoing investigations such as Nubank v. Itaú, Bradesco, Santander, Banco do Brasil and Caixa Econômica Federal (Investigation n. 08700.003187/2017-74).


In this case, Nubank reported discrimination from the investigated banks in the credit card issuing market through the following conducts: creating barriers to the use of the automatic debit function; difficulty in accessing essential information; difficulty in dealing with accrediting and liquidator institutions; lobbying and resistance to competitive-friendly regulation; poaching strategic employees; and possible collusion.


The procedure is still under the fact finding phase and trial is not expected any time soon.




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