Cade condemns Tecon Suape for abuse of dominant position

At the trial session on Wednesday (10/16), the Monopolies and Mergers Commission (Cade) condemned the company Tecon Suape for abuse of dominant position in the container storage market in Suape Port, Pernambuco. For anti-competitive conduct, the port operator will have to pay a fine of US$7.1m.

The case began in September 2017, following the complaint of Suata Unified Storage Service and Terminal Customs and Atlantic Terminals. The companies accused Tecon Suape of anti-competitive conduct by imposing, in addition to the basic box rate, a surcharge called “ISPS”, for the recovery of investments and maintenance of equipment to meet the requirements of the ISPS Code.

Tecon operates under a monopoly regime in the port operations of the Port of Suape. In addition, it offers customs warehousing services to exporters and importers, in which it competes directly with customs warehousing companies located outside the port area, such as Suata and Atlântico.

According to the complaint, it would be Tecon’s responsibility, as a port operator, to bear the costs of adapting to the ISPS Code, as security is an essential condition for the provision of cargo handling services. Thus, according to the complainants, separate charging would not be justified, as if it were a new service, as this would benefit the operator.

Court review

In a vote presented today, Councilor Mauricio Oscar Bandeira Maia pointed out that the collection of the ISPS fee as it is performed today by Tecon Suape artificially increases the costs of bonded warehouses, causing damage to competition in this market. For the counselor, the expenses incurred with the ISPS are regular and ordinary and should be demanded from the shipowners (who unload and move containers between the ship and the terminal gate) as part of the box rate, not the bonded premises.

“By charging ISPS for bonded premises, the representative transfers to such agents the security cost of the service provided to shipowners. In this way, Tecon Suape obtains, due to its monopolistic performance, the power to make compensation and discounts on storage to importers, artificially unbalancing the conditions of competition in the storage market,” he assessed.

The president of Cade, Alexandre Barreto, fully followed the understanding of Bandeira Maia and stressed, through a vowel vote, that the collection also generates negative effects because it causes legal uncertainty. In this sense, he accompanied the counselor in the deliberation condemning Tecon, termination of conduct, and sending Cade’s decision to the National Agency for Water Transport (Antaq).

“Cade is fully interested in working in synergy with Antaq to achieve this goal,” he said.

For the anti-competitive practice, the Court ordered Tecon Suape to pay a fine of R$7.1m. It was also determined that the port operator refrain from charging customs warehouses and importers storing cargo the costs incurred to adapt and comply with ISPS Code obligations. In addition, Tecon Suape will not be able to create any new charges that have the same purpose.

Before Barreto and Bandeira Maia, Councilor Paula Azevedo and former Councilor João Paulo de Rezende had already voted for the condemnation of Tecon Suape. Former counselors Paulo Burnier (case rapporteur) and Polyanna Vilanova voted to close the case.

With the decision, the insertion of greater competitiveness in the sector is expected, with the consequent reduction of costs for the activities of importation of goods in the market.

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