An extract from The Cartels and Leniency Review, tenth Edition
Enforcement policies and steering
i Legal framework
The laws regulating cartels and leniency in Portugal is the Portuguese Competition Act (the Competition Act), which was final revised in 2012.2 The Portuguese Competition Authority (AdC) has adopted a number of notices and tips relating to numerous procedural points, in accordance with the European Commission’s tips, together with, in specific, the Guidelines on the Calculation of Fines,3 the Notice concerning Immunity from a Fine or Reduction of Fines4 and the Guidelines on the Handling of Antitrust Proceedings.5
The time period ‘cartel’ doesn’t seem as such in the Competition Act, though cartel exercise, together with different collusive agreements and concerted practices, is prohibited below Article 9 (equal to Article 101 of the Treaty on the Functioning of the European Union (TFEU)). There are, nonetheless, makes an attempt to outline cartels in Portuguese laws. Article 75(1) of the Competition Act, in establishing the leniency regime, states that the leniency provisions are solely relevant to agreements and concerted practices amongst opponents whose object or impact is the restriction of competitors by, inter alia:
- immediately or not directly fixing sale or buy costs or some other transaction circumstances;
- limiting or controlling manufacturing, distribution, technical growth or funding; or
- sharing markets (together with bid rigging), via import or export restrictions or via anticompetitive actions towards different opponents.
An equivalent definition was included in Law No. 23/2018 of 5 June 2018 (the Private Enforcement Law),6 which transposed the Damages Directive7 and in addition made reference to the ‘secret’ nature of cartel conduct.8
Prohibited agreements or selections below Article 9 are null and void, until they fall throughout the scope of Article 10 of the Competition Act – equal to Article 101(3) of the TFEU (i.e., whether it is demonstrated that they contribute to enhancing manufacturing or distribution of products or providers or to selling technical or financial progress). In reality, Article 10(3) of the Portuguese Competition Law makes an express reference to the EU block exemption laws for use as related evaluation framework by the AdC, even in purely inner circumstances with no influence on EU commerce.
In Portugal, cartels are sanctioned as misdemeanours, or administrative offences,9 with fines of as much as a most of 10 per cent of the offending enterprise’s turnover in the 12 months previous the choice.10 Under the Competition Act, people with administration, path and monitoring capabilities are additionally liable to be sanctioned for competitors legislation infringements in sure circumstances.11 The Competition Act additionally supplies for ancillary penalties akin to, for instance, the prohibition on collaborating in public tenders for a two-year interval for competitors legislation infringements regarding these aggressive procedures (see Section V).12
The Competition Act additionally consists of the likelihood to learn from immunity from fines or a discount in fines in cartel circumstances13 below the phrases of the leniency programme,14 based on which, undertakings or people collaborating in the practices described in the provisions referred to might apply for immunity or a discount of a effective in the event that they recognise their participation in the breach and supply concrete proof that enables the AdC to ascertain the existence of the alleged infringing conduct (see Section IV).
The Competition Act additionally supplies for a settlement mechanism permitting a discount of a effective earlier than and after the assertion of objections.15 There can be the choice to shut investigations topic to circumstances, equivalent to commitments submitted by events, below Article 23 (see Section V).16 In this case, the investigative course of may be reopened inside two years if the alleged infringing conduct resumes.
The competitors provisions, in specific these associated to cartel prohibition, are enforced by the AdC, by the specialised Competition, Regulation and Supervision Court (the Competition Court) and, when associated to points not solely pertaining to competitors legislation, by different civil and administrative courts.
The AdC is an impartial administrative physique in cost of the general public enforcement of competitors legislation in Portugal in all sectors of the economic system, with out exception. When speaking its competitors coverage priorities for 2021, the AdC declared that it stays ‘vigilant in detecting abuses or anti-competitive habits that exploit the present scenario, for instance in phrases of value fixing or market sharing, at any degree of the provision chain, together with in digital commerce’.17
To this finish, the AdC seeks to extend its capability for detection and investigation of anticompetitive practices, particularly via complaints by shoppers and different market members, and thru its leniency programme. A concrete instance of the AdC’s aim to extend its capability for detection and investigation is the proposed modification of the Competition Act ensuing from the preparation of the transposition of the ECN+ Directive.18 The AdC has, in reality, been main the transposition of the ECN+ Directive into Portuguese legislation in the course of the previous two years and submitted to the federal government the ultimate draft transposition proposal at present below dialogue in Parliament. It is evident from the draft proposal that the AdC has additionally taken benefit of this chance to suggest changes to the present Portuguese competitors legislation framework, exceeding the scope of the ECN+ Directive and probably resulting in a rise in the AdC’s investigative powers and entry to proof.19
The Competition Court is a specialised court docket integrated in 2012, competent to listen to appeals towards selections of sectoral regulatory entities, and of the AdC. It can be the competent court docket for personal enforcement circumstances solely based mostly on competitors legislation infringements (see Section VII).
ii Competition authority selections and case legislation
The powers of the AdC in phrases of cartel investigation are supplied for in the Competition Act and subsidiarily regulated by the authorized framework relevant to misdemeanour offences, which might grant investigated entities some extra safety in phrases of rights of defence.
The AdC’s selections could also be appealed to the Competition Court.20 The selections of this Court may be appealed, at a second degree, to the Lisbon Court of Appeal, which has an autonomous part on mental property and competitors, regulation and supervision. Appeals restricted to problems with legislation are lodged with the Supreme Court. There can be the potential for interesting to the Constitutional Court to look at questions of constitutionality raised throughout the course of.
The AdC’s most important cartel circumstances thus far are the Glucose Diagnostic Strips cartel,21 the Salt cartel,22 the Flour Mills cartel,23 the Catering Services cartel,24 the Polyurethane Foam cartel,25 the Cleaning Companies cartel,26 the Office Consumables cartel,27 the alleged Train Maintenance cartel,28 the alleged Insurance cartel29 and the alleged hub-and-spoke cartel circumstances in the meals retail sector.30
In 2019, the AdC made further efforts to detect and examine cartels, and a few important landmarks have been reached, equivalent to the primary sanctioned cartel in the monetary sector (the Insurance cartel),31 which resulted in the most important effective in the historical past of the AdC (a document that has since been exceeded in a number of circumstances (see Section IV.ii)). The undertakings taking part in the Insurance cartel have been sanctioned for alleged market sharing and coordinating costs in the sale of office accident, well being and motor insurance coverage to massive company shoppers. The objective of this coordination was apparently to permit the incumbent insurer to retain their respective shoppers. This cartel was sanctioned following a leniency software, and complete fines of €54 million have been imposed in the case,32 together with fines for 2 administrators and two directors.33
In September 2019, the AdC fined 14 banks a complete of €225 million (with the very best particular person effective at €82 million) for an alleged concerted follow akin to an alternate of delicate business data on loans. Although the information weren’t analysed as a cartel, the proceedings have been initiated subsequent to a leniency software from a primary applicant, which benefited from a full exemption of the effective, and a second applicant, which was rewarded with a 50 per cent discount of its effective.34
Also, in December 2018,35 April 2019,36 June 201937 and March 202038 the AdC fined 5 undertakings and 5 administrators and directors a complete of over €3.4 million for taking part in the Train Maintenance cartel that targeted on public tenders for railway upkeep, together with practices that might be characterised as bid rigging.39 The proceedings have been concluded sooner than anticipated (between December 2018 and June 2019) for 3 of the concerned undertakings, due to their collaboration with the investigation in admitting their participation in the cartel, and the avoidance of judicial litigation by utilizing the settlement process. The share of effective discount is just not clear from the publicly obtainable data, however, sometimes, the AdC will permit the ten per cent discount set out on the EU degree. On the opposite hand, the 2 firms that didn’t use the settlement process have been, in addition to the effective, sanctioned with a two-year ban from participation in public tenders (see Section V).
In 2020, based on public data, the AdC initiated varied proceedings associated to cartels, having issued six statements of objections for alleged anticompetitive agreements, price-fixing and hub-and-spoke preparations, in the meals retail,40 telecommunications41 and land surveying42 sectors. Also in 2020, the AdC imposed its highest ever particular person fines. First, at the start of December, by sanctioning a telecommunications operator with a effective of €84 million for alleged market sharing and price-fixing of cell and glued telecommunications providers.43 It did so once more on the finish of December, by sanctioning six massive retail meals chains, two suppliers, a board member and a director for alleged price-fixing via hub-and-spoke preparations with a complete effective of €304 million, together with the very best particular person effective of €121.9 million.44
In 2021, regardless of its critical results on the world economic system, the covid-19 pandemic doesn’t appear to have constrained the AdC from vigorous enforcement exercise and, in November, it issued one other determination discovering the existence of a hub-and-spoke cartel and sanctioning 4 grocery store chains and a drinks provider with an general effective of €92.8 million.45
In 2021, the AdC additionally instituted varied proceedings associated to cartels, issuing two statements of objections for alleged cartel conduct – one in the context of public tenders in the non-public surveillance sector46 and one other for hub-and-spoke preparations in the meals retail sector.
The AdC additionally issued sanctioning selections in a case of price-fixing via selections by an affiliation in the land surveying providers market,47 a case of vertical restraint in the important medical units sector involving an alleged vertical settlement on market sharing and a ban on passive gross sales,48 and in a case of a non-compete settlement in the marketplace for the supply of providers to waste administration programs.49 Further, the AdC issued two different statements of objections: one concerning the primary case in Portugal of alleged anticompetitive settlement in the labour market,50 and one for an alleged anticompetitive settlement in the context of sectoral associations in the healthcare sector.51
According to public data, 2021 was additionally a document 12 months for daybreak raids carried out by the AdC, with searches in firms from varied sectors, together with banking and finance, power, data providers and healthcare.
In brief, the AdC has been significantly proactive in investigating and sanctioning anticompetitive practices in latest years. According to publicly obtainable data, in complete in 2019,52 202053 and 2021, the authority issued 19 sanctioning selections with fines totalling roughly €830 million, one determination with treatments (in the bakery sector) and 15 statements of objections, in addition to conducting daybreak raids in at the very least eight investigations and receiving at the very least 4 identified leniency requests.