Competition law in Portugal: overview

A Q&A guide to competition law in Portugal.

The Q&A gives a high level overview of merger control, restrictive agreements and practices, monopolies and abuse of market power, and joint ventures. In particular, it covers relevant triggering events and thresholds, notification requirements, procedures and timetables, third party claims, exclusions and exemptions, penalties for breach, and proposals for reform.

To compare answers across multiple jurisdictions visit the Competition law Country Q&A tool.

This Q&A is part of the PLC multi-jurisdictional guide to competition and cartel leniency. For a full list of jurisdictional Competition Q&As visit www.practicallaw.com/competition-mjg.

For a full list of jurisdictional Cartel Leniency Q&As, which provide a succinct overview of leniency and immunity, the applicable procedure and the regulatory authorities in multiple jurisdictions, visit www.practicallaw.com/leniency-mjg.

Mário Marques Mendes and Pedro Vilarinho Pires, Marques Mendes & Associados
Contents

Merger control

1. Are mergers and acquisitions subject to merger control in your jurisdiction? If so, what is the regulatory framework and what authorities are responsible for merger control?

Regulatory framework

Merger control is regulated by:

  • Law No. 18/2003 of 11 June 2003, as amended by Decree-Law No. 219/2006 of 6 November 2006, Decree-Law No. 18/2008 of 29 January 2008 and Law No. 52/2008 of 28 August 2008 (Competition Act), which created the current competition legal regime.

  • Decree-Law No. 10/2003 of 18 January 2003 (Decree), which created the current Competition Authority (Authority).

The Code of Administrative Procedure, also governing the decision-making of public entities, applies on a subsidiary basis to the merger control procedure.

The Code of Administrative Court Procedure, governing judicial appeals of administrative decisions, applies on a subsidiary basis to judicial appeals of Authority's decisions.

The general regime for quasi-criminal minor offences (contra-ordenações) is set out in the Decree-Law no. 433/82 of 27 October 1982, as amended, and applies, on a subsidiary basis, to the:

  • Sanctioning proceedings used by the Authority under the Competition Act (including those for infringement of the merger control rules).

  • Appeals of the Authority's decisions adopted in such proceedings.

See Questions 16, 24 and 26.

Regulatory authority

The Authority enforces competition rules, including merger control (see box, The regulatory authority). It is a public body with administrative and financial autonomy. It has statutory independence to perform its activities, without prejudice to:

  • The general competition principles established by the government under its constitutional and legal authority to supervise competition policy.

  • Certain acts subject to general ministerial supervision, such as the approval of the Authority's budget and plan of activities, and other acts involving the state's annual budget.

The government minister in charge of economic affairs (currently the Minister of Economy and Employment) can, in certain circumstances, intervene in merger control when a prohibition decision is appealed to him (see Question 10).

Triggering events/thresholds

2. What are the relevant jurisdictional triggering events/thresholds?

Triggering events

A concentration exists when any of the following occur:

  • Two or more previously independent undertakings merge.

  • One or more persons, who already have control of at least one or more undertakings, acquire control, directly or indirectly, of the whole or part of one or more other undertakings.

  • Two or more undertakings create a joint venture intended to perform, on a lasting basis, the functions of an autonomous economic entity.

Control is an act, in any form, which confers the ability to exert, separately or jointly, a decisive influence on the activities of an undertaking (Competition Act). In particular, this is the acquisition of:

  • All or part of the share capital.

  • Rights of ownership, use or enjoyment of all or part of an undertaking's assets.

  • Rights (or the signing of contracts), which grant a decisive influence over the composition or decision-making of an undertaking's corporate bodies.

The provisions on concentrations do not apply to the acquisition of:

  • Shareholdings or assets under the terms of a corporate recovery or bankruptcy.

  • A shareholding merely as a guarantee.

  • Shareholdings in non-financial undertakings, by credit institutions, if the acquisition is not prohibited by Article 101 of the General Regime for Credit Institutions and Financial Companies (Decree-Law No. 298/92 of 31 December 1992). Under Article 101, credit institutions cannot hold for more than three years (or five years in case of indirect participation held through risk capital companies or holding companies), directly or indirectly, a participation in a non-finance sector company, which grants more than 25% of the voting rights in that company.

Competition law does not apply to mergers that take place in other jurisdictions and have no legal effect in Portugal.

Thresholds

Provided the transaction does not have a European dimension (Regulation (EC) 139/04 on the control of concentrations between undertakings (Merger Regulation)), concentrations are subject to prior notification if either:

  • Their implementation creates or reinforces a share of more than 30% in the national market for a particular product or service, or in a substantial part of it.

  • In the past financial year, the:

    • undertakings concerned recorded a total combined turnover in Portugal of more than EUR150 million (as at 1 December 2011, US$1 was about EUR0.7), net of directly related taxes; and

    • individual turnover in Portugal of at least two of the undertakings concerned was more than EUR2 million.

The rules for calculating market share and turnover essentially follow the rules set at EU level, notably those dealing with groups of undertakings, acquisitions of parts of an undertaking and concentrations in the financial sector (Article 10, Competition Act).

Notification

3. What are the notification requirements for mergers?

Mandatory or voluntary

Prior notification to the Authority is mandatory when the statutory thresholds are exceeded (see Question 2, Thresholds).

The Authority can also start proceedings on its own initiative for concentrations (Article 40, Competition Act):

  • That it becomes aware of and that are subject to mandatory notification but have not been notified.

  • If the express or implied clearance decision was based on false or inaccurate information provided by the parties which related to circumstances essential for the decision.

  • Concerning which there has been total or partial disregard for the obligations or conditions imposed by a clearance decision.

Timing

Notification must be made within seven business days of the:

  • Conclusion of the agreement.

  • Date of disclosure of the preliminary announcement of a takeover bid or an exchange offer.

  • Date of disclosure of the announcement of a bid to acquire a controlling interest.

Formal/informal guidance

Before notification, the parties may request that the Authority assess the proposed concentration (Article 9(3), as amended by Decree-Law No. 219/2006), following the Guidelines on the prior assessment procedure (Linhas de orientação sobre o procedimento de avaliação prévia), adopted by the Authority on 3 April 2007.

The prior assessment procedure is aimed at (Guidelines on the prior assessment procedure):

  • Assisting the undertakings in filling in the notification form (see below, Form of notification).

  • Gathering the maximum possible data to avoid future requests for additional information.

  • Informing the undertakings whether a mandatory obligation to notify exists.

  • Identifying possible competition law concerns that the contemplated transaction may raise.

(See also the Authority's Press Release No. 7/2007 of 16 April 2007, announcing the pre-notification procedure.)

The parties must start pre-merger discussions at least 15 days before the deadline to notify (see above, Timing). The amount of data that must be provided is considerable and, whenever possible, the parties should submit a preliminary version of the notification form.

The pre-notification procedure does not prevent the Authority from (Guidelines on the prior assessment procedure):

  • Requesting additional data during the subsequent proceedings.

  • Adopting in the subsequent proceedings a final decision different from that anticipated in the prior assessment.

In addition to the above procedure the Authority is available for informal discussions on the notified transaction (see Question 1).

Responsibility for notification

In a merger or the establishment of common control (for example, a joint venture), the undertakings must notify jointly, through a common representative. In other cases, the undertaking or person intending to acquire control files the notification.

Relevant authority

Notification must be made to the Authority.

Form of notification

The Authority has approved a notification form (Regulation 120/2009 of 17 March 2009), requiring detailed information to be submitted, including:

  • Tax returns for the past three financial years.

  • Copies of any agreements aimed at implementing the transaction.

  • A definition of, and information on, the relevant markets.

The notifying parties can ask for parts of the information provided to be kept confidential by submitting a non-confidential version of the notification (see Question 5, Confidentiality on request).

Notifications must be made in Portuguese.

Filing fee

The basic fees payable for the assessment of concentrations are (Regulation 1/E/2003 of 3 July 2003):

  • EUR7,500 when the previous financial year's combined turnover in Portugal for the companies involved was at least EUR150 million.

  • EUR15,000 when the previous financial year's combined turnover in Portugal for the companies involved was between EUR150 million and EUR300 million.

  • EUR25,000 when the previous financial year's combined turnover in Portugal for the companies involved was more than EUR300 million.

Calculations of combined turnover are made according to the Competition Act.

A notification is not effective before the payment of the fees.

The fees are doubled when the Authority initiates proceedings on its own initiative under Article 40 of the Competition Act (see above, Mandatory or voluntary).

If the Authority proceeds to an in-depth investigation (Article 35, Competition Act) (see Question 4), a further 50% of the basic fee is payable.

Obligation to suspend

Until implied or express clearance is granted, a concentration subject to prior notification must not be put into effect. The validity of any legal transaction carried out in breach of this rule depends on the authorisation of the concentration.

However, a public bid or an exchange offer that has been notified can be implemented, provided that the acquirer does not exercise any voting rights.

Undertakings can make a justified request to the Authority to put a concentration into effect or exercise voting rights. The Authority can attach conditions or obligations to its permission to ensure effective competition.

Procedure and timetable

4. What are the applicable procedures and timetable?

The parties must establish whether the transaction amounts to a concentration that must be notified (see Question 2). If so, it must be notified to the Authority within the specified time limits (see Question 3, Timing). Before notification, the parties can request that the Authority assess the proposed concentration (see Question 3, Formal/informal guidance).

If the notification is complete it becomes effective on the date of payment of the filing fees (see Question 3, Filing fee). If the notification is incomplete or includes inaccurate data the Authority invites the notifying parties to complete the notification within seven business days and the notification becomes effective on the date the missing elements are filed.

When the Authority receives a notification, it publishes the essential details (see Question 5, Publicity and Procedural stage) and indicates a time limit (which must not be less than ten business days) for interested third parties to submit observations (see Question 6).

The Authority must complete its investigation within 30 business days of the effective date of notification (this deadline is suspended if the Authority requests additional information). It can decide either to:

  • Authorise the concentration, with or without conditions or obligations.

  • Start an in-depth investigation (see below), if it considers that the concentration may create or strengthen a dominant position, which may result in significant barriers to effective competition in the Portuguese market or in a substantial part of it.

If a decision is not made within 30 business days, the concentration is deemed cleared. This may be shortened in certain cases (see below).

If an in-depth investigation is initiated, it must be completed within 90 business days of the effective date of notification (this deadline may by suspended up to a maximum of ten business days if the Authority requests additional information). Within this period, the Authority must either:

  • Authorise the concentration, with or without conditions or obligations.

  • Prohibit the concentration, prescribing appropriate measures if it has already been implemented.

If a decision is not made within the above time limit, the concentration is deemed cleared.

The initial 30-day period may be shortened under the Simplified Decision procedure, introduced on 24 July 2007. At present, this procedure is merely an internal guideline and is applied on a case-by-case basis depending on the specifics of each transaction. It may apply, in particular, to transactions which do not result in a significant change in the competitive structure of the market (for example, because they only consist of a transfer of a market share, and not of its increment).

For an overview of the notification process, see flowchart, Portugal: merger notifications.

Publicity and confidentiality

5. How much information is made publicly available concerning merger inquiries? Is any information made automatically confidential and is confidentiality available on request?

Publicity

The Authority publishes the essential details of the notification in two national newspapers at the expense of the notifying party(ies).

Procedural stage

Publication must be made no later than five business days of the effective date of notification (see Question 3, Filing fee).

Automatic confidentiality

There are no rules imposing automatic confidentiality.

Confidentiality on request

The notifying parties can ask for parts of the information provided to be kept confidential, by providing a non-confidential version of the notification form.

Rights of third parties

6. What rights (if any) do third parties have to make representations, access documents or be heard during the course of an investigation?

Representations

Third parties can inform the Authority of facts that cause it to start proceedings on its own initiative (see Question 3, Mandatory or voluntary).

In addition, interested third parties (that is, any third parties that may be affected by the notified transaction) can submit observations within the time limit stated by the Authority in its publication of notification proceedings (see Question 4).

Document access

Interested third parties can access the non-confidential version of the notification, including the attached documents (see Question 5, Confidentiality on request).

Be heard

Before making final decisions, the Authority must hear any interested parties (either persons or entities) that have raised objections to the concentration during the procedure.

Substantive test

7. What is the substantive test?

Concentrations that are within the scope of the Competition Act are forbidden if they create or reinforce a dominant position in the national market, or a substantial part of it, which may significantly impede effective competition.

The criteria for appraising concentrations essentially follow those in the previous Merger Regulation (Regulation (EEC) No. 4064/89 on the control of concentrations between undertakings). The effects on the competitive structure of the market are assessed, taking into consideration the need to preserve and develop effective competition in the Portuguese market in the interests of users and consumers (Article 12(1), Competition Act).

Remedies, penalties and appeal

8. What remedies can be imposed as conditions of clearance to address competition concerns? At what stage of the procedure can they be offered and accepted?

Following the proposal of undertakings by the notifying parties, the Authority can attach conditions and obligations (such as divestiture or other structural or behavioural undertakings) to a clearance decision, aimed at preserving effective competition (Articles 35(3) and 37(2), Competition Act) (see Question 4). They can be imposed either at the end of the first phase of the investigation or at the end of the in-depth investigation (see Question 4).

 
9. What are the penalties for failing to comply with the merger control rules?

Failure to notify correctly

Infringements of the Competition Act are considered to be quasi-criminal minor offences. This liability is without prejudice to any criminal liability for behaviour such as fraud.

Legal persons, companies and associations without legal personality can be liable for offences under the Competition Act when the acts are carried out either:

  • On their behalf.

  • On their account.

  • In the exercise of duty by members of their corporate bodies, their representatives or employees.

Individuals such as directors of legal persons and equivalent entities are responsible when they are, or should be, aware of the infringement and fail to take appropriate measures to terminate it immediately. The punishment is the same as that for the infringing undertaking, subject to a special reduction, unless a more serious penalty applies under another legal provision.

The courts can enforce unpaid fines.

In relation to failure to notify, the Authority can impose on each of the legal persons and equivalent entities:

  • Fines of up to 1% of the previous year's turnover in Portugal for failure to give prior notification.

  • Periodic penalty payments of up to 5% of the average daily turnover in the preceding financial year for each day of delay in notification, counted from the date set in the Authority's decision.

Implementation before approval or after prohibition

If a transaction subject to the obligation to suspend is implemented before clearance, or after prohibition, the Authority can impose fines of up to 10% of the previous year's turnover in Portugal. It can also impose periodic penalty payments (see above, Failure to notify correctly).

If an Authority's decision prohibits a concentration that has already been implemented, the Authority can also order appropriate measures to re-establish effective competition, including divestiture of assets (Article 37(1)(b), Competition Act).

Transactions related to a concentration are void if they infringe an Authority decision that prohibited the concentration or that ordered measures to establish effective competition (Article 41, Competition Act).

Individuals as well as legal persons and equivalent entities can be liable for fines (see above, Failure to notify correctly).

Failure to observe

Failure to comply with decisions imposing conditions or obligations on, or prohibiting, a concentration can result in fines of up to 10% of the previous year's turnover in Portugal. Periodic penalty payments can also be imposed (see above, Failure to notify correctly).

Transactions related to a concentration are void if they infringe an Authority's decision that imposed conditions (Article 41, Competition Act).

Individuals as well as legal persons and equivalent entities can be liable for fines (see above, Failure to notify correctly).

 
10. Is there a right of appeal against any decision? If so, which decisions, to which body and within which time limits? Are rights of appeal available to third parties or only the parties to the decision?

Rights of appeal and procedure

Appeal to the Minister of Economy and Employment. The notifying parties can, within 30 days from the notification of the Authority's decision, appeal prohibition decisions through an extraordinary appeal to the Minister of Economy and Employment, who can authorise the concentration if the resulting benefits to the fundamental interests of the national economy exceed the inherent disadvantages for competition (Article 34, Decree). This authorisation may contain conditions and obligations aimed at reducing the transaction's impact on competition.

Judicial appeals. In addition, the undertakings concerned and interested parties can appeal Authority's decisions (including clearance and prohibition decisions, and the imposition of sanctions for infringing merger control rules) and Ministerial decisions. In this respect, Law No. 52/2008 of 22 August 2008 (as amended by Law No. 3-B/2010 of 28 April 2010), which carries out a comprehensive reform of the organisation and functioning of the judicial courts, amends Articles 50, 52, 54 and 55 of the Competition Act, which establish the courts that can hear appeals from administrative and sanctioning decisions made by the Authority. The new regime has been entering gradually into force from 2 January 2009 and is expected to be fully implemented nationwide by 1 September 2014, currently applying to only three pilot judicial districts. Under the new rules, these appeals, which are exclusively entrusted to the Lisbon Court of Commerce, will be brought in the commerce section (juízo de comércio) of the court with territorial jurisdiction. In the absence of such a section, they will be brought before the commerce section of the Lisbon court.

Meanwhile, the creation of a specialised court to handle competition, regulation and supervision matters has been determined by Law No. 46/2011, of 24 June 2011, which will come into effect on the establishment of the court. The announced creation of such a specialised court to handle competition matters is expected to introduce significant changes to the above judicial review regime, and the new court will become the exclusive court of first instance for review of all the decisions adopted by the Authority.

For the appeals from the decisions of the Lisbon Court of Commerce or of the commerce section of the competent court:

  • If it is an appeal from a decision that imposed sanctions for infringing merger control rules, it must be filed within 20 business days from the notification of the Authority's decision.

  • If it is an appeal from a decision adopted within administrative proceedings (for example, a clearance decision, with or without conditions or obligations imposed, or a prohibition decision, or the Ministerial decision within the extraordinary appeal), it must be filed:

    • within no established deadline, if the Authority's decision is either null and void or legally does not exist;

    • for the remaining cases (for a request for annulment, combined (or not) with other requests), either:

      • within one year (if the appealing party is the Public Attorney (Ministério Público));

      • within three months in the other cases.

Third party rights of appeal

Interested third parties can appeal the Authority's clearance decisions and Ministerial decisions (see above, Rights of appeal and procedure).

Automatic clearance of restrictive provisions

11. If a merger is cleared, are any restrictive provisions in the agreements automatically cleared? If they are not automatically cleared, how are they regulated?

Restrictive provisions, such as non-compete, or non-solicitation of suppliers or employees covenants, are only covered by the decision clearing the merger if they are directly related and necessary to the implementation of the concentration (Article 12(5), Competition Act). If they are not covered by the decision, they are subject to the rules relating to restrictive agreements and practices (see Questions 13 to 26).

Regulation of specific industries

12. What industries (if any) are specifically regulated?

The merger control rules in the Competition Act apply to all economic sectors. If a concentration may affect specially regulated market sectors, such as finance and telecommunications, the Authority will ask, before issuing a decision, the relevant regulatory authority to give its opinion (without prejudice to that regulatory authority's own powers).

 

Restrictive agreements and practices

Scope of rules

13. Are restrictive agreements and practices regulated? If so, what are the substantive provisions and regulatory authority?

Horizontal and vertical agreements between undertakings, decisions by associations of undertakings and concerted practices, in whatever form, the object or effect of which is appreciably to prevent, distort or restrict competition in the whole of the national market or a part of it, are prohibited (Article 4, Competition Act).

The Competition Act applies to restrictive practices occurring, or having an effect, in Portugal (Article 1, Competition Act). In line with Article 101 of the Treaty on the Functioning of the European Union (TFEU), certain prohibited practices are expressly identified, including (Article 4, Competition Act):

  • Directly or indirectly fixing purchase or sale prices, or interfering with their establishment by free market forces, causing them artificially to rise or fall.

  • Directly or indirectly fixing other transaction conditions effected at the same stage or different stages of the economic process.

  • Limiting or controlling production, distribution, technical development or investments.

  • Sharing markets or sources of supply.

  • Systematically or occasionally applying discriminatory pricing, or other conditions to equivalent transactions.

  • Directly or indirectly refusing to purchase or sell goods or services.

  • Requiring the acceptance of additional obligations that, by their nature or according to commercial use, have no connection with the subject of the contract.

Practices not listed can still be prohibited if their object or effect is the prevention, or significant distortion or restriction of competition.

Restrictive horizontal agreements such as price-fixing, market allocation, output restrictions and group boycotts are likely to be prohibited.

For vertical arrangements, a favourable assessment largely depends on the existence of a coherent, organised and objective system of distribution as opposed to a set of loose rules and practices. Practices such as resale price maintenance and absolute territorial protection are likely to be prohibited. However, other practices such as exclusive dealing, limited territorial protection and requirement contracts, and limited access to distribution networks, in the context of exclusive and selective distribution agreements, may benefit from exemption (see Question 15).

The Competition Act defines an undertaking very widely, in line with EU case law. It covers any entity exercising an economic activity involving the supply of goods and services in a particular market, irrespective of its legal status or the way it functions. Groups of undertakings are treated as a single undertaking where they make up an economic unit, or maintain ties of interdependence or subordination between themselves.

Undertakings legally charged with the management of services of general economic interest or which act as legal monopolies are subject to the Competition Act, as long as the application of these rules does not impede them from fulfilling their purpose in law or in fact (Article 3(2), Competition Act).

There are no criminal provisions in Portuguese law punishing restrictive practices or agreements.

 
14. Do the regulations only apply to formal agreements or can they apply to informal practices? Are there broad categories of agreements that might violate the law?

The Authority's decision record shows that the Authority uses a wide definition of agreement. Informal practices are therefore likely to be prohibited.

The notion of a concerted practice is similar to that adopted at EU level. A concerted practice is illegal if it:

  • Is distinct from mere parallel market behaviour among competitors.

  • Consists of reciprocal communications to convey information on future market behaviour, so that the inherent uncertainty as to the regular functioning of the market is eliminated, enabling each competitor to anticipate the reaction of other competitors.

Exemptions and exclusions

15. Are there any exemptions? If so, what are the criteria for individual exemption and any applicable block exemptions?

The Authority may carry out a prior analysis of agreements, decisions and practices to grant negative clearance or individual exemptions through a procedure set out in Regulation 9/2005, of 3 February 2005, which was enacted by the Authority under Article 5(2) of the Competition Act.

Prohibited agreements and practices can be exempted if they contribute to improving the production or distribution of goods and services or to promoting technical or economic development (Article 5(1), Competition Act). In a similar way to Article 101(3) of the TFEU, this exemption only applies if the restrictive practices:

  • Offer the users of goods or services a fair part of the benefit of the practices.

  • Do not impose on the undertakings concerned any restrictions that are unnecessary to achieve the above objectives.

  • Do not enable the undertakings to suppress competition in a substantial part of the goods or services market in question.

Agreements or practices are deemed exempted when they satisfy the criteria (other than the need to affect trade between member states) in the EU block exemption regulations. The Authority can, however, withdraw this benefit if a practice has effects in Portugal that are incompatible with the provisions of Article 5(1) of the Competition Act.

 
16. Are there any exclusions? Are there statutes of limitation associated with restrictive agreements and practices?

Exclusions

Restrictive agreements or practices are prohibited only if their object or effect is to appreciably prevent, distort or restrict competition. Therefore, de minimis infringements seem to be excluded.

Statutes of limitation

Infringements to the Competition Act are considered quasi-criminal minor offences (Article 42, Competition Act) (see Question 24). Certain behaviour, such as fraud, extortion, and so on, can also attract full criminal liability.

For restrictive agreements and practices, the limitation period concerning quasi-criminal minor offences is:

  • Three years for (Article 48(1)(a), Competition Act):

    • failure to provide information or the provision of false, inaccurate or incomplete information;

    • failure to co-operate with the Authority or obstructing the exercise of the Authority's investigation powers;

    • unjustified failure by witnesses, experts or representatives of the concerned undertaking(s) or of the complainant(s) to appear in any procedural act for which they were lawfully summoned.

  • Five years for all other infringements (Article 48(1)(b), Competition Act).

A sanction for infringing the Competition Act expires five years from the date corresponding the decision becomes final, except for unjustified failure to appear (see above), in which case the sanction expires three years from the date the corresponding decision becomes final (Article 48(2), Competition Act).

The limitation period can be:

  • Suspended. During suspension the time that has passed before the suspension event is taken into account. The limitation period is suspended during the period in which a procedure:

    • cannot be started or continued due to the lack of legal authorisation;

    • is pending, from the point at which the file is submitted to the Public Prosecutor (because there are suspicions that criminal activity may be involved (see above)) up to the point at which the file is returned to the Authority;

    • is pending, from the point of notification of the court order that carries out the preliminary assessment of an appeal of the Authority's decision that applied the fine, up to the final decision of the appeal.

    A suspension under the second and third of these periods cannot last for more than six months.

  • Interrupted. In this case, the time that has passed before interruption is not considered and a new deadline starts. The statute of limitation is interrupted where:

    • there is communication to the defendant of any order, decision or measure taken against it or, in general, any notification served on the defendant;

    • any evidence collection action, notably searches, is carried out or a request for support from any police authority or from other administrative authority is issued;

    • there is notification of the defendant to exercise the right to be heard or the production of statements by the defendant in exercising that right;

    • the Authority makes a decision to impose a fine.

The procedure always expires if it lasts for a period equivalent to the applicable statute of limitation plus one-half of that period (for example, 4.5 or 7.5 years (see above)).

Notification

17. What are the notification requirements for restrictive agreements and practices?

Notification

There is no requirement to notify agreements, decisions or practices, and it is for the parties to decide whether to notify to obtain an exemption or negative clearance.

Informal guidance/opinion

In principle, the Authority does not provide any informal guidance.

Responsibility for notification

Any undertaking or association of undertakings which is a party to an agreement, decision or practice can file a notification, provided it shows that it has informed the other parties of the filing (Regulation 9/2005).

Relevant authority

Notifications must be filed with the Authority (Regulation 9/2005).

Form of notification

Annex II to Regulation 9/2005 includes an official notification form. This must be submitted with any required documents.

Filing fee

The filing fees are the same as for notifying concentrations (Regulation 9/2005) (see Question 3, Filing fee). If an association of undertakings files the notification, the members of that association are considered the undertakings involved in the concerned practice for the purposes of determining the applicable fee. The fees are reduced by half for requests to renew exemption decisions (see Questions 15 and 20, Investigations on notification). Notification is only effective when the fees are paid (effective date of notification).

Investigations

18. Who can start an investigation into a restrictive agreement or practice?

Regulators

The Authority can start an investigation if, by any means, it becomes aware of a restrictive practice.

Third parties

The Authority can take into account complaints by third parties when deciding whether to start an investigation. When an investigation is started on the basis of a complaint, the Authority must inform the complainant before closing the investigation, giving it a reasonable time to submit representations.

 
19. What rights (if any) does a complainant or other third party have to make representations, access documents or be heard during the course of an investigation?

Representations

Third party complaints can form the basis of an investigation. When an investigation is started on the basis of a complaint, the Authority must inform the complainant before closing the investigation, giving it a reasonable time to submit representations (see Question 18, Third parties and Question 20, Investigations after a complaint or on own initiative).

The Authority can also question third parties or request them to submit documents, or other information, within its powers of investigation (see Question 22).

Document access

During the course of an investigation, the Authority does not, in principle, grant access to documents to the complainant or to other third parties.

Be heard

See above, Representations.

 
20. What are the stages of the investigation and timetable?

Investigations on notification

The procedure for notification and assessment of agreements, decisions or practices is set out in Regulation 9/2005.

The Authority publishes, at the expense of the notifying parties, the essential elements of the request, in two national newspapers within 15 working days from the effective date of notification. Interested third parties then have at least 30 working days to submit observations.

During its investigation, the Authority can request additional relevant information or documents from the notifying undertaking(s) and any public or private entities.

At the end of its investigation, the Authority can declare that the notified practice is:

  • Legal.

  • Exempt (see Question 15). Exemptions are granted for a set period, which can be renewed, and can have conditions or obligations attached.

  • Illegal.

There is no deadline within which the Authority must issue a decision. However, if no decision is issued after 90 working days, the notifying undertaking(s) can request an interim clearance, which the Authority must grant or deny within ten working days of the request. Although it is not clear in Regulation 9/2005, it is likely that this 90-day period will be suspended if the Authority requests additional information.

Decisions declaring legality or an exemption bind the Authority:

  • Within the limits and the contents of the request.

  • As long as the underlying circumstances are not modified.

  • To the extent that they were not based on false or inaccurate information.

Investigations after a complaint or on own initiative

The procedure for investigations of anti-competitive agreements or practices is established primarily in the Competition Act and, on a subsidiary basis, in the general regime for quasi-criminal minor offences. The Authority can start these investigations following a complaint or on its own initiative (see Question 18).

The Authority starts an investigation in which it makes enquiries necessary to identify the practices and their agents. When the investigation is complete, the Authority either:

  • Takes no further action, if there is insufficient evidence of infringement.

  • Starts proceedings by notifying the accused undertakings or associations of undertakings, if there is sufficient evidence of infringement.

There is no established timetable for the investigation. At the end of proceedings, if the Authority finds that an infringement occurred (without prejudice to any criminal liability which may apply) the Authority may take one or more of the following steps:

The Authority can also impose interim measures (see Question 24, Fines).

Whenever an infringement occurs in an area that is subject to sectoral regulation, the Authority consults the corresponding regulatory authority. In addition, before adopting a decision, the Authority will request the opinion of the relevant regulatory authority, the Authority's practice having been to provide that authority with an outline of the projected final decision.

The essential contents of the Authority's decisions are published on its website (see box, The regulatory authority).

 
21. How much information is made publicly available concerning investigations into potentially restrictive agreements or practices? Is any information made automatically confidential and is confidentiality available on request?

Publicity

The essential elements of a request are published after notification (see Question 20, Investigations on notification). Any information that a notifying undertaking believes to be commercially sensitive should be marked as confidential and a justification for its confidentiality provided.

There are no details published for investigations following a complaint or on the Authority's own initiative as the investigation is subject to secrecy rules (see Question 20, Investigations after a complaint or on own initiative).

In addition, the Authority must ensure the protection of the legitimate interests of the undertakings in the non-disclosure of their business secrets.

Automatic confidentiality

See above, Publicity.

Confidentiality on request

See above, Publicity.

 
22. What are the powers (if any) that the relevant regulator has to investigate potentially restrictive agreements or practices?

The Authority has extensive powers of investigation and inspection. It enjoys the same rights and powers and is subject to the same duties as the criminal police authorities. Among other things, it can:

  • Question the legal representatives of the undertakings or associations of undertakings involved. It can also question the legal representatives of other undertakings or associations of undertakings, or any other person whose declaration it deems relevant.

  • Request documents and other information useful or necessary for clarification.

  • Search for, examine, gather, copy or take extracts from written or other documents at the premises of the undertakings or associations of undertakings. This requires a warrant from judicial authorities, which the Authority requests in an application that must be substantiated.

The proceedings that the Authority carries out after opening a formal inquiry must ensure that the parties involved are given a hearing and respect the other principles of the adversarial system. In addition, the Authority must observe the principles that are respected by all Portuguese authorities in the conduct of administrative procedures and investigations (for example, as contained in the Administrative Procedural Code).

If the practice investigated may cause damage that is imminent, serious and irreparable or difficult to rectify, the Authority can, at any time in the investigation or evidence-taking, order the immediate suspension of the practice or take any other provisional measures necessary to immediately re-establish competition, or which are indispensable for the final decision to be effective.

 
23. Can the regulator reach settlements with the parties without reaching an infringement decision? If so, what are the circumstances in which settlements can be reached and the applicable procedure?

The Competition Act does not contain any rule about accepting binding or informal commitments. However, legal doctrine considers that the acceptance of such commitments may be possible, if based on the application of the rules governing the provisional suspension of a criminal procedure.

According to the Authority's website, it has previously closed anti-trust infringement procedures after the parties had offered commitments.

Penalties and enforcement

24. What are the regulator's enforcement powers in relation to a prohibited restrictive agreement or practice?

Orders

If the Authority finds that an anti-trust infringement has occurred, without prejudice to any criminal liability (which can arise from behaviour such as fraud), the Authority can impose on the undertakings concerned:

  • Interim measures.

  • An order to adopt measures necessary to bring the infringement to an end within the required time period.

  • Fines (see below, Fines).

  • Ancillary sanctions.

Ancillary sanctions include the following:

  • Should the infringement be considered sufficiently serious, the Authority can, at the offender's expense, publish the sanctioning decision in the Official Gazette (Diário da República) or in a Portuguese newspaper with national, regional or local circulation, depending on the relevant market (Article 45(1), Competition Act).

  • A specific sanction for competition law infringements in public procurement proceedings. Companies can be prohibited, for a maximum of two years, from participating in proceedings for the award of contracts for (Article 6, Decree-Law No. 18/2008, of 29 January 2008, enacting the Public Procurement Code, and amending Article 45 of the Competition Act):

    • public works;

    • concessions of public works or public services;

    • the lease or acquisition of goods or services by the state;

    • granting of public licences or authorisations.

The Authority can also impose periodic penalty payments of up to 5% of the average daily turnover in Portugal in the preceding financial year for each day of delay in complying with an Authority's decision imposing a sanction or ordering the adoption of certain measures, counted from a date set by a decision (Article 46, Competition Act).

Fines

The Authority can impose fines of up to:

  • 10% of the previous year's turnover in Portugal for each undertaking infringing:

    • Articles 4, 6 and 7 of the Competition Act (see Questions 13 and 27); or

    • a decision ordering interim measures.

  • 1% of the previous year's turnover in Portugal for each infringing undertaking that violates other Competition Act provisions, such as providing false information.

Undertakings that are part of an association subject to a fine or periodic payment are jointly and severally responsible for paying the fine.

The courts can enforce unpaid fines.

Personal liability

Individuals, legal persons, companies and associations without legal personality can be liable for quasi-criminal minor offences in the Competition Act. The same principles of liability apply as for mergers (see Question 9, Failure to notify correctly).

Immunity/leniency

The leniency regime is established by Law no. 39/2006 of 25 August 2006 (Leniency Act).

Impact on agreements

Prohibited agreements are void, unless they can be justified (see Question 15).

Third party damages claims and appeals

25. Can third parties claim damages for losses suffered as a result of a prohibited restrictive agreements or practice? If so, what special procedures or rules (if any) apply? Are class actions possible?

Third party damages

Third parties' claims for damages are dealt with by the general principles and provisions for civil liability in the Civil Code, which require, for standard liability:

  • The existence of illicit behaviour.

  • Injury to the claimant.

  • A causal link between the two.

Special procedure/rules

There are no special procedural rules for third parties' claims for damages, and the general rules in the Code of Civil Procedure apply.

Class actions

It is possible to bring class actions, under which individual litigants or associations can, under certain conditions, sue as representatives of injured parties (Law No. 83/95 of 31 August and Article 26(A), Code of Civil Procedure). These procedures can, in principle, apply to competition law injuries.

 
26. Is there a right of appeal against any decision of the regulator? If so, which decisions, to which body and within which time limits? Are rights of appeal available to third parties, or only to the parties to the agreement or practice?

Rights of appeal and procedure

Law No. 52/2008 of 22 August 2008 (as amended by Law No. 3-B/2010 of 28 April 2010), which implements a comprehensive reform of the organisation and functioning of the judicial courts, amends articles 50, 52, 54 and 55 of the Competition Act, which establish the courts that are competent to handle appeals from decisions adopted by the Authority in both sanctioning and administrative proceedings (see Question 10, Rights of appeal and procedure: Judicial appeals). The new regime has been gradually entering into force since 1 January 2009 and is expected to be fully implemented nationwide by 1 September 2014. S Appeals from such decisions, which are currently exclusively entrusted to the Lisbon Court of Commerce, will under the new regime be brought in the commerce section (juízo de comércio) of the territorially competent court. In the absence of such a section, they will be brought before the commerce section of the Lisbon court. Under the new regime, the Authority’s sanctioning decisions (typically involving anti-competitive agreements, decisions and practices, abuses of economic power and infringements of the merger control rules) may be appealed, under the quasi-criminal minor offences regime, to the competent court. Appeals that refer to decisions applying fines or other penalties will suspend the enforcement of those decisions. The appeals of decisions of the commerce section of the territorially competent court that may be appealed are filed with the Appellate Court of Lisbon, as a court of last resort.

Meanwhile, the creation of a specialised court to handle competition, regulation and supervision matters has been determined by Law No. 46/2011, of 24 June 2011, which will come into effect upon the establishment of the court. The announced creation of such a specialised court to handle competition matters is expected to introduce significant changes to the above judicial review regime, with the new court becoming the exclusive first instance for review of all the decisions adopted by the Competition Authority (see Question 10, Rights of appeal and procedure: Judicial appeals).

Third party rights of appeal

Currently third parties do not have rights of appeal.

 

Monopolies and abuses of market power

Scope of rules

27. Are monopolies and abuses of market power regulated under civil and/or criminal law? If so, what are the substantive provisions and regulatory authority?

In line with Article 102 of the TFEU, the abuse of a dominant position in the national market or a substantial part of it, having as its object or effect the prevention, distortion or restriction of competition, is prohibited (Article 6, Competition Act).

In addition, the abuse of economic dependence is prohibited (Article 7, Competition Act). An abuse of economic dependence is the abusive exploitation by one or more undertakings of the economic dependence of any supplier or client towards such undertaking(s) due to the absence of an equivalent alternative. This is provided the abusive exploitation is likely to affect the market or the competition structure where an undertaking abuses, in a vertical business relationship, its power to determine the rights and obligations of another undertaking (for example, the refusal to sell or buy).

Abuse of economic dependence practices can include (Article 7, Competition Act):

  • Carrying out any of the practices in Article 4(1) of the Competition Act (restrictive concerted practices between undertakings) (Article 6(3)(a), Competition Act) (see Question 13).

  • Totally or partially terminating, without grounds, an existing business relationship taking into account:

    • prior business relationships;

    • accepted usages in the concerned economic sector; and

    • the agreed contractual clauses.

An equivalent alternative is considered to be unavailable when both the (Article 7, Competition Act):

  • Supply of the concerned good or service (notably, its distribution) is made by a restricted number of companies.

  • Company cannot obtain the same conditions from other business partners within a reasonable time period.

 
28. How is dominance/market power determined?

Dominance exists when an undertaking is active in a market in which it faces no significant competition or in which it predominates over its competitors (Article 6(2)(a), Competition Act).

Dominance also exists when two or more undertakings act in concert in a market in which they face no significant competition, or in which they predominate over third parties (Article 6(2)(b), Competition Act).

The Competition Act expressly avoids relating dominance to market shares.

 
29. Are there any broad categories of behaviour that may constitute abusive conduct?

The following actions are considered abusive:

  • Carrying out any of the practices in Article 4(1) of the Competition Act (restrictive concerted practices between undertakings) (Article 6(3)(a), Competition Act) (see Question 13).

  • Refusing, on appropriate payment, to provide another undertaking with access to an essential network or other infrastructure which the first party controls, when, without access, the second party cannot operate as a competitor of the first party for factual or legal reasons, either in the upstream or downstream market (Article 6(3)(b), Competition Act). This is not abusive if the dominant undertaking demonstrates that, for operational or other reasons, access is not reasonably possible.

Exemptions and exclusions

30. Are there any exemptions or exclusions?

There are no exemptions. However, undertakings legally charged with the management of services of general economic interest or which act as legal monopolies are only subject to the Competition Act if the application of its rules does not impede them from fulfilling their purpose in law or in fact (Article 3(2), Competition Act).

Notification

31. Is it necessary (or, if not necessary, possible/advisable) to notify the conduct to obtain clearance or (formal or informal) guidance from the regulator? If so, what is the applicable procedure?

Pre-notification guidance on an abuse of a dominant position or of economic dependence is not, in principle, available.

Investigations

32. What (if any) procedural differences are there between investigations into monopolies and abuses of market power and investigations into restrictive agreements and practices?

These are similar to those for restrictive agreements and practices (see Questions 18, 20, 21 and 23).

 
33. What are the regulator's powers of investigation?

This is the same as for restrictive agreements and practices (see Question 22).

Penalties and enforcement

34. What are the penalties for abuse of market power and what orders can the regulator make?

This is the same as for restrictive agreements and practices (see Question 24).

Third party damages claims

35. Can third parties claim damages for losses suffered as a result of abuse of market power? If so, what special procedures or rules (if any) apply? Are class actions possible?

This is the same as for restrictive agreements and practices (see Question 25).

 

EU law

36. Are there any differences between the powers of the national regulatory authority(ies) and courts in relation to cases dealt with under Article 101 and/or Article 102 of the TFEU, and those dealt with only under national law?

The Authority has a general power to impose sanctions to enforce the EU competition regime (Article 42, Competition Act).

Although the Authority has the same powers of investigation as for national infringements, there are no specific provisions under the Competition Act, or in any other legislation, detailing the actual sanctions for infringements of EU law. Without such provisions, the Authority cannot impose any penal or quasi-criminal sanctions, such as fines, for specific infringements of EU law. The Authority overcomes this difficulty by punishing infringements on the basis of breach of both national and EU rules.

In relation to third party claims, there are no differences between Articles 101 or 102 of the TFEU and national law (see Question 25).

 

Joint ventures

37. How are joint ventures analysed under competition law?

The only specific reference to joint ventures is in the merger control rules (see Questions 1 to 12). Otherwise, the general competition regime applies.

 

Inter-agency co-operation

38. Does the regulatory authority in your jurisdiction co-operate with regulatory authorities in other jurisdictions in relation to infringements of competition law? If so, what is the legal basis for and extent of co-operation (in particular, in relation to the exchange of information)?

The Authority is responsible for establishing co-operation relations with foreign competition authorities, EU and international competition bodies (Article 6(1)(d), Authority bye-laws). The Authority is a member of the European Competition Network and the International Competition Network among others.

 

Proposals for reform

39. Are there any proposals for reform of competition law?

For some time there have been rumours that the Competition Act is to be replaced by a new Act or, at least, substantially revised. In addition, in the context of the granting of financial assistance to Portugal, the memorandum of understanding signed by the Portuguese Republic, on the one side, and the International Monetary Fund, the European Commission and the European Central Bank on the other imposes several changes to be introduced into Portuguese competition policy.

A draft law proposal has now been posted on the Ministry of Economy website for public discussion purposes. According to this proposal, the changes to the law will address substantive and procedural issues raised by the current Competition Act, which have been the subject of debate among law enforcers and practitioners. In particular, among many other amendments, the Authority will have broader investigation powers notably in respect of the collection of evidence in proceedings concerning anti-competitive practices, including cartels and abuses of dominant position.

 

The regulatory authority

Competition Authority (Autoridade da Concorrência) (Authority)

Head. Manuel Sebastião

Contact details. Avenida de Berna, 19
1050-037 Lisbon
Portugal
T +351 21 790 20 00
F +351 21 790 20 99
E adc@concorrencia.pt
W www.concorrencia.pt

Outline structure. The Authority comprises two bodies:

  • The Council (Conselho). This is the highest body of the Authority and is responsible for enforcing competition law and managing the Authority's services. It consists of a Chairman and two or four other members, appointed by the Council of Ministers on a proposal by the member of government responsible for economic affairs, under a hearing of the members of government responsible for finance and justice affairs.

  • The Sole Supervisor (Fiscal Único). The Sole Supervisor is responsible for the legal and economic control of the Authority's asset and financial management. It also advises the Council. The Sole Supervisor is a chartered accountant or a chartered accountant's firm appointed by a joint decision of the members of government responsible for finance and economy, on the previous opinion of the Council.

Responsibilities. The Authority's responsibilities include:

  • Ensuring compliance with competition rules and regulations.

  • Implementing practices to promote competition and develop a competition culture among economic operators and the public in general.

  • Establishing guidelines for competition policy.

  • Keeping in contact with other countries' competition authorities and establishing co-operation links with them and with EU and international authorities.

  • Promoting research in competition law.

  • Participating in the improvement of Portuguese law in all areas where competition may be affected.

  • Carrying out the tasks conferred on EU member states' administrative authorities by EU competition law.

  • Ensuring that Portugal is represented in EU or international institutions in competition matters.

The Authority's responsibilities in regulated sectors must be carried out in co-operation with the relevant regulatory authorities.

Procedure for obtaining documents. There are no specific rules for obtaining documents from the Authority and the provisions of the Code of Administration apply. Generally, any private party can access proceedings which they are directly interested in. This includes access to information which is not classified (including information deemed classified by the parties) and which does not contain trade or industrial secrets, or secrets related to scientific, artistic or literary ownership rights. People who can prove a legitimate interest in the requested information can also have access.


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