Chambers Practice Area Overview 2019 – Competition/European Law
In 2018, the Portuguese economy continued to expand at a strong pace, with growth reaching pre-financial crisis levels.
Although merger filings have seen a slight decrease in 2018, their annual number is still equivalent to pre-crisis levels.The Portuguese Competition Authority (PCA) had established as one of its priorities for 2018 the reinforcement of swift and efficient merger procedures to benefit businesses and the economy. As a result, only a very small number of mergers filed in 2018 raised significant competition law issues.
The most relevant development with respect to merger control in 2018 was the PCA’s intention to prohibit the acquisition of Media Capital by MEO (Altice Group) before the latter eventually decided to withdraw the notification. The notifying party MEO had offered commitments during the procedure that were, however, deemed insufficient and inadequate to overcome the competition concerns identified by the PCA.
In her second year as president of the PCA, the economist Margarida Matos Rosa has maintained the agency’s enforcement activity against illegal practices. The effective and speedy fight against cartels continues to be one of the agency’s top priorities under her presidency.
In the context of these enforcement efforts, in 2018 the PCA carried out dawn raids at seven associations, including those in the advertising, telecoms and retail food sectors. However, the number of dawn raids carried out in 2018 was significantly lower than in the previous year when 36 companies had been raided.In the course of 2018, the PCA issued statements of objections in several antitrust proceedings, including against brewing company Super Bock for alleged price fixing of beverages in hotels, restaurants and cafes, against five insurance companies for alleged price fixing and market sharing arrangements, against EDP Produção for alleged abuse of dominance and against five railway maintenance companies for allegedly taking part in a cartel in public tenders to provide railway maintenance services.
The only two instances in which fines were applied in 2018 concerned settlement procedures in two of the abovementioned cases. In the context of the ongoing investigation into the insurance sector, the total fines imposed on insurers Fidelidade and Multicare amounted to €12 million. Furthermore, the PCA fined one of the railway maintenance providers €365,400 for allegedly participating in the railway maintenance cartel.
The only case in which commitments were offered in 2018 concerned the investigation of the PCA that revealed the existence of a number of obstacles to the development of effective competition in the market for standard postal services relating to access to CTT’s (the incumbent company in the postal services market in Portugal) standard post delivery network. CTT offered a set of commitments to address the antitrust concerns raised by the PCA, which were accepted and led the agency to close the investigation without imposing sanctions.
In the course of 2018, the PCA also issued a report, at the request of the Portuguese Government, in which it analysed the road fuel sector. The PCA identified a high degree of concentration in this sector and the existence of barriers to entry in the refining and storage activities, as well as the failure to implement the measures recommended by the PCA for sub-concession contracts of service stations on motorways, especially with respect to award procedures and the length of contracts.
Furthermore, the PCA published the Issues Paper “Technological Innovation and Competition in the Financial Sector in Portugal” in which it identifies barriers to entry of new firms based on innovative technologies applied to the financial sector – known as FinTech – in Portugal. These barriers relate principally to the regulatory framework and the risk of market foreclosure of FinTech entrants by incumbent banks.
The PCA has also recently presented its conclusions of the study on the ports sector in which it recommends that the Portuguese Government and port authorities adopt measures to promote competition in the market for port terminal concessions, the liberalisation of market access for towing and piloting services and the redefinition of the port governance model.
In light of its mission to contribute to the consolidation of a competition culture in Portugal, the PCA carried out a number of events to promote good practices to detect collusion and to encourage efficiency in public procurement. These initiatives are part of the campaign on fighting bid-rigging in public procurement that was launched in 2016 and which the agency has followed up on in the current year.
The PCA has hosted the Fifth Lisbon Conference on Competition Law and Economics, which took place in Lisbon on 18 and 19 October 2018. It brought together 300 participants from over 30 countries to discuss issues such as the role of competition policy in today’s world, innovation in merger control, the impact of digitalisation on competition, mergers in media markets, competition and innovation in financial services and excessive pricing.
On the legislative front, Law No. 23/2018 (“the Private Enforcement Act”), establishing the legal framework of actions for damages arising from competition law infringements, was published on 5 June 2018, implementing the EU Private Enforcement Directive (2014/104/EU) into Portuguese law. The aim of this new legislation is to make it easier for injured parties to bring civil liability actions against companies that infringe competition law, thus enhancing the private enforcement of competition law.
By Ricardo Oliveira and Joana Schmid Moura