PORTUGAL: An Introduction to Competition/European Law

Economic Overview and Legislative Developments 

In 2023, the Portuguese economy is poised to achieve a growth rate of 2.2%, while the inflation rate is expected to reach 5.5%. Portugal’s economic growth started strong in 2023 but slowed down significantly in Q2 due to a contraction in private consumption and investment, caused by an increase in interest rates and weak consumer and business sentiments. Exports of goods declined, while exports of services continued to expand, mainly due to tourism. In Q3, there was a further contraction in GDP.

Over the past 12 months, there have been no major legislative developments in Portugal, which is not surprising considering that in the last quarter of 2022 important changes to the Portuguese Competition Act came into effect, including the transposition of the ECN+ Directive.

The investigative and sanctioning activities of the Portuguese Competition Authority (PCA) in 2023 have apparently slowed down compared to previous years. Two ground-breaking judgments from the Portuguese Constitutional Court (PCC) declaring that searches and seizures of emails by the PCA based on a warrant issued by the public prosecutor and not by a criminal judge violate the Portuguese Constitution are the likely reason for this slowdown. While the concrete consequences of these rulings are still under debate, they are of significant importance for Portuguese competition law policy and enforcement, since more than 20 antitrust cases have relied on emails seized based on warrants issued by the public prosecutor.

PCA Action 

The PCA has set as priorities for 2024, inter alia: (i) the detection and sanctioning of abusive conduct and cartels; (ii) following developments related to the digital transition; and (iii) fighting gun-jumping practices.

A limited number of investigations starting in 2023 are publicly known: a new investigation related to collusion in the health sector (adding to several others pending or terminated since 2020), and two others related to alleged price-fixing practices by associations of undertakings in the provision of audio-visual services and the provision of condominium management and administration services. The latter two led to the adoption of a statement of objections still in 2023. While the investigation started at the end of 2022, the PCA adopted another statement of objections in 2023, accusing a healthy food supplier of fixing and imposing consumer resale prices on its distributors. Also, while the PCA launched an investigation in the distribution and food sector regarding the definition of resale prices from a salt supplier, it concluded that the elements gathered during the investigation were not sufficient to adopt a sanctioning decision and closed the case.

Finally, two sanctioning decisions were adopted, resulting in fines totalling almost EUR19 million (a significant decrease when compared to previous years). The first was against Cabelte and Solidal (and its subsidiary Quintas & Quintas) for alleged bid rigging in public tenders launched by REN, a company responsible, inter alia, for the transmission of very high voltage electricity and gas, and the overall technical management of the electricity system and of the natural gas system. The case was settled with a discounted fine imposed on both companies. The second decision, leading to a total fine of EUR16.9 million was issued against a set of retailers (Auchan, Modelo Continente and Pingo Doce) and supplier JNTL Consumer Health for alleged hub-and-spoke practices. This is one of the many hub-and-spoke cases that the PCA has been dealing with during the past few years and which have already reached fines exceeding EUR700 million.

Merger Control 

By reference to 2023 and until the first half of December, the PCA received 78 merger control filings – a slight increase when compared to the same period in the previous year – and adopted 72 clearance decisions, five decisions of inapplicability and one extinction decision (a Phase II merger that started in 2022 and was ultimately withdrawn by the parties).

Although merger control filings are generally simple, the PCA has been presented with a couple of complex cases, having opened one in-depth investigation over the course of the year, related to the acquisition of mobile telecom operator Nowo by Vodafone, notified in 2022 and which was still under scrutiny at the end of 2023. Likewise, the acquisition of Mondelez Global LLC by Perfetti Van Melle Group BV warranted a Phase I clearance decision, subject to commitments.

The PCA continues to prioritise the detection and investigation of gun-jumping cases. In December 2023, it issued a decision against LusoPlex for implementing a transaction before the required filing and clearance decision, applying a fine of EUR75,000. The company settled the case. Also important in this regard is the Portuguese Competition Court decision on the appeal of Santa Casa da Misericórdia de Lisboa (SCML) against the EUR2.5 million fine for gun-jumping (the highest fine ever applied in this area). The Court significantly reduced the fine to a mere EUR160,000 (which corresponds to a reduction of almost 94%).

Judicial Action 

The last few years have been characterised by intense judicial activity in the Competition Court (and Lisbon Court of Appeals), leading to several preliminary ruling requests to the European Court of Justice.

The Competition Court quashed a PCA decision in the insurance sector, making 2023 a landmark year. Zurich Insurance Plc and Lusitania saw their appeals upheld against an infringement decision of the PCA that applied a total fine of EUR54 million for alleged price-fixing and market-sharing practices. This was the first full annulment decision since the creation of this specialised court in 2012 and the first hybrid settlement case in Portugal in connection with leniency applications and settlements.

The Lisbon Court of Appeal confirmed the EUR24 million fine imposed by the PCA against Portuguese beverage supplier Super Bock and two officials of the company for fixing minimum resale prices and other commercial conditions of beverages in hotels, restaurants and cafes. This case was the origin of the preliminary ruling Case C-211/22 Super Bock on the concept of “by object” restriction of competition on RPM conduct. Likewise, the Lisbon Court of Appeal confirmed the PCA’s abuse of dominance decision against energy company EDP Produção. The PCA originally applied a fine of EUR48 million, which was reduced to EUR40 million by the Competition Court and now confirmed by the Lisbon Court of Appeal.

Private enforcement of competition law continues to grow in Portugal. In 2023, the Lisbon Court of Appeal confirmed a pre-filing discovery ordering Meliá to provide access to evidence reportedly necessary for the preparation of a follow-on damage action related to the European Commission’s decision in the Holiday Pricing case (AT.40528). Additionally, the Competition Court issued another decision in the context of follow-on damage actions related to the European Commission’s decision in the Trucks case (AT.39824). Indeed, adding to last year’s decision ordering DAF Trucks to pay almost EUR13,000, Renault Trucks was ordered by the Court of Appeal to pay EUR60,000 to a claimant in compensation for damages (representing a 50% reduction of the initial amount ordered by the Competition Court). Further rulings are expected, particularly in the context of the Trucks case, which are likely to provide insights on the approach of the Competition Court and of the Lisbon Court of Appeal to other cases.

State Aid 

With the view of mitigating the economic effects of armed conflict in Ukraine, the European Commission approved two state aid schemes notified by Portugal under the Temporary Crisis Framework (TCF): one in the agricultural sector and the other to ensure liquidity to companies in the Autonomous Region of Madeira. Additionally, and still related to the Russia-Ukraine war and its impact in the energy sector, the European Commission approved the prolongation until the end of 2023 of the MIBEL fossil-fuel cost adjustment mechanism, which aims to control the rise in energy prices on the Iberian market. Overall, 2023 saw much less intervention of the Portuguese State in the economy in terms of state aid, at least when compared with the 2020–22 period, mainly due to the end of the COVID-19 pandemic.