The European Antitrust Review 2014 • Section 3: Country chapters
Portugal: Competition Authority
In the first half of 2013, the Portuguese Competition Authority (PCA) pursued a two-pronged policy: to continue to deliver sound enforcement and advocacy work in the fulfilment of its mission; and to get ready for the handover of board responsibilities, as the five-year mandate of the current board of directors ended in late March and the new board will be appointed in the near future.
The PCA’s enforcement and advocacy work started reaping the benefits of the two major reforms of Portugal’s competition framework already concluded: first, the new Portuguese Competition Act, in force since July 2012, and the complementary regulations and guidelines approved by the PCA in early 2013; and second, the new specialised Competition, Regulation and Supervision Court of first instance, which started operating in May 2012.
A third major reform is in the pipeline and will enter into force in the second half of 2013. This is the new institutional setup, which will apply to the PCA under the new Framework Law for Regulatory Authorities and the new PCA by-laws. Both are instrumental in complementing the independence of the PCA on competition issues with full autonomy in administrative and financial matters within the annual budget approved by the government.
The PCA has been a key player in this reform agenda and has decisively contributed to underpinning the foundations of its future work and to providing the right conditions – specifically through its regulations and guidelines – to facilitate the scrutiny of its proceedings and gauge its performance.
The handover of board responsibilities will be seamless. The institution building of the last five years and the relentless pursuit of case work in the first half of 2013 have created no backlog and no void that needs to be addressed by the new board. Instead, as the Global Competition Review so rightly stated in its 2012 rating of the Authority, the new board will inherit a ‘progressive legacy’ and ‘can come in and hit the ground running’.
As in any knowledge-based organisation with sanctioning, supervisory and regulatory powers, the new board, its management appointments and its capacity to recruit, retain and motivate the staff will decisively shape the future course of the organisation and its performance.
The highlight of the antitrust activity in the first half of 2013 was the dawn raid on 15 banks in 25 different office locations in early March, to gather further evidence of any exchange of commercially sensitive information between the banks involved. It was the biggest dawn raid ever carried out in Portugal and the first under the new Competition Act, which was instrumental in making the search and seizure of relevant paper-based and digital information possible, thus ensuring the effectiveness of the raid.
The antitrust activity was further marked by the opening of four cases in four different sectors (telecommunications, TV contents, rail transportation and pharmaceuticals), five cases closed with no finding of an infringement and three condemnations (a resale price maintenance online business case, an abuse of dominance case and a cartel case). Handling antitrust cases has been made more transparent and predictable under the new PCA leniency regulation and three guidelines (on the method of setting fines, priorities in the exercise of sanctioning powers, and procedures for application of articles 9, 10 and 11 of the new Portuguese Competition Act and the corresponding articles 101 and 102 of the TFEU).
On merger control, the PCA cleared 23 merger notifications, one of which had remedies imposed in the second phase. Two major merger notifications in the telecommunications sector are now under review. Further to this, merger control now benefits from the new PCA regulation on the notification form and guidelines on prior appraisal. Very soon it will also benefit from new guidelines on the economic analysis of horizontal mergers.
On judicial review, two important rulings in support of PCA decisions on appeal were issued in the first half of 2013. In late February, the Court of Justice of the European Union issued a preliminary ruling confirming the PCA decision on the professional association of chartered accountants. The court ruled that the fact that a professional association is required by law to put into place a system of compulsory training that partially eliminates competition and lays down discriminatory conditions to the detriment of its competitors does not remove the rules adopted by the association from the scope of EU law. In early April, the Appellate Court of Lisbon, the court of second instance, upheld the PCA decision to impose a fine on the association of parking firms in Portugal for issuing a recommendation to its associates on price increases and confirmed the amount of the fine.
In June, the PCA has issued another innovative market study, this time on digital terrestrial television (DTT). As usual, it includes a number of sensible recommendations, geared to further exploiting the technical capabilities of this infrastructure, specifically through more free-to-air and high-definition channels, as well as to enhancing competition in free-to-air channels, pay TV, and services made available through pay-per-view.
In conclusion, the PCA performance on competition enforcement and advocacy in the first half of 2013 fits well into the main thrust underpinning the policies of the previous five years: forceful antitrust action with improved due process; swift, objective, predictable merger control; vigorous defence of its decisions in court; top quality, in-depth, innovative market studies; and systematic follow up of international commitments in the European Union and beyond. Key drivers for performance improvement are well identified and the new board will continue to build up the institution by making such drivers the guiding force behind consolidation of past achievements, thus serving as a springboard for a great leap forward in the years ahead.
Next Chapter: Portugal: Overview