In 2015, and continuing into 2016, the Portuguese Competition Authority (PCA) developed an intense activity promoting effective competition in the markets for the benefit of consumers, by combining vigorous enforcement and active advocacy initiatives.
Building a solid enforcement record
The PCA focused its enforcement action on the fight against cartels and other harmful agreements and practices for competition, making ample use of the new procedural tools introduced by the 2012 Competition Act, such as settlements and commitments.
In 2015 and the first months of 2016, there was a significant increase in the number of antitrust decisions and the total fines imposed amounted to €20.5 million. The PCA applied two of its largest fines ever since 2003, in the energy and pharmaceutical sectors.
In this period, the PCA issued four sanctioning decisions and five commitment decisions. Of the four sanctioning decisions, the PCA used the settlement procedure in two of the cases, in a bid-rigging cartel case in the construction sector and a cartel regarding office supplies. Moreover, the PCA sanctioned vertical restraints in the bottled liquefied petroleum gas (LPG) market, and an abuse of dominance in the pharmacies’ commercial data sector. The PCA’s LPG decision has already been confirmed by the Competition, Supervision and Regulation Court (first instance). The five commitment decisions focused on vertical restraints in the motor vehicles sector (car warranties) and football media rights, delivering immediate results for the better functioning of competition in the market.
Currently the PCA is pursuing further investigations, and has carried out dawn raids targeting 27 different locations in four cases regarding anticompetitive practices in the port sector, financial sector and office consumables.
Finally, in 2015 and the first months of 2016, the PCA issued three decisions for the non-provision of information or the provision of false, inaccurate or incomplete information in response to a request for information, imposing fines to three undertakings totalling €400,000.
In the field of merger control, in 2015, there was an increase of almost 40 per cent in the number of notifications, which indicates the growing dynamism of the Portuguese economy. This trend is confirmed by the fact that purely domestic mergers correspond to
59 per cent of the decisions taken during 2015, which also represents a significant increase compared to 28 per cent in 2014. In 2016, a similar number of merger notifications is expected, according to statistics thus far. In 2015–2016, the PCA issued three clearance decisions with commitments in the energy and maritime transport sectors, and two mergers were withdrawn following competition concerns identified in the Phase II decision or draft decision regarding online platforms for classified ads and auctions and outdoor advertising.
In 2015–2016, the review courts confirmed the vast majority of the PCA’s decisions. This is a visible result of our continuous effort to improve the quality of the decisions, both in terms of due process and substantive analysis.
Reaching out to key stakeholders
Strong enforcement and advocacy are mutually reinforcing. In our pursuit to enhance compliance and build a competition culture in Portugal, the PCA has engaged in advocacy initiatives to foster awareness among stakeholders and the wider public of the benefits of competition for economic growth, innovation and competitiveness.
In October 2015, the PCA organised the IV Lisbon Conference on Law and Economics of Competition, the most significant competition event in Portugal. The conference attracted over 300 participants and gathered internationally renowned speakers from the European Commission, the OECD, nine different jurisdictions in Europe, Africa and Asia, academia and corporations (Google and Uber), as well as practitioners from major law and economic consulting firms.
In 2016, the PCA will continue its outreach activities towards businesses, focusing on two key topics: the leniency programme and business associations.
The PCA will organise workshops and widespread mailing campaigns to increase awareness among the business community on the advantages and functioning of its leniency programme.
A second advocacy initiative is the publication of the PCA’s Guide on the Promotion of Competition for Business Associations. Following the publication of the Guide, the PCA will partner with business associations to reach out to them by way of presentations on the main competition issues relevant to business associations.
The objective of both initiatives is to provide information and guidance to companies, promote transparency and legal certainty, as well as further encourage complaints and leniency applications.
Competition impact assessment project
Since 2013, one of the PCA’s priorities has been the assessment of public policies, promoting a competition-friendly regulatory framework in Portugal.
In 2015 and the first months of 2016, the PCA issued over 20 opinions and recommendations of competition impact assessment, working closely with the government, parliament and other public and private entities. The opinions and recommendations covered a significant number of areas such as energy, telecommunications, environment, liberal professions and public procurement.
In 2016, the PCA initiated a competition impact assessment project, in which it will establish a partnership with the OECD. Under the joint project with the OECD, restrictions on competition in laws and regulations affecting two economic sectors will be assessed, using the OECD Competition Assessment Toolkit. The project will also allow the PCA to consolidate expertise on tools, and methods on competition impact assessment.
Enhancing competition in public procurement: bid rigging and efficiency
One of the main priorities of the PCA is to foster competition in public procurement. The PCA’s Strategic Action Plan for Public Procurement is based on three interrelated cornerstones: fighting bid rigging, promoting efficiency and aligning incentives with public bodies carrying procurement. The Strategic Plan combines enforcement actions and advocacy initiatives.
In December 2015, the PCA published Guidelines on Fighting Collusion in Public Procurement which are primarily addressed to public procurement agents, and aim to assist them in the detection of bid rigging. Moreover, the Guidelines include best practices for tender design to prevent that type of behaviour, and to promote efficiency in the allocation of public funds. In 2016, the PCA will organise a conference and workshops for public procurement officials on fighting bid rigging, in collaboration with other public institutions.
As a means to promote its ex officio agenda, the PCA continued to work with public institutions to collect public procurement data and to develop the analysis of electronic public procurement databases with the aid of screens. The PCA is also involved in interinstitutional dialogue to improve efficiency in public procurement in Portugal.
Fostering private enforcement in Portugal
In 2016, the PCA will conclude its draft legislative proposal to transpose Directive 2014/104/EU on Antitrust Damages Actions into national law. The PCA has been entrusted by the government to take the lead in this process, and has been carrying out the transposition process in an open and transparent manner, engaging directly with key stakeholders. A working group of external experts, comprised of representatives from the judiciary, academia and private practice, has been set up and functioned as a sounding board on the ongoing legislative work. Moreover, a workshop and public consultation on the draft were organised to ensure ample participation in the process. Once the public consultation is completed, the draft bill will be submitted to the government.
The transposition of the Damages Directive will be key in establishing an enabling legal environment and achieving the appropriate balance between public and private enforcement to ensure an effective competition policy and promote compliance.
The PCA is pursuing a strategy to reinforce its enforcement action and develop a wide range of competition advocacy initiatives. The main enforcement priority will continue to be the fight against cartels, by strengthening the leniency programme, and the ability to detect infringements ex officio. The PCA will also focus on public procurement, and competition impact assessment, among other priorities. Another important project for 2017 will be the organisation of the International Competition Network (ICN) Annual Conference in Portugal.
The robustness of our cases, which are systematically confirmed by courts, and the success of our outreach efforts have contributed to an increased relevance of competition policy in Portugal. As an overarching priority, the PCA will continue to reinforce transparency and interaction with stakeholders.