Portugal: Competition Authority


In summary

This article focuses on the assessment of the Portuguese Competition Authority’s (AdC) 2019 results, in terms of its enforcement and advocacy activity, and highlights of the priorities for 2020. The article covers competition enforcement, the consolidation of practices and procedures through strengthened checks and balances, and the importance of a high rate of success in judicial review. It also addresses the AdC’s main advocacy initiatives, including combating bid rigging in public procurement, the engagement of stakeholders from wider circles in debating competition policy, and the AdC’s international activity.


Discussion points

  • Unprecedented year in competition enforcement, with the AdC imposing a total of €340.2 million euros in fines in seven sanctioning decisions, exceeding the cumulated amount of fines applied since the AdC’s inception in 2003.
  • Increased litigation, but also a by-and-large successful judicial review. The courts ruled in favour of the AdC in 79 of the 93 rulings on AdC’s decisions (ie, a success rate of nearly 85 per cent. This reflects the consolidation of internal checks and balances for legal and economic robustness from an early stage of the case and throughout the investigation.
  • Engaging stakeholders from wider circles in competition policy through various initiatives, including open seminars with competition experts, the podcast series CompCast – Competitions Talks, the second edition of the AdC Competition Policy Award and the Combating Big Rigging in Public Procurement initiative.
  • Maintaining the AdC’s vigorous international activity, by promoting bilateral and multilateral cooperation and participating as an active member of various international forums.
  • AdC’s priorities for 2020, focusing on combating cartels and launching a cross-departmental digital task force, and a widely acknowledged issues paper on digital ecosystems, big data and algorithms.

In 2019, the Portuguese Competition Authority (Autoridade da Concorrência (AdC)) experienced a remarkable year in terms of enforcement activity, which brings the agency to a new threshold of deterrence and effectiveness in accomplishing its mission. In 2020, the AdC is maintaining its focus on a strong enforcement and on an intense set of initiatives to bring down legislative barriers, to the benefit of citizens. Finally, a digital task force was launched to keep the agency’s decisions efficient in the context of a growing digitalisation of economic sectors.

Unprecedented year in competition enforcement

As a result of a strong prioritisation of enforcement in antitrust practices, the AdC recorded historic year-level fines of €340.2 million. This single-handedly exceeded the cumulated amount of fines the AdC had applied since its inception, in 2003. During 2019, the AdC’s seven sanctioning decisions included concerted practices of exchanging sensitive commercial data between 14 banks, a cartel in railway maintenance, a cartel in the insurance sector, an abuse of dominant position in the energy sector and retail price maintenance in food retail distribution. Moreover, the AdC accepted commitments in one decision involving the bakery sector, which brought the total involving anticompetitive practices to eight decisions in 2019.

In the energy sector, the AdC concluded that incumbent EDP – Gestão da Produção de Energia, SA (EDP) abused its dominant position by withholding its hydro generation plants (which had their income guaranteed through a stranded costs recovery mechanism) from the hourly secondary reserve auctions and replaced them with other EDP-owned power plants.

In cartels, a main priority for the agency, we highlight the case relating to railway maintenance because it was detected through the AdC’s outreach initiative on combating bid rigging in public procurement. Additionally, three of the four decisions in this cartel were settlement decisions. The procedure continues to yield efficient and effective results for the parties involved, including the AdC, as it can more swiftly open new cases. Moreover, unannounced inspections were carried out in the health, waste management and private surveillance sectors. Finally, five statements of objections were issued for cases of cartels, vertical restraints and abuse of dominance, in sectors that include telecommunications, advertising and food retail. Covering a wider range of sectors, particularly those that have a significant effect on consumers’ welfare, is an important criterion for the AdC’s enforcement activity.

In merger review, beyond a regular flow of Phase I decisions, the AdC addressed two in-depth merger procedures. These in-depth reviews culminated in both a decision to close the procedure (9/2019, Fidelidade) and a decision of non-opposition to the merger (45/2018, HPA). In particular, the decision to close the procedure was taken because the parties abandoned the planned merger during the in-depth investigation.

Still in merger review, the AdC has kept the detection of gun-jumping among its priorities. Six investigations were opened, resulting in one statement of objections in 2019 and one settlement decision in 2020.

Overall, the AdC issued 59 merger decisions – 57 final decisions in Phase I and two final decisions in Phase II.

Increased litigation and success in judicial review

As a corollary to the heightened enforcement activity of recent years, the AdC has dealt with a constant increase in litigation. This refers to the AdC’s decisions regarding access to files, confidentiality, the legality of search and seizure orders, the gathering of digital evidence, legal professional privilege, withdrawal of evidence, effects of an appeal and, more generally, rights of defence.

The courts issued 93 rulings in 2019 on the AdC’s decisions, of which 79 were favourable to the agency (ie, a success rate of nearly 85 per cent). Such an intense judicial review has had the benefit of enhancing the legal robustness of the AdC’s procedures.

The Constitutional Court handed down a judgment in 2019 that harmonised and unified case law regarding the effects of an appeal. The Court concluded that the rule of the Competition Act according to which judicial appeals do not suspend AdC decisions imposing fines or other sanctions does not breach the Constitution.

Promoting effective and fair competition

In 2019, the AdC published an issues paper on digital ecosystems, big data and algorithms with the aim of promoting firms’ compliant behaviour. The paper called for a discussion of the effects of digitalisation on competition. It addressed, for example, barriers to firms’ entry to, and growth in, digital markets, and the risks of collusive behaviour between firms through algorithms. The latter part brought a very insightful contribution to the international debate on algorithmic collusion, which continues to be enhanced at the AdC. Following the issues paper, the AdC established a digital task force to strengthen internal expertise on digital issues linked to competition law and policy.

Advocacy has continued to be a strong feature at the AdC, with the agency seeking to enhance the number of opinions and recommendations issued in an ever larger number of areas. These included transportation, e-commerce, pharmaceuticals, energy and telecommunications. The latter include much-debated recommendations on loyalty clauses and their effect on (lack of) consumer switching.

In other advocacy initiatives, the AdC sought to improve the implementation rate of the recommendations issued in 2018 for more than a dozen liberal professions and the transportation sector (eg, road and maritime transport), all in the context of the joint AdC–OECD Competition Impact Assessment Project. This set of recommendations is estimated to result in €380 million in savings for the Portuguese economy per year.

Finally, with the aim of reinforcing institutional cooperation with sector regulators, the AdC held seminars with the media authority, and the water and waste services authority, bringing to 10 the total number of competition seminars organised with sector regulators since 2017.

Engaging stakeholders, raising awareness for competition policy and maintaining an international contribution

The AdC maintained a series of open initiatives in 2019, the aim of which is engaging with wider circles of stakeholders, from practitioners to students, policymakers and sector regulators. Throughout the year, it held 10 open seminars with academia, competition enforcement and the courts (given by Luís Cabral, Ariel Ezrachi, Alexandre Cordeiro, Carla Farinhas, Thomas Hoehn, Amelia Fletcher, Wouter Wils, Adalberto Cawaia, Jacques Crémer and Stefan Hunt). The AdC also continued its podcast series, CompCast – Competition Talks, which are short talks given by economics and legal competition experts.

Moreover, the AdC gave its second Competition Policy Award in 2019. The award seeks to encourage research in competition law and economics at an international level. The awarded paper on competition law focused on the regulation of online platforms.

The AdC also enhanced its Combating Big Rigging in Public Procurement initiative, which raises awareness of the signs of collusive behaviour in public procurement. The initiative has reached more than 2,300 participants since inception and, in 2019, it reached out to municipalities and the autonomous regions in Portugal. Other initiatives include the AdC’s Guide for Business Associations, which lays out the do’s and dont’s of competition policy.

Finally, in 2019, and in line with its commitment to transparency, the AdC launched a new online search tool for its antitrust decisions (PesquisAdC). The tool will be further enhanced in 2020 with judicial and merger decisions.

In what concerns the international scene, the AdC kept its role as liaison between the International Competition Network (ICN) and the Competition Committee of the OECD. Further, it is a constantly active member in the various international forums. The agency also maintains a close link with the Lusophone Competition Network, having promoted two meetings in 2019. The eighth bilateral meeting was held with the Competition Authority of Spain (the CNMC) and the AdC signed a cooperation agreement with the Moroccan Competition Council. Moreover, the AdC was appointed as a member of the ICN’s Steering Group for the period 2019 to 2021.

Priorities for 2020

Given the positive momentum created in recent years by the strategy in strengthening enforcement, the AdC’s priorities will remain stable. The agency will maintain as its priority a vigorous detection, investigation and sanctioning of practices that distort the functioning of markets, with a particular focus on cartels. In that context, special focus will be given to those that have the greatest effect on consumers.

In a permanent pursuit of transparency and accountability, the AdC is working to continuously develop its website’s features, so as to facilitate an intuitive and structured access to its enforcement and advocacy activity. The AdC now publishes its decisions relating to anticompetitive practices and merger control, as well as recommendations, studies and opinions, with greater visibility being achieved through its monthly bilingual newsletter and other multimedia channels.

Finally, looking at our own legal framework for competition policy, the transposition of ECN+ Directive will be a significant achievement. As is known, the ECN+ Directive aims to empower competition authorities by guaranteeing independence, resources and adequate investigative and sanctioning powers. Earlier in 2020, the AdC submitted to the government the proposal of draft legislation for the transposition of the ECN+ Directive. The proposal reflects the contributions received in the framework of a working group led by the AdC, and during public consultation. The agency has thus ensured an open, transparent and inclusive implementation procedure. The agency should look at 2019 as a benchmark year, both by decisions and innovative contributions. Its challenge is now to keep the high watermark moving up, in 2020 and beyond.

Get unlimited access to all Global Competition Review content