Portugal

Mário Marques Mendes and Pedro Vilarinho Pires

Marques Mendes & Associados

Legislative structure

The main legislation

Article 81 of the Portuguese Constitution lists the following among the general principles of economic organisation and as priority duties of the state:
• ensuring the efficient functioning of the market in order to guarantee balanced competition between undertakings;
• opposing monopolistic forms of organisation;
• pursuing abuses of a dominant position and other practices that may harm the general interest; and
• guaranteeing the protection of the interests and rights of the consumer.

The Constitution has evolved from the original 1976 version to reflect the various, if not somewhat conflicting, political, social and economic concerns of the constitutional lawmaker. The principles referred to above, however, along with the recognition of private property, private economic initiative and consumer protection, in articles 60 to 62 of the Constitution, show that competition is seen as an essential element of the Portuguese economic system.
The Portuguese competition regime underwent a significant transformation in 2003 with the adoption of a new Competition Act (Law No. 18/2003 of 11 June 2003, the Act), which repealed the former regime (Decree Law No. 371/93 of 29 October 1993). The Act significantly follows the rules established at Community level, and addresses agreements, decisions of associations of undertakings and undertakings’ concerted practices, the abuse of a dominant position, the abuse of economic dependence, concentrations and state aid. The Act has meanwhile been amended by Decree Law No. 219/2006, of 2 November 2006, which introduced changes in the area of merger control, and by Decree-Law No. 18/2008 of 29 January, which introduced a new possible ancillary sanction for infringements of competition law carried out within, or in connection with, public procurement proceedings (see Enforcement Procedures below).
In addition, Decree Law No. 10/2003 of 18 January 2003, created a new Competition Authority (the Authority) and approved its by-laws. The Authority has replaced the administrative entities formerly entrusted with the enforcement of competition law, namely the Directorate General for Trade and Competition and the Competition Council, both within the structure of the Ministry of Economy.
Also relevant is Law No. 39/2006, of 25 August 2006, which establishes the legal regime of the exemption and special reduction of fines for infringement of competition rules, the leniency regime.

Secondary legislation and guidance

Also relevant are:
• the Code of Administrative Procedure, which applies, on a subsidiary basis, to the procedure to be followed in merger control;
• in the merger control area, pursuant to the Act, the Authority has adopted two regulations: Regulation 1/E/2003 of 3 July 2003, which establishes the fees payable in connection with merger filings, and Regulation 2/E/2003 of 3 July 2003, which sets out a form to be used by undertakings in merger filings and covers the information to be provided to the Authority within merger control proceedings;
• still in the merger control area, the guidelines adopted by the Authority on 3 April 2007 set out the rules for the pre-notification evaluation of concentrations by the Authority;
• as regards restrictive practices, the Authority adopted Regulation 9/2005, of 3 February 2005, which establishes the procedure for notification and assessment of agreements, decisions and concerted practices;
• Regulation No. 214/2006, of 22 November 2006, which sets out the leniency administrative procedure;
• the Code of Procedure in Administrative Courts, which applies, on a subsidiary basis, to the judicial review of the Authority’s administrative decisions, including merger control;
• the General Regime on quasi-criminal minor offences (enacted by Decree Law No. 433/82 of 27 October 1982), which applies, on a subsidiary basis, to the procedure on anti-competitive agreements, decisions and practices, and to abuses of economic power, as well as to Authority decisions adopted under a sanctioning procedure, and their judicial review; and
• the legislation governing unilateral commercial practices (Decree Law No. 370/93 of 29 October 1993, as amended)

The Competition Authority

Legal status

The Authority is a public entity endowed with administrative and financial autonomy, which has been granted statutory independence for the performance of its activities. However, the Authority is still subject to general competition law principles established by the government, as well as to ministerial supervision over certain acts.

Responsibilities

The responsibilities of the Authority include:
• ensuring compliance with competition rules and regulations;
• implementing practices that may promote competition and develop a competition culture among economic operators and the public in general;
• establishing guidelines deemed relevant for competition policy;
• keeping in contact with other countries’ competition authorities and establishing cooperation links with such authorities, as well as with EU and international authorities;
• promoting research in the area of competition law;
• participating in the improvement of Portuguese laws in all areas where competition might be affected;
• carrying out the tasks conferred upon member states’ administrative authorities by Community law in the field of competition; and
• ensuring the representation of the Portuguese state in EU or international institutions in competition matters.

As far as regulated sectors are concerned, the Authority’s responsibilities are to be carried out in cooperation with the corresponding regulatory authorities.

Structure

The Authority is composed of two bodies: the Council and the Sole Supervisor, supported by a structure of legal officers, economists, inspectors and other functionaries.
The Council is the highest body of the Authority and is responsible for the enforcement of competition law and for the management of the Authority’s services. It consists of a chairman and of two or four other members, appointed by the Council of Ministers upon the proposal of the minister responsible for economic affairs, and pursuant to the hearing of the ministers responsible for finance and justice affairs.
The Sole Supervisor is responsible for the legal and economic control of the Authority’s asset and financial management. It also carries out an advisory role to the Council. The Sole Supervisor is a chartered accountant or a chartered accountant’s firm appointed by a joint decision of the ministers responsible for finance and economic affairs, after hearing the Council’s opinion.

Merger control

Triggering events and thresholds

Portuguese competition law applies to concentrations that occur in Portuguese territory or that may have an effect within it. A concentration is deemed to exist when:
• two or more previously independent undertakings merge;
• one or more persons who already have control of at least one undertaking or of one or more undertakings acquire control, directly or indirectly, of the whole or parts of one or several other undertakings. Under the Act, ‘control’ is any act, of whatever form, that confers the ability to exert, separately or jointly, a decisive influence, in the given legal and factual circumstances, on the activities of an undertaking, notably the acquisition of the whole or part of the capital, the acquisition of ownership or of the right to use or enjoy all or part of the assets of an undertaking, or the acquisition of rights or the conclusion of contracts that confer a decisive influence on the composition or in the decision-making of the governing bodies of an undertaking; and
• two or more undertakings create a joint venture, which is intended to perform on a lasting basis the functions of an autonomous economic entity.

The provisions on concentrations do not apply to the acquisition of shareholdings or assets within a special procedure of corporate recovery or bankruptcy; the acquisition of a shareholding merely as a guarantee; or the acquisition by credit institutions of shareholdings in non-financial undertakings, when such acquisition is not covered by the prohibition in article 101 of the General Regime for Credit Institutions and Financial Companies, enacted by Decree Law No. 298/92 of 31 December 1992, pursuant to which credit institutions cannot hold, directly or indirectly, for more than three years, a participation in companies outside the financial sector that grants more than 25 per cent of the voting rights in the participated company.
If the transaction does not fall under the applicability of Community law (see Regulation (EC) No. 139/2004 of 20 January 2004), concentrations are subject to mandatory prior notification with the Authority when:
• they involve the creation or strengthening of a share greater than 30 per cent of the national market in specific goods or services, or in a substantial part of it; or
• in the past financial year, the undertakings concerned recorded an aggregate turnover in Portugal of more than €150 million, net of directly related taxes, and the individual turnover in Portugal of at least two of such undertakings was more than €2 million.

Several rules on the calculation of both market share and turnover are established in the Act.
The Authority may also initiate proceedings ex officio, namely in the following cases:
• concentrations of which the Authority becomes aware and which, though subject to mandatory notification, have not been notified;
• concentrations for which the express or tacit decision of non-opposition was grounded on information, provided by the participants in the concentration, which was false or inaccurate with regard to essential circumstances for the decision; or
• concentrations in which there has been total or partial disregard for the obligations or conditions imposed at the time of the decision of non-opposition.

Notification requirements

Notification to the Authority is mandatory where the statutory thresholds are exceeded. Where prior notification is required, it must be made within seven working days from the conclusion of the agreement or, whenever relevant, until the publication date of the preliminary announcement of a takeover bid or of an exchange offer or until the publication of the announcement of the acquisition of a controlling shareholding in a listed company. Under the Act, projected concentrations may be the object of pre-notification assessment by the Authority which shall be carried out in accordance with the guidelines adopted by the Authority on 3 April 2007. Notification is subject to the fees established in the Authority’s Regulation 1/E/2003, as detailed below.
Until tacit or express clearance is granted, a concentration subject to prior notification must not be put into effect. This does not prevent the implementation of a public bid or an exchange offer that has been notified, provided that the acquirer does not exercise the voting rights. The obligations of not putting into effect a concentration or of not exercising voting rights may be subject to a derogation granted, upon request, with or without conditions attached by the Authority.
In the case of a full merger or of the establishment of common control, notification must be made by the undertakings jointly, through a common representative. In other cases, notification is filed by the undertaking or persons intending to acquire control.
Notifications are made to the Authority, and must follow the form adopted in its Regulation 2/E/2003. Notifying parties may request that parts of the information provided are kept confidential, submitting a non-confidential version of the notification.

Notification fees

Notification is subject to the filing fees established in the Authority’s Regulation 1/E/2003, and shall only be effective on the date of payment of the due fees. The basic fee payable for the appraisal of concentrations has been established in the following amounts:
• €7,500, when the previous financial year’s combined turnover in Portugal for the companies involved in the concentration, calculated according to the relevant provisions of the Act, is equal to or less than €150 million;
• €15,000, when the previous financial year’s combined turnover in Portugal for the companies involved in the concentration, calculated according to the relevant provisions of the Act, exceeds €150 million and is equal to or less than €300 million; or
• €25,000, when the previous financial year’s combined turnover in Portugal for the companies involved in the concentration, calculated according to the relevant provisions of the Act, exceeds €300 million.

If the Authority, during the first phase of the merger control procedure, decides to conduct an in-depth investigation, as detailed below, a further fee of 50 per cent of the basic fee shall be payable.
The mentioned fees may be doubled if the Authority decides to initiate ex officio proceedings (see above).

The substantive test

Concentrations falling within the scope of the Act are forbidden if they create or reinforce a dominant position in the national market, or in a substantial part of it, that results in significant impediments to effective competition. Therefore, the criteria for appraising concentrations essentially follows the one set out in the former Community Merger Regulation, Regulation (EEC) No. 4064/89 of 21 December 1989. According to the Act, notified concentrations must be assessed to determine their effects on the competition structure, having regard to the need to preserve and develop effective competition in the Portuguese market, in the interests of the users and consumers.

Procedure and time limits

First stage

First-stage proceedings are as follows.
• Within five working days of the date on which it is effective (ie, the date of payment of the due fees), the Authority shall publish the essential elements of the notification in two national newspapers, at the expense of the notifying parties, so that any interested third parties may submit their observations within the prescribed time, which may not be less than 10 working days.
• Within 30 working days of the date on which the notification is effective (extendable if requests for additional information are made by the Authority), the Authority shall complete the investigation and, accordingly, decide either not to oppose the concentration, with or without conditions or obligations attached thereto, or to initiate an in-depth investigation, when it considers that the concentration in question may possibly create or strengthen a dominant position, which may result in significant impediments to effective competition in the Portuguese market, or in a substantial part of it. The lack of a decision within 30 working days shall be deemed as a decision of non-opposition to the concentration.

Second stage

Second-stage proceedings are initiated if the Authority decides to start an in-depth investigation. This investigation must be completed within a maximum of 90 working days, counted as of the date that the notification was filed. This deadline may be extended up to a maximum of 10 business days if requests for additional information are made by the Authority. Until the end of this period, the Authority must either authorise the concentration, with or without conditions or obligations attached thereto, or prohibit the concentration, prescribing appropriate measures should the concentration have already been implemented. The lack of a decision within 90 working days shall also be deemed as a decision of non-opposition to the concentration.

Third-party intervention

In the absence of a required notification, the Authority may initiate proceedings ex officio on the basis of information on the transaction it has obtained (see above), which may include facts brought to its attention by third parties.
In addition, the Authority publishes the essential elements of a notification in two national newspapers, so that any interested third parties may provide their comments on the notified transaction. Before the adoption of final decisions, any interested parties who have raised objections to the concerned concentration shall be heard by the Authority.

Industry-specific rules

Merger control rules apply, in general, to all economic sectors, including the financial sector, which was excluded from such control under the former competition regime.
Regarding concentrations that may affect markets that are subject to special sectoral regulation, the Authority, prior to the adoption of a decision within the merger control proceedings, shall request the corresponding regulatory authority to provide its position on the notified operation, without prejudice to their own legal competences.
Companies that by law are in charge of the management of services of general economic interest, or companies that have the nature of a legal monopoly, are subject to the provisions of the Act to the extent that the application of the rules does not constitute an obstacle to the fulfilment of the particular duties they have been entrusted with.

Penalties

As stated above, the Authority may prohibit a concentration or approve it, with or without conditions and obligations attached thereto. In the case of a prohibition decision, if the transaction has already been carried out, appropriate measures to re-establish effective competition may be ordered by the Authority, including divestiture.
In addition, the Authority may:
• impose fines of up to 10 per cent of the previous year’s turn-over where undertakings execute concentrations that had been suspended or had been prohibited by the Authority, or do not comply with the conditions or obligations imposed;
• impose fines of up to 1 per cent of the previous year’s turnover where undertakings fail to give prior notification of concentrations under the Act, or refuse to provide information , or provide false, inaccurate or incomplete information; or
• impose periodic penalty payments up to 5 per cent of the average daily turnover in the preceding financial year, per day of delay counted from the date established in the decision, where the undertakings, either do not comply with an Authority’s decision which imposed a sanction or ordered the adoption of a certain measure, fail to give prior notification of concentrations under the Act or provide false information.

Appeals

Under the Authority’s by-laws, enacted by the aforementioned Decree Law No. 10/2003, prohibition decisions adopted by the Authority may be appealed to the minister responsible for economic affairs (the ‘extraordinary appeal’) who, in turn, may, with a duly justified decision, authorise the concentration, whenever the resulting benefits to fundamental economic interests are deemed to exceed the inherent disadvantages for competition. The extraordinary appeal has so far been used only in Brisa/AEA (case 22/2005). The terms of the ministerial decision adopted in this case do not remove the concerns that the procedure may raise. In fact, the overall broadness of the vocabulary and grounds of the decision may have set a precedent and an incentive which may be invoked too often whenever the Authority issues a prohibition decision.
Administrative decisions of the Authority adopted in merger control proceedings, as well as decisions of the member of the government responsible for the economy within the above extraordinary appeal proceedings, may be appealed to the Lisbon Court of Commerce, following administrative procedural law.
The Authority’s decisions, which apply sanctions for infringements of merger control provisions, are subject to appeal to the Lisbon Court of Commerce, subject to the quasi-criminal minor offences regime.

Agreements, practices and abuse of economic power

Agreements between undertakings, decisions by associations of undertakings and undertakings’ concerted practices

The Act applies to anti-competitive agreements, decisions and practices occurring in Portugal or which may have an effect within it. Article 4(1) of the Act, in line with article 81(1) of the EC Treaty, prohibits agreements between undertakings, decisions by associations of undertakings and undertakings’ concerted practices, in whatever form, which have as their object or effect the appreciable prevention, distortion or restriction of competition in the whole or part of the national market. Article 4(2) determines that these shall be considered null and void, unless deemed justified under article 5 of the Act (see below).
Article 4 lists some of the prohibited practices, also similar to those provided for in article 81(1) of the EC Treaty. Practices that are not listed may naturally fall within its scope, provided that they have as their object or effect the appreciable prevention, distortion or restriction of competition. Therefore, only significant distortions or restrictions of competition are relevant, a feature which was not present in the former competition regime.
The notion of undertaking adopted in the Act is very broad, following Community case law. It covers any entity exercising an economic activity that involves the supply of goods and services in a particular market, irrespective of its legal status or the way it functions. Groups of undertakings are treated as a single undertaking where they make up an economic unit or maintain ties of interdependence or subordination among themselves.
In decisions already adopted, the Authority has used a rather loose notion of agreement, as did the former enforcement authorities. ‘Gentlemen’s agreements’ are, accordingly, sufficient to trigger the application of the Act.
The notion of concerted practice does not differ substantially from that adopted at Community level. Considering the enforcement practice under the previous regime, which is likely to be followed under the Act, the following factors are taken into account in assessing a concerted practice:
• the practice should be distinct from mere parallel market behaviour among competitors; and
• the practice should consist of reciprocal communication to convey information on future market behaviour, so that the inherent uncertainty as to the regular functioning of the market is eliminated, enabling each competitor to anticipate the reaction of other competitors.

The prohibition in article 4 covers both horizontal and vertical agreements. Since its creation in 2003, the Authority has fined what was identified as ‘collusive tendering’ in public bids, as well as price fixing by professional associations, and coordinated price variations and price fixing by cartels.
As regards vertical arrangements, a favourable assessment largely depends on the existence of a coherent, organised and objective system of distribution, as opposed to a set of loose rules and practices. Certain practices, like resale price maintenance and absolute territorial protection are likely to be prohibited, while others, such as exclusive dealing, limited territorial protection and requirement contracts, and limited access to distribution networks may be exempted. The Authority has fined two cases of disproportionately restrictive clauses in exclusivity contracts (Nestlé Portugal and SIC/TV Cabo).

Exemptions

According to article 5(1) of the Act, agreements and practices prohibited under article 4 of the Act may be considered justified, provided that they contribute to the improvement of the production or distribution of goods and services or the promotion of technical or economic development. Similar to the provisions of article 81(3) EC, this exemption will only apply when, cumulatively, the concerned restrictive practices:
• allow the consumers of those goods and services a fair share of the resulting benefit;
• do not impose on the undertakings concerned any restrictions that are not indispensable to attaining the aforementioned objectives; and
• do not afford such undertakings the possibility of eliminating competition in a substantial part of the goods or services market in question.

Agreements or practices are deemed justified when, although not affecting trade between member states, they satisfy the remaining application requirements of a Community Block Exemption Regulation adopted under article 81(3) of the EC Treaty. However, this benefit may be withdrawn by the Authority if the practice covered by it produces effects incompatible with the aforementioned article 5(1).

Notification

According to article 5(2) of the Act, the Authority may carry out a prior analysis of agreements, decisions and practices in order to grant negative clearance or individual exemptions. This evaluation follows the procedure established by the Authority in its Regulation 9/2005, of 3 February 2005, which it has adopted pursuant to the Act.
There is no legal obligation to notify agreements, decisions or practices, and it is up to the parties to determine whether to notify or not. Regulation 9/2005 determines that any party to the agreement or practice can notify it, as long as it demonstrates having informed the other parties of such notification.
Under this regulation, the notification procedure is subject to the payment of fees of the same amount as those required for the notification of a concentration. If the notification is filed by an association of undertakings, the members of that association are considered the undertakings involved in the concerned practice for the purposes of determining the applicable fee. The fees are reduced by half for requests of renewal of exemption decisions. Notification is only effective when the fees are paid.

Abuse of economic power

Abuse of a dominant position

Article 6 of the Act, in line with article 82 of the EC Treaty, prohibits the abuse of a dominant position in the national market or a substantial part of it, which has as its object or effects the prevention, distortion or restriction of competition.
Under article 6(2) of the Act, dominance exists when an undertaking is active in a market in which it faces no significant competition or in which it is preponderant in relation to its competitors, or when two or more undertakings act concertedly in a market in which they face no significant competition or in which they are preponderant in relation to third parties. As mentioned above, the concept of a dominant position is also applied under the Act’s provisions for merger control.
The Act no longer relies on market share presumptions in order to establish dominance, as the previous competition regime did. Accordingly, the Authority is expected to rely on Community case law for such evaluation.
The following actions may be considered abusive, as exemplified in article 6(3) of the Act:
• carrying out any of the practices mentioned in article 4(1) of the Act (corresponding to anti-competitive agreements, decisions and practices, see above); and
• refusing to provide any other undertaking, upon appropriate remuneration, access to an essential network or other essential infrastructure which the first party controls, when without such access this undertaking cannot compete with the first, for factual or legal reasons, in the upstream or downstream markets (unless the dominant undertaking demonstrates that, for operational or other reasons, this access is not reasonably possible).

Under the previous regime, exclusive dealing, quantity discounts and rebates, predatory pricing, discrimination, minimum purchase obligations and tying were considered to be abusive practices. Similar findings are also to be expected under the Act.

Abuse of economic dependence

Article 7 of the Act has maintained the concept of abuse of economic dependence (adopted by the previous competition regime), while introducing significant adjustments to this legal category. Under this provision, the Act prohibits undertakings from engaging in the abusive exploitation of the economic dependence on them by any suppliers or clients due to the absence of an equivalent alternative, insofar as it affects the market functioning or the structure of the competition.
An equivalent alternative is considered to be unavailable when the supply of the good or service in question can only be provided by a restricted number of undertakings, or if an undertaking cannot obtain equivalent commercial conditions from other partners within a reasonable time frame.
The following may be considered abusive:
• carrying out any of the practices mentioned in article 4(1) of the Act (corresponding to anti-competitive agreements, decisions and practices, see above); and
• partially or totally ending an established commercial relationship without justification, taking into account past commercial relationships, the uses of the trade and the relevant contract terms.

Enforcement procedures

Sanctioning procedure

When the Authority is made aware, by any source, of an anti-competitive agreement, decision or practice, or of an abuse of economic power, it initiates an investigation. During this investigation it carries out the necessary enquiries to identify the practices and their agents. When the investigation is complete the Authority either:
• closes the case, if there is insufficient evidence of infringement; or
• initiates proceedings by notifying the accused undertakings or associations of undertakings, if it concludes that there is sufficient evidence of infringement.

On the conclusion of the proceedings, if the Authority finds that an infringement occurred, without prejudice to the criminal liability which may apply, the Authority may take either or both of the following courses of action:
• order the infringer to adopt the indispensable measures to bring the infringement to an end within the deadline established previously;
• impose fines and other sanctions on the infringing entities; and
• authorise an agreement under the terms and conditions set out in article 5 of the Act.

The Authority may also adopt interim measures if the investigated practice may cause damage that is imminent, serious and irreparable or difficult to rectify.
As regards fines and other sanctions, the Authority may impose fines of up to 10 per cent of the previous year’s turnover in Portugal for each of the infringing undertakings in case of infringements of articles 4, 6 or 7 of the Act or for non-compliance with a decision ordering interim measures. The refusal to provide information, the provision of false, inaccurate or incomplete information, or non-cooperation with the Authority are subject to fines of up to 1 per cent of the previous year’s turnover in Portugal for each of the infringing undertakings.
The Authority may further impose periodic penalty payments of up to 5 per cent of the average daily turnover in Portugal in the preceding financial year, per day of delay counted from the date established in the decision, where the undertakings do not comply with an Authority decision imposing a sanction or ordering the adoption of a certain measure.
Furthermore, if the seriousness of the infringement so justifies, the Authority, as ancillary sanctions, may at the offender’s expense, publish the sanctioning decision in the official gazette (Diário da República) or in a Portuguese newspaper with national, regional or local circulation, depending on the relevant geographic market, and in case of competition law infringements carried out in public procurement proceedings, prohibit the concerned undertakings from participating, for a maximum of two years, in such type of proceedings.
Whenever an infringement occurs in an area that is subject to sectoral regulation, the Authority shall enter into a consultation procedure with the corresponding regulatory authority. Furthermore, prior to the adoption of a decision, the Authority shall provide a proposal thereof to the relevant regulatory authority and shall request the latter’s opinion.

Leniency

Law No. 39/2006, of 25 August 2006, adopted the leniency regime in Portuguese competition law. This regime has been complemented by Regulation No. 214/2006, of 22 November 2006, which sets out the leniency administrative procedure.
Law No. 39/2006 applies to agreements and concerted practices prohibited under article 4 of the Act and, if applicable, under article 81 EC.
Under Law No. 39/2006 the first undertaking that denounces a cartel before any investigation has begun may be totally exempted from paying a fine. Furthermore, this Law establishes criteria for reduction of fines for when an investigation is already taking place at the moment of the ‘defection’ of the undertaking, but the Authority has not yet notified the cartel participants of the proceedings it has started. In this case, only the first two may benefit; the first of a minimum of 50 per cent reduction and the second one of a maximum of 50 per cent reduction.
Finally, there is also the possibility to benefit from a special or an additional reduction of the fine when the undertaking offers information regarding other cartel or cartels of which it is a part of.
Law No. 39/2006 extends the leniency to the members of the board of the companies involved. Executives, be it on behalf of the company or individually, may benefit from immunity or fine reduction, along the same lines and under the same conditions as companies do.

Judicial appeals

The Authority’s sanctioning decisions (typically involving anti-competitive agreements, decisions and practices, or abuses of economic power) are subject to appeal to the Lisbon Court of Commerce, subject to the quasi-criminal minor offences regime.

Recent developments

New members of the Board of the Competition Authority
On 25 March 2008, Professor Manuel Sebastião took office as president of the Board of the Competition Authority, replacing Professor Abel Mateus, while Professor Jaime Serrão Andrez and Mr João Espírito Santo Noronha replaced the other former members of such Board, Mr Eduardo Lopes Rodrigues and Ms Teresa Moreira.

The new Simplified Decision procedure

On 24 July 2007 the Authority introduced a Simplified Decision procedure, which may shorten the initial 30 working-day review period. This procedure will be applied on a case-by-case basis depending on the specifics of each transaction. It may apply, in particular, to transactions that do not result in a significant change in the competitive structure of the market (for example, because they only consist of a transfer of a market share, as opposed to an increase).
Currently, the procedure is still being tested and at present is merely an internal guideline. Therefore, although it may be expected that the Authority will be quicker to reach a decision in appropriate cases, only practice will show the extent to which the review period may be shortened.

Changes in appeal rules

On 1 April 2008 the government submitted to parliament a draft law that carries out a comprehensive reform of the organisation and functioning of the judicial courts.
Among the various amendments to the current relevant provisions, the said draft law provides for the amendment of articles 50, 52, 54 and 55 of the Competition Act, which establish the courts that are competent to handle appeals from decisions adopted by Competition Authority both in sanctioning and in administrative proceedings. Such competence, which currently is exclusively entrusted with the Lisbon Court of Commerce, shall under the new regime be granted to the commerce section of the territorially competent court. In the absence of such a commerce section, the commerce section of the Lisbon Court shall be the competent one.
The said draft law has already been approved, in general, by parliament, and, it is currently being assessed by parliament’s Commission of Constitutional Affairs, Rights, Liberties and Guarantees and is planned to enter into force in 2009, although in a limited number of areas.

Revised Concentration Operations’ Notification Form

Through a press release dated 15 May 2008, the Competition Authority opened a public consultation on the new Draft Concentration Operations’ Notification Form. The period to submit any observations on the matter to the Authority expired on 30 June 2008.
The Draft Notification Form appears to be more restrictive than the Notification Form currently in force, notably because, although many points will still be signalled in the Form as information that the notifying parties may assess the need to fill in, the parties will be required to provide a duly justified explanation for having decided not to fill in such points, a requirement that is not contemplated in the current form.
There are also new elements required by the Draft Notification Form and which the current Notification Form either does not require or indicates as being merely optional. These include, notably:
• in addition to the three hard copies, a version of the notification in digital format (CD or DVD) will also have to be submitted and, if the relevant markets are the object of sector regulation, there must be provided as many additional copies of the notification form as the regulatory entities to be consulted;
• if there is overlap in any of the relevant markets, a calculation of the Herfindahl-Hirschman Index (HHI), containing the indication of the corresponding Delta, will have to be included; and
• a mandatory description and explanation of the relevance of the existing channels for the distribution of the products or of the networks for the provision of the services that make up the relevant market, and clarification of whether each of the parties to the concentration uses different distribution channels or service networks.

An extract from The European Antitrust Review 2009