On 8 May 2012, Portugal's new competition law was published
in the national Official Journal, thoroughly overhauling the
Portuguese competition regime and aligning it with EU competition
law. The new law will enter into force on 7 July 2012.
The reform was agreed upon in 2011 when Portugal, the European
Commission, the European Central Bank and the International
Monetary Fund signed the Troika Memorandum of Understanding. This
reform is deemed to be particularly necessary in the current
economic climate, since, according to Manuel Sebastião, Head
of the Portuguese Competition Authority (PCA), it will contribute
to reinforcing the competitiveness of Portuguese companies.
Many of the new developments deal with restrictive practices.
First, the PCA has been given the possibility to prioritise cases,
and thus it will no longer be compelled to respond to every
complaint. This will allow the PCA to focus on the most critical
cases and to handle complaints more efficiently.
Further, the PCA will be empowered to raid not only corporate
offices but also employees' private homes. Additional
investigatory powers have also been vested in the PCA, such as the
possibility of seizing documents without having first obtained
judicial authority to do so.
The new law introduces the possibility to terminate proceedings
through commitments and settlement agreements, as well as the
possibility to impose structural remedies whenever behavioural
remedies are not sufficient to put an end to the restrictive
The Portuguese leniency program is also undergoing major
modifications. Once the new competition law enters into force, the
leniency program will only apply to cartels, instead of all
restrictive agreements as is currently the case. The new regime
will align the levels of reductions in fine for leniency applicants
with the European Leniency Notice. Moreover, a larger number of
undertakings will be able to benefit from the leniency regime.
A controversial provision of the new competition law is the lack
of suspensive effect of appeals against PCA's decisions, which
means that, despite an appeal, the undertaking concerned will still
have to pay immediately any fine imposed (or, at least, provide a
bank guarantee in case the payment of the fine would cause
considerable damage to the company). This provision has been
criticised on constitutional grounds as being inconsistent with the
presumption of innocence. Moreover, some have pointed out the
difficulties that many companies will face in obtaining bank
guarantees given the current economic and financial climate.
With regard to merger control, the new law has significantly
modified notification thresholds. Merging undertakings will be
subject to the obligation to notify a proposed concentration if (i)
their combined market share exceeds 50%; (ii) their combined market
share ranges between 30 and 50% and the turnover in Portugal of at
least two of the undertakings concerned exceeds € 5
million; or (iii) the combined turnover of all the undertakings
concerned exceeds € 100 million in Portugal, provided that
the turnover in Portugal of at least two of the undertakings
concerned exceeds € 5 million. Further, the previous
deadline of seven working days to notify a merger has also been
Insofar as market dominance is concerned, the new law will
introduce the "significant impediment to effective
competition" substantive test, in line with EU
In parallel to the new law, the Portuguese government has
announced the creation of a new court specialised in competition
and regulatory matters, which is expected to significantly speed up
judicial proceedings. Although the new competition law does not
directly regulate this point, it does include an innovative
provision with respect to judicial review of PCA decisions: under
the new regime, on appeal the courts will be entitled to increase
the amount of fines imposed by the PCA, constituting an extension
of their current powers. which are now limited to either confirming
or lowering a fine.
Finally, the PCA will be required to publish its decisions on
restrictive practices on its website. Moreover, it will also have
to publish guidelines on the method of setting fines, which will
provide companies with a greater degree of legal certainty.
The new law has been criticised for not introducing significant
improvements with respect to control and transparency mechanisms
while increasing the PCA's freedom of action, thus reducing the
PCA's accountability. However, the reinforcement of the
PCA's investigation powers is expected to heighten the
PCA's readiness to act in antitrust matters, which has hindered
its ability to enforce competition law in the past.
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