Comparative Guides

Welcome to Mondaq Comparative Guides - your comparative global Q&A guide.

Our Comparative Guides provide an overview of some of the key points of law and practice and allow you to compare regulatory environments and laws across multiple jurisdictions.

Start by selecting your Topic of interest below. Then choose your Regions and finally refine the exact Subjects you are seeking clarity on to view detailed analysis provided by our carefully selected internationally recognised experts.

4. Results: Answers
Investigations – step by step
What initial steps do the enforcement authorities take to commence a cartel investigation?

Answer ... The Portuguese Competition Authority (PCA) will commence an investigation either ex officio, following a complaint or following a leniency application (which is the most common trigger in cartel investigations).

Once the PCA learns of a potential competition infringement, it will launch an official procedure. At this first stage of the proceedings, the PCA will adopt all necessary investigatory measures to determine whether the practice at stake may amount to a competition law infringement and which parties were involved in the alleged infringement. In cartel investigations, the first investigatory measure will typically consist of dawn raids.

The PCA will conclude the first stage of the proceedings with the adoption of a decision to:

  • terminate the investigation, if there is insufficient evidence for a reasonable likelihood of a decision imposing a sanction;
  • settle the case by issuing a sanctioning decision within the context of a settlement procedure;
  • terminate the investigation by adopting a decision imposing conditions (to guarantee compliance with commitments submitted by the party concerned in order to address the competition concerns stemming from the practice); or
  • continue with the proceedings by initiating the second stage of the investigation, by issuing the defendant(s) in the proceedings by means of a statement of objections.

For more information about this answer please contact: Luís Seifert Guincho from SRS Advogados
Are dawn raids commonly conducted in your jurisdiction? If so, what are the pre-conditions for conducting a dawn raid? When, where and by whom are they conducted? Do the enforcement authorities have the power to search private as well as company premises?

Answer ... There has been a dramatic rise in the number of dawn raids conducted in Portugal. Since 2017, the PCA has conducted 21 dawn raids – a significant increase on the previous average of fewer than three dawn raids per year.

The PCA may conduct dawn raids at a company’s premises with or without prior notice. The PCA may also conduct dawn raids at the private premises (ie, homes, property and vehicles) of individuals (eg, shareholders, board members, employees and other individuals working with a company or association of companies, including lawyers and doctors) where there is a well-substantiated indication that evidence of serious infringement may be found there. The requirements when conducting dawn raids at private premises are much stricter than those applicable to dawn raids at business premises and a warrant is needed from the competent judicial authority.

Dawn raids are conducted by PCA officials who must, for this purpose, present credentials issued by the PCA stating the purpose of the investigation and the warrant from the competent judicial authority.

Finally, the Competition Act states that where necessary, the PCA can seek support from the police when carrying out dawn raids (which often happens at the beginning of a dawn raid).

For more information about this answer please contact: Luís Seifert Guincho from SRS Advogados
What powers do officers have during the dawn raid? Are there any limitations on these powers?

Answer ... When conducting a dawn raid, PCA officials generally enjoy the powers granted to the PCA regarding its investigatory process under Article 18 of the Competition Act. These include the power to:

  • question and interview persons at the company;
  • search, examine, collect and seize accounting data or other documentation, including the devices on which they are stored or saved (eg, computers, tablets or electronic devices);
  • request documents from the company; and
  • seal off any premises where such information or data may be stored or saved.

Key limitations to the PCA’s powers include legal privilege and restrictions on telephone tapping, which is available only in criminal proceedings. In addition, the PCA must respect the parties’ rights of defence and, when exercising its powers of inquiry, the right against self-incrimination.

For more information about this answer please contact: Luís Seifert Guincho from SRS Advogados
What are the rights and obligations of the target company and any individuals targeted during a dawn raid?

Answer ... Both the target company and any individuals investigated during a dawn raid have the right to have legal advisers present. However, the law does not require PCA investigators to await the arrival of legal advisers before commencing a dawn raid,

Article 18 of the Competition Act states that the PCA may interview individuals. When doing so, the PCA is obliged to notify the person being questioned whether he or she is being questioned as a witness or as a defendant. Defendants have a right against self-incrimination and may refuse to answer, whereas witnesses and legal representatives of the company are obliged to answer all questions of fact truthfully. Individuals always have the right to request that a lawyer be present during the questioning.

In the context of investigations conducted by the PCA, the Competition Act states that, as a rule and unless such documents are the object of or an element in the infringement itself (in which case they may be seized), the PCA is prohibited from seizing documents that are covered by attorney-client privilege.

Attorney-client privilege is recognised in Article 87 of the Portuguese Bar Association Rules, which covers all facts, documents and information that relate directly or indirectly to professional matters disclosed by a client to its attorney. This privilege extends to any lawyers intervening in the matter and their respective employees; it also extends to in-house counsel.

The obligations of the targets of dawn raids include:

  • the duty to cooperate with the PCA (non-compliance or obstruction of the exercise of the PCA’s investigatory powers will be sanctioned with a fine of up to 1% of the company’s turnover); and
  • the duty to supply all information requested by the PCA (non-compliance is subject to a similar sanction).

For more information about this answer please contact: Luís Seifert Guincho from SRS Advogados
What evidence can be seized during a dawn raid? Do the enforcement authorities have the power to interview witnesses and take statements during a dawn raid?

Answer ... According to Article 18 of the Competition Act, during a dawn raid the PCA may seize accounting data or other documentation – irrespective of the devices on which it is stored or saved – in the premises, property or means of transport of the undertakings concerned, whenever this is deemed necessary to obtain evidence.

Documentation or correspondence protected by client-attorney privilege can be seized only under very strict conditions (see question 3.7). Furthermore, documents at banks and other credit institutions and covered by banking secrecy can be seized only where there are well-substantiated reasons to believe that such documents relate to an infringement and are important in proving that infringement. These seizures are carried out by the judge responsible for procedural safeguards, who may be assisted by the police or a member of the PCA, all of whom are bound by a duty of confidentiality.

Telecommunications and correspondence (if unopened) are specifically protected by the general regime of administrative offences (Decree-Law 433/82, as amended) and by the Portuguese Constitution.

Finally, both during dawn raids and at any other point in the proceedings, the PCA may interview any persons – either personally or through their legal representatives – whenever it considers that these statements may be pertinent to the investigation (see question 4.4).

For more information about this answer please contact: Luís Seifert Guincho from SRS Advogados
How can a company best prepare itself for dawn raids? What best practices should it follow in the event of a dawn raid?

Answer ... By their nature, dawn raids carried out by the PCA are usually unannounced and unexpected. Therefore, the best way to prepare for a dawn raid is to train all employees (including support staff, such as reception and IT staff) in how to behave, inform them of the consequences and have a set of guidelines in place.

Companies are usually recommended to assemble a designated taskforce for handling dawn raids, which should include a member of the senior management team and an in-house counsel.

Companies are also strongly recommended to seek assistance from external lawyers, to ensure that they can benefit fully from the protection of legal professional privilege against the disclosure of documentation.

During a raid, special dawn raid procedures should be followed. Companies should also take the following first steps:

  • Liaise immediately with legal counsel;
  • Check the identification documents of the officials that authorise an inspection and confirm its scope and purpose;
  • Ensure that the officials are not left alone, and assemble a team of employees to assist each PCA or EU official/investigation team;
  • Agree on a procedure with the officials in order to maintain control of what is happening and when;
  • Make copies of the documents copied or analysed by the officials;
  • Inform employees that a raid is taking place and issue instructions regarding cooperation, non-obstruction, non-destruction of documents and non-disclosure to third parties; and
  • Not speak more than necessary or volunteer information or documents that have not been requested.

Companies should also consider working on their external communication strategy – in particular, by preparing a written statement to be released if approached by the press (this is a sensitive issue, as dawn raids are usually protected by judicial secrecy).

For more information about this answer please contact: Luís Seifert Guincho from SRS Advogados
What are the next steps in the cartel investigation following a dawn raid? What timeframe do these typically follow?

Answer ... Dawn raids typically occur in the first stage of the proceedings, during which the PCA undertakes all necessary investigatory measures to determine whether the practice at stake may amount to a competition law infringement and which parties were involved in the alleged infringement.

Following the dawn raid, the PCA may address further requests for information to the defendant, to clarify certain issues or to obtain additional information. It has also been the practice of the PCA to hold meetings with the parties to discuss the facts of the case and discuss its possible outcomes (eg, a first approach to a settlement).

Furthermore, after assessing all available evidence in the proceedings in detail, the PCA will notify the parties of which pieces of evidence will remain in the official files of the proceedings. If the PCA concludes that certain elements may not be relevant to the proceedings, these elements will be returned to the defendant.

In order to prepare for access to the file, the PCA will also request the defendant to indicate and substantiate whether any of the evidence seized in the dawn raid amounts to a business secret and should therefore be classified as confidential.

The PCA has an indicative deadline of 18 months to conclude the first stage of the proceedings (which is often extended). The possible outcomes of this stage of the proceedings are outlined in question 4.1.

Where the proceedings move to the second stage (ie, where the PCA issues a statement of objections), the defendant will have the opportunity to exercise its defence rights by replying to the statement of objections within a “reasonable period” (not less than 20 working days), to request the PCA to undertake additional investigatory measures and to have its written submissions complemented by an oral hearing.

For more information about this answer please contact: Luís Seifert Guincho from SRS Advogados
What factors will the enforcement authorities consider in assessing whether cartel activity has taken place?

Answer ... In general terms, when assessing a competition law infringement, the PCA will consider all elements of fact and law relevant to substantiating its case.

For more information about this answer please contact: Luís Seifert Guincho from SRS Advogados
In case of a finding of cartel activity, can the company seek to negotiate a settlement, plea bargain or similar resolution? If so, what is the process for doing so?

Answer ... Under Portuguese law, two resolution mechanisms are available for competition law infringements. The parties may:

  • agree with the PCA on the adoption of binding commitments in exchange for the proceedings to be dropped; or
  • enter into a settlement procedure that allows for a swift decision and a reduction in fine (cumulative with the leniency programme).

In cartel proceedings, given the seriousness of the offences, only the latter is typically available.

The settlement procedure is available on terms similar to those applied by the European Commission. However, fine reductions in Portugal are not subject to a 10% ceiling and the PCA will decide on the reduction on a case-by-case basis (neither the Competition Act nor the PCA guidelines on the method of setting the fine clarify the reduction that may be expected). Generally, the sooner a settlement is reached, the greater the reduction.

The Competition Act identifies two stages during which the settlement procedure may be applied:

  • the investigation phase (where the party must submit a written settlement proposal, which the PCA will either refuse or accept); and
  • the prosecution phase (where the party can admit the facts and accept responsibility for the infringement; the PCA will then either refuse or accept the settlement).

The facts admitted to the PCA in a settlement procedure cannot be judicially appealed. Moreover, only interested third parties may access related documents for the purposes of preparing their defence; they cannot make copies of such documents without authorisation from the parties involved.

For more information about this answer please contact: Luís Seifert Guincho from SRS Advogados