Annual Report on Competition Policy Developments in Portugal
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Organisation for Economic Co-operation and Development DAF/COMP/AR(2020)28 Unclassified English - Or. English 11 June 2020 Directorate for Financial and Enterprise Affairs COMPETITION COMMITTEE Annual Report on Competition Policy Developments in Portugal -- 2019 -- 10-12 June 2020 This report is submitted by Portugal to the Competition Committee FOR INFORMATION at its forthcoming meeting to be held on 10-12 June 2020. JT03462899 OFDE This document, as well as any data and map included herein, are without prejudice to the status of or sovereignty over any territory, to the delimitation of international frontiers and boundaries and to the name of any territory, city or area. 2 DAF/COMP/AR(2020)28 Table of contents Portugal 3 Executive Summary 3 1. Enforcement of competition law and policies 4 1.1. Action against anticompetitive practices, including agreements and abuses of dominant positions 4 1.1.1. Summary of activities 4 1.1.2. Sanctioning decisions 5 1.1.3. Commitment decisions 8 1.2. Judicial review of AdC decisions 9 1.3. Mergers and acquisitions 9 1.3.1. Statistics on number, size and type of mergers notified and/or controlled under competition laws 9 1.3.2. Summary of significant cases 11 2. The role of competition authorities in the formulation and implementation of other policies 11 2.1. Promoting a pro-competitive legislative and regulatory environment 11 2.1.1. AdC opinions, studies and recommendations across various sectors 12 2.2. Reaching out to stakeholders on the benefits and rules of competition 13 3. International Cooperation 14 3.1. European Cooperation 14 3.2. Bilateral cooperation 14 3.3. Multilateral cooperation 15 4. Resources of Competition Authorities 16 4.1. Resources overall 16 4.1.1. Annual budget 16 4.1.2. Number of employees (in 31.12.2019) 16 4.2. Human resources applied to competition (in 31.12.2019) 16 5. Summaries of references to new reports and studies on competition policy issues 16 5.1. Issues Paper on Digital Ecosystems, Big Data and Algorithms 16 5.2. Report on loyalty clauses in the telecoms market 18 ANNUAL REPORT ON COMPETITION POLICY DEVELOPMENTS IN PORTUGAL Unclassified DAF/COMP/AR(2020)28 3 Portugal This report covers the activities of the Autoridade da Concorrência (AdC) - Portuguese Competition Authority from 1 January 2019 to 31 December 2019. Executive Summary In 2019, the AdC had significant activity both on competition enforcement and competition advocacy. Regarding its enforcement powers, the AdC imposed a total of € 340.2 million in fines, in seven sanctioning decisions, which single-handedly exceeds the total amount of fines the AdC had applied since its inception in 2003. This unprecedent result was mainly driven by the total fine of € 225.2 million imposed in a case for concerted practices of exchanging sensitive commercial information on credit products involving 14 banks. The AdC’s enforcement activity in 2019 was also marked by a sanctioning decision for abuse of dominance in the teleregulation market for electric energy, in which the AdC imposed a fine of € 48 million to the incumbent firm. Furthermore, the AdC imposed a fine of € 24 million for an RPM infringement concerning the supply of beverages in hotels, restaurants and cafes. In regard to 2019’s cartel decisions, three out of the four decisions issued were settlement decisions, under which undertakings acknowledged participation in the infringement, waiving the right to appeal and benefiting from a fine reduction, which allows for a simplified and shortened procedure. Finally, the AdC also issued a commitments decision in the bakery sector, completing a total of eight decisions related to anti-competitive practices. In the merger field, the AdC issued 59 merger control decisions, opening two in-depth investigations. One of these in-depth reviews was cleared (Ccent no. 45/2018 - Grupo HPA Saúde / HGSL) and in the other case (Ccent. No. 9/2019 - Fidelidade SGOII / Saudeinveste*IMOFID) the notifying party withdrew the notification. With respect to judicial review, there was a significant increase of litigation resulting from the reinforcement of the sanctioning activity, but with an overall high success rate for the AdC. The appeals related mainly to procedural grounds, including issues such as inspections, evidence review and handling, access to file, confidentiality, effect of appeals and rights of defence. In the context of its advocacy powers, the AdC has been keen on addressing the challenges to competition created by the digitalization of the economy. In that regard, the AdC published an issues paper on digital ecosystems, big data and algorithms. With this issues paper, the AdC expects to further promote compliance, by reinforcing firms’ awareness, and contribute to the public discussion on the impact and effects of the digitalization on competition. Moreover, the AdC issued 25 opinions, studies and recommendations on draft and existing legislation and regulation in a wide range of sectors, such as transportation, e-commerce, digital economy, pharmaceuticals, energy and telecoms, seeking to promote a more competitive legal and regulatory framework in Portugal. ANNUAL REPORT ON COMPETITION POLICY DEVELOPMENTS IN PORTUGAL Unclassified 4 DAF/COMP/AR(2020)28 In 2019, the AdC continued its “Combatting Bid-Rigging in Public Procurement” campaign, launched in 2016 with the aim of raising awareness regarding bid-rigging in public procurement and promoting competition in this area, reaching a total of over 2,200 participants from adjudicating bodies. The campaign has already resulted in one sanctioning decision in a cartel case related to railway maintenance. Moreover, the AdC initiated the preparation of the draft legislation to transpose the ECN+ Directive, which aims to empower the competition authorities of the Member States to be more effective enforcers and to ensure the proper functioning of the internal market. The AdC promoted an open, transparent and inclusive process, namely by setting up an experts working group, holding an open workshop, and by launching a public consultation on its proposal. The AdC also awarded the 2nd edition of its Competition Policy Award, which encourages research in competition economics and law, to a legal paper which analysed the history of regulation in telecommunications in the EU and US, extracting conclusions for the digital space with a view to providing policy-makers and enforcers with a toolbox to rationalize public measures towards platforms. In the international activity, besides being an active member in the various European and international fora such as the OECD, the European Competition Network (ECN) and the International Competition Network (ICN), the AdC promoted meetings of the Lusophone Competition Network, participated in the 8th Bilateral Meeting with the Spanish Competition Authority and signed a Memorandum of Understanding with the Moroccan Competition Council. 1. Enforcement of competition law and policies 1.1. Action against anticompetitive practices, including agreements and abuses of dominant positions 1.1.1. Summary of activities 1. In 2019, the AdC adopted a total of eight decisions on restrictive practices proceedings, including seven sanctioning decisions which led to the imposition of € 340.2 million in fines. The AdC's sanctioning decisions included a full array of practices, such as a concerted practice of exchanging sensitive commercial data between banks, a cartel in railway maintenance, a first-ever cartel in the insurance sector, an abuse of dominant position in the energy sector and retail price maintenance in food retail distribution. Regarding decisions covering cartels, three out of the four decisions issued were settlement decisions, under which firms and managers involved confessed participation in the infringement and waived their right to appeal. 2. The AdC also accepted commitments in one decision involving the bakery sector. This decision obliged the Northern Association of Manufacturers of Bread, Pastries and Similar Products (AIPAN) to commit to making clear to its members that they have full freedom and autonomy to set prices, thereby minimizing the potential restrictive effect of statements made by the president of the Association in regard to bread prices, safeguarding consumer interests. 3. Besides these eight decisions, the AdC issued five statements of objections, three in the food retail sector (potential hub and spoke infringements), one in the advertising sector and one in the telecommunications sector. ANNUAL REPORT ON COMPETITION POLICY DEVELOPMENTS IN PORTUGAL Unclassified DAF/COMP/AR(2020)28 5 4. By the end of the year, the AdC was investigating 20 cases of restrictive practices regarding alleged prohibited agreements - both vertical and horizontal ones -, concerted practices and decisions by associations of undertakings. 5. Fines. The AdC fined undertakings € 340.2 million in seven sanctioning decisions regarding anticompetitive practices. 6. Inspections. The AdC carried out inspections in 15 premises of 19 undertakings in three proceedings (health, waste management and private surveillance sectors). Table 1. Summary of antitrust cases in 2019 No. of cases Sanctioning decisions 7 Commitment decisions 1 Investigations filed 0 Investigations launched 4 Ongoing investigations (31.12.2019) 20 1.1.2. Sanctioning decisions Case No. PRC/2016/6 – cartel in railway maintenance services 7. In April 2019, the AdC imposed fines of € 906,485 on Mota-Engil – Engenharia e Construção, S.A. and one of its managers. Furthermore,