the portuguese competition authority’s experience with the icn recommended practices and...

The Portuguese Competition Authority’s

Experience with the ICN Recommended

Practices and Anti-Cartel Enforcement

Manual

Abel M. MateusPresident

Autoridade da Concorrência

6th ICN Annual Meeting Moscow, 30th May – 1st June 2007

Autoridade da Concorrência - PORTUGAL

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I – MERGERS

1. The Portuguese Merger Control Regime: basic

features

2. Review of Merger Control provisions

- reduced deadlines

- pre-notification

- simplified decisions

3. Future amendments and the ICN Recommended

Practices – Nexus to the Reviewing Jurisdiction;

Notification Thresholds

Outline


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II - ANTITRUST ENFORCEMENT:

1. Leniency Law: review of recent legislative

developments referred to by the ICN Anti-Cartel

Enforcement Manual

2. PCA’s powers of investigation – Procedures and

Practices

Outline


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• PCA: sole body competent to assess/decide on mergers;

•Mandatory prior notification: Law 18/2003

• Notification thresholds: 2 alternatives

a) a market share threshold - the creation or strengthening of a 30% market share in Portugal,

OR

b) an aggregate turnover threshold in Portugal by the participating undertakings > 150 million euros (net of taxes);

- as long as at least 2 of the participating undertakings have a turnover > 2 million euros in the previous financial year.

Basic Features of Merger Control


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•Test: “Creation or strengthening of a dominant position” and “significant impediment on effective competition”, according to the concept of Dominant position (PCL), case law of the European Courts + Commission’s practice.

• Local Nexus to the Transaction: for Portuguese Competition Law, effect on Portuguese market, along the lines of the EC practice and case law;

- The local nexus will be either based

- on the market share > 30% or - on turnover of undertakings involved in the merger in Portugal (without any additional EC

or world turnover criteria).



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•Market share threshold:

the acquisition of a 30% market share in Portugal by an undertaking not previously active in Portugal falls under the Portuguese Merger Control regime due to possible vertical and conglomeral effects as well as economies of scope – the identity of the acquirer of control is not irrelevant;

• Turnover in Portugal only:

because there is a big number of undertakings that supply the Portuguese market, in spite of Portugal hardly being their biggest market;



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•Decree-Law 219/2006: Transposition of EC Directive

2004/25 – Public Bids and review of the Competition

Law – goal: to speed up merger cases (mainly public

bids) and to simplify procedures

- reduced deadline for Phase II: now 60 working days;

- pre-notification: a new procedure developed by

PCA’s guidelines;

- simplified decisions: to expedite proceedings and

allow the PCA to concentrate efforts on the few

complex mergers.

Review of Merger Control provisions


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• See ICN RP Nexus to the Reviewing Jurisdiction and Notification Thresholds:

Portuguese Competition Law applicable for almost 5 years: over 300 Merger decisions – time for a review;

Notification Thresholds:

-Market share threshold: burdensome for cases having little impact on the Portuguese market; contributes to multiple filings; corresponds to around 30% of all cases;

- Turnover threshold: may need updating - ceiling of 150 million euros has been applicable since 1993;

- Further flexibility: review the application of the Code of Administrative Proceedings to Merger cases under Competition Law.

Future Amendments and the ICN Recommended Practices


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Law 39/2006: Leniency program

* Immunity: to the first undertaking to submit evidence before PCA starts an investigation;

* Reduction equal to or exceeding 50%: to the first undertaking to submit evidence, if after PCA had started an investigation;

* Reduction of up to 50%: to the second undertaking to submit evidence;

* Other undertakings‘ cooperation will be rewarded under the general framework set by the Competition Law.

Portuguese Leniency Law An Effective Leniency Program


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Specific features of the Law 39/2006

- ICN Anti-Cartel Enforcement Manual – Chapter 2 -

Drafting and implementing an effective leniency program

Amnesty Plus – Article 7, Law 39/2006

“Pursuant the Amnesty Plus policy a company that does not qualify for amnesty for the initial matter under investigation but discloses a second cartel and meets the amnesty program requirements will receive amnesty for the second offence and a substantial additional reduction in the calculation of the fine for its participation in the first offence.”



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Specific features of the Law 39/2006

ICN Anti-Cartel Enforcement Manual – Chapter 2

Drafting and implementing an effective leniency program

Marker System

“Practice of reserving a place for applicants

whilst they conduct further internal

investigations and attempt to perfect their

application for leniency prior to the agency

determining the fist eligible applicant.”



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ICN Anti-Cartel Enforcement Manual

Chapters 1 & 3

Dawn-raids:

*organising the search*conducting the search*seizure

Digital evidence gathering:

*chain of custody *chain of evidence

PCA’s powers of investigationProcedures and Practices


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Thank you

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