Portugal Adopts New Competition Law

Author:Van Bael Bellis
Profession:Van Bael & Bellis

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 practice concerned.

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...

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