The New Competition Law

Profession:Macedo Vitorino e Associados
 
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Summary

Law 18/2003 of 11 June sets out the new competition legal framework by revoking Decree-Law 371/93 of 29 October, as amended from time to time.

Portuguese Government has initiated a reform of the competition framework with a view to improving the competitive landscape for both Portuguese and foreign investors wanting to develop a business in Portugal. As a first step, the Portuguese Competition Authority (Autoridade da Concorrncia - the "Competition Authority") was created through Decree-Law 10/2003 of 18 January 2003. Unlike its predecessor, which was a government body, the Competition Authority is an independent authority with the power to monitor competition in all sectors of the economy.

Law 18/2003 of 11 June establishes the new competition legal framework (the "Competition Law"), by revoking Decree-Law 371/93 of 29 October 1993, as amended from time to time.

1. Restrictive practices

The Competition Law introduces no substantial changes to the legal framework of restrictive practices.

The prohibition of restrictive practices is limited to those practices that may have as their objective or effect a "significant restriction or distortion" of competition in the whole or in part of the national market. Companies may, however, be exempted from the prohibition of such restrictive practices in case they improve the production or distribution of goods or promote economic or technological progress.

2. Abuse of dominant position

The old competition law established several assumptions for the purposes of assessing if a company held a dominant position in the market. A company would be deemed to have a dominant position if it held a share equal to or exceeding 30% of the market of a product or service. These thresholds would be increased to 50% market share for two or three companies and to 65% market share in case of four or five companies.

Under the Competition Law, these assumptions were eliminated. A company shall now be deemed to have a dominant position in the relevant market if it dominates the market and has no relevant competitors. In addition, a company or companies' conduct shall be construed as abusive if (i) it distorts or restricts competition or (ii) it refuses to grant other companies, for reasonable consideration, access to a network or any other infrastructure, which it controls.

3. Abuse of economic dependence

The concept of abuse of economic dependence has no equivalent in most European Union Member States...

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