The Portuguese Competition Authority’s Experience with the ICN Recommended Practices and Anti-Cartel Enforcement Manual Abel M. Mateus President Autoridade da Concorrência 6th ICN Annual Meeting Moscow, 30th May – 1st June 2007

Autoridade da Concorrência - PORTUGAL 2 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

Autoridade da Concorrência - PORTUGAL 3 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

Autoridade da Concorrência - PORTUGAL 4 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

Autoridade da Concorrência - PORTUGAL 5 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). Basic Features of Merger Control

Autoridade da Concorrência - PORTUGAL 6 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; Basic Features of Merger Control

Autoridade da Concorrência - PORTUGAL 7 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

Autoridade da Concorrência - PORTUGAL 8 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

Autoridade da Concorrência - PORTUGAL 9 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

Autoridade da Concorrência - PORTUGAL 10 Specific features of the Law 39/ 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.” Portuguese Leniency Law An Effective Leniency Program

Autoridade da Concorrência - PORTUGAL 11 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.” Portuguese Leniency Law An Effective Leniency Program

Autoridade da Concorrência - PORTUGAL 12 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 investigation Procedures and Practices

Autoridade da Concorrência - PORTUGAL 13 Thank you