Merger Controls First Edition - J Sagar Associates

Marques Mendes & Associados Portugal
On the other hand, there is no publicly available information on any appeals lodged against the PCA’s merger control
decisions, either filed with the Lisbon Court of Commerce, which remains the exclusive appellate instance of the PCA’s
decisions in most of the country, or with the sections of commerce of the territorially competent courts, which are competent
in the areas where the new regime on organisation and functioning of the judicial courts is already in force (for a
comprehensive description of the judicial review regime of the PCA’s decisions, see below under “Approach to remedies”).
Key industry sectors reviewed, and approach adopted, to market definition, barriers to entry, nature of
international competition etc.
The Competition Act is applicable to all economic activities, be they permanent or occasional, in the private, public and
cooperative sectors. There are no provisions relating to specific sectors, other than the indication that, prior to the adoption
of a decision within a merger control procedure in a regulated sector, the PCA shall request from the corresponding
regulatory authority its position on the notified operation (Article 39(1) of the Competition Act). Such powers do not
interfere with the regulatory authorities’ own legally attributed powers (Article 39(2) of the Competition Act).
Therefore, provisions influencing, directly or indirectly, merger operations in specific sectors can only be found in the
concerned area’s legislation. The more relevant provisions may be found as regards utilities such as water, mail, railways
and seaports, natural gas and electricity, the defence industry, the media, credit institutions and financial companies, and
insurance and reinsurance companies.
On the other hand, PCA representatives have often highlighted5 the sectors of energy, telecoms, fuel, banking services and
harbours as the main concern of the institution, having directly attributed a persisting lack of competitiveness of the
Portuguese companies to the high prices in those sectors.
The PCA’s particular concern with competition in the energy sector was clear in two recent procedures: the EDP
Produção6 /Greenvouga7 case8 and the Bencom9 /BP fuel business in Azores10 case11 .
In what concerns the first case, the anticompetitive concerns raised by the proposed acquisition by EDP Produção of the
exclusive control of Greenvouga, led the notifying party to offer to the PCA certain commitments regarding the Ribeiradio-
Ermida hydroelectric complex. Having considered that such commitments would suffice to guarantee that effective
competition would be preserved in the market for secondary regulation band in mainland Portugal, the PCA cleared the
transaction with conditions and obligations on 13 December 2010.
With regards to the proposed acquisition of the exclusive control over the BP fuel business in the Azores islands by Bencom,
in view of anticompetitive concerns raised by the operation in the market for the provision of white products in São Miguel
island, Bencom proposed certain commitments to the PCA, which this latter deemed sufficient to guarantee the maintenance
of effective competition in the relevant markets (the retail market for fuel for road transport in São Miguel island, and the
market for storage of white products in São Miguel island). These commitments involve divestment of assets and notably
consist of freeing storage capacity and maintaining the fees for storage of white products unchanged until the planned
deactivation of the Sta. Clara Terminal (which is explored by Bencom and constitutes one of the sole establishments
currently able to store white products addressed to São Miguel island) comes to pass. As a result, the PCA cleared the
operation with conditions and obligations on 8 February 2011.
Key economic appraisal techniques applied
Concentrations falling within the scope of the Competition Act shall be forbidden if they “create or reinforce a dominant
position in the national market, or in a substantial part of it, that results in significant impediments to effective competition”
(Article 12(4) of the Competition Act).
Besides this basic substantive test, the main criteria for the appraisal of concentrations essentially follow the approach in
the former Community merger regulation (Regulation (EEC) No. 4064/89, as amended). Accordingly, pursuant to the
Competition Act, notified concentrations shall be appraised to determine their effects on the competition structure, having
regard to the need to preserve and develop effective competition in the Portuguese market, in the interests of users and
consumers (Article 12(1) of the Competition Act). The PCA’s substantive appraisal takes into account a number of factors
including: (i) the structure of the relevant markets; (ii) the position in the market of the undertakings concerned and their
economic and financial power; (iii) the existence of barriers to entry; (iv) the alternatives available to suppliers and users;
(v) the conditions of access of the undertakings to supply and to downstream markets; (vi) the supply and demand trends
for relevant goods or services; and the (vii) contribution of the operation to the international competitiveness of the
Portuguese economy (Article 12(2) of the Competition Act).
In the reference period (January 2010 – August 2011), no significant developments occurred, as all merger operations
were cleared in Phase I except for the Essilor12 /Shamir13 case14 .
This latter case is instructive since it provides a good example of the standard merger control assessment performed by
the PCA within a horizontal merger, notably when a Phase II investigation is carried out.
After having defined the relevant market (identified as the Portuguese market for the finishing and wholesale distribution
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