Merger Controls First Edition - J Sagar Associates

Marques Mendes & Associados Portugal
of ophthalmic lenses), the PCA analysed the market shares of the parties and of their main competitors, having concluded
that although there was a market decrease trend over the last three years, both parties increased their market shares in the
same period. Upon completion of the operation, Essilor was estimated to obtain a market share of over 60% in the
Portuguese market for the finishing and wholesale distribution of ophthalmic lenses.
The PCA then assessed the structure of the market, having ultimately concluded that, despite the very high market share
arising from the operation, the transaction would not raise significant anticompetitive concerns, based on the existence
both of an effective competitive pressure from the other competitors and of a significant countervailing buying power in
the market. As a result, the PCA cleared the proposed transaction on 7 April 2011 without any conditions or obligations
attached.
Also worth mentioning in the reference period is the Ongoing/Vertix/Media Capital case15 , which ended in a prohibition
decision following an adverse opinion issued by the media regulator, the ERC, which is binding on the PCA.
The concentration was to be effected by means of the acquisition by Ongoing of shares representing up to 35% of Media
Capital’s share capital and based on a shareholders’ agreement to be executed by Ongoing and Vertix.
As required by law, the PCA requested both the ERC and the electronic communications regulator, the ICP-ANACOM,
to issue their opinions on the notified operation. The ICP-ANACOM considered that the concentration would not entail
any strengthening of Ongoing’s market share in the electronic communications markets. Nonetheless, the ERC opposed
to the notified concentration as long as Ongoing held 1% or more of the share capital of Impresa, a media group competitor
of Media Capital.
In the face of such adverse opinion issued by the ERC, which, under the law and grounded on the public interest of the
safeguard of media diversity and pluralism, is binding on the PCA, the concentration could not be cleared, regardless of
its competition assessment, having been formally prohibited on 30 March 2010.
Approach to remedies (i) to avoid second stage investigation and (ii) following second stage investigation
No significant developments occurred in the reference period (January 2010 – August 2011).
In the EDP Produção/Greenvouga case, the PCA accepted the commitments proposed by EDP Produção, having cleared
the operation with conditions and obligations aimed at preserving effective competition in the market for the secondary
regulation band in mainland Portugal. Likewise, in the Bencom/BP fuel business in Azores case the PCA also considered
that the undertakings proposed by Bencom would be sufficient to guarantee the maintenance of effective competition in
the retail market for fuel for road transport in São Miguel island and in the market for storage of white products in São
Miguel island (for a more comprehensive description of both cases, see above under “Key industry sectors”).
In general, the PCA has displayed a certain favour for a “negotiated” approach with the parties, which may also be justified
in view of the importance attributed by the PCA to a positive exposure of its activity in the media.
Key policy developments
Following public consultation, the Authority finally issued its Guidelines on Merger Remedies on 28 July 2011, whose
objective is to provide guidance regarding the selection, definition, implementation and monitoring of remedies within
merger control procedures, with the purpose of both guaranteeing transparency, efficiency and swiftness to these procedures
and strengthening legal certainty.
According to the document, the Authority took notably into account in the drafting of its Guidelines on Merger Remedies (i)
the European Commission Notice on remedies acceptable under Council Regulation (EC) No 139/2004 and under Commission
Regulation (EC) No 802/2004 (2008/C 267/01), (ii) the UK’s Competition Commission Notice “Merger Remedies: Competition
Commission Guidelines”, (iii) the Merger Control Guidelines of France’s Direction Générale de la Concurrence, de la
Consommation et de la Répression des Fraudes, and (iv) the principles identified by the International Competition Network
and contained in “ICN’s Merger Remedies Project – Report for the fourth ICN annual conference” of June 2005.
After providing a definition of merger remedies, the Authority’s Guidelines (i) identify the requirements to be met in the
selection of remedies, defining, notably, the principles applicable to the risk assessment, to the monitoring trustee and to
the divestiture trustee, (ii) address the different types of remedies, structural remedies or remedies related to the future
behaviour of the merged entity, as well as their requirements and objectives, (iii) deal with procedural aspects, (iv) set the
guidelines for change of remedies, and (v) indicate the consequences of the failure to comply with the remedies, notably
focusing on the breach of conditions or of obligations. The Guidelines also contain templates regarding (i) undertakings
assumed before the Authority, (ii) divestment orders, and (iii) monitoring terms.
Reform proposals
Under Law No. 52/2008 of 22 August 2008, which carries out a comprehensive reform of the organisation and functioning
of judicial courts and amends the provisions of the Competition Act, establishing the courts that are competent to handle
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