In brief: the key features of merger control legislation in Portugal

Legislation and jurisdiction

What is the relevant legislation and who enforces it?

Merger control is governed by Law No. 19/2012 of 8 May 2012 (the Act), which enacted the current Portuguese competition legal regime, superseding the previous regime enacted by Law No. 18/2003 of 11 June 2003, as amended.

Decree-Law No. 125/2014 of 18 August 2014 adopted and approved the current statutes of the Competition Authority (the Authority).

The Authority is entrusted with the mission of implementing competition rules, including those on merger control. It is a public entity endowed with administrative and financial autonomy, management autonomy and organic, functional and technical independence. It has been granted statutory independence for the performance of its activities, without prejudice to certain acts that are subject to ministerial approval (eg, the budget, the multi-annual plan and the management report and the accounts, including the balance sheet). The member of government in charge of economic affairs (currently the minister of economy) may also be called to intervene in merger control proceedings through an extraordinary appeal.

Without prejudice to the competence of the government in respect of competition policy, the members of the Board of the Authority shall be heard by the relevant parliamentary committee, whenever they are requested for such purposes, to provide information or clarification on their activities and on competition policy matters.

The Code of Administrative Procedure applies on a subsidiary basis to the procedure to be followed in the area of mergers.

The Code of Procedure in Administrative Courts applies on a subsidiary basis to the judicial review of the Competition Authority’s administrative decisions, including merger control.

The General Regime on Quasi-criminal Minor Offences (enacted by Decree-Law No. 433/82 of 27 October 1982) applies on a subsidiary basis to the sanctioning procedure and decisions, and to their judicial review.

What kinds of mergers are caught?

Portuguese competition law applies to mergers that occur in Portuguese territory or that may have an effect within it. A concentration is deemed to exist when a lasting change of control over the whole or part of an undertaking occurs, as a result of the following situations:

• two or more previously independent undertakings or parts thereof merge;
• one or more persons or undertakings who already have control of at least one undertaking acquire control, directly or indirectly, of the whole or parts of the capital stock or of assets of one or several other undertakings; or
• two or more persons or undertakings create a joint venture that is intended to perform on a lasting basis the functions of an autonomous economic entity.

However, a concentration does not exist in the case of:

1. an acquisition of shareholdings or assets by an insolvency receiver in the framework of an insolvency procedure;
2. the acquisition of a shareholding merely as a guarantee; or
3. the acquisition by credit institutions, financial companies or insurance companies of shareholdings in undertakings with a corporate object that differs from that of any of those three types of companies, when the acquisition is made with a mere temporary nature and for resale purposes.

Regarding point (3), the concentration does not exist as long as:

• the acquisition is not made on a lasting basis;
• the voting rights associated with the acquired shareholdings are not exercised with the purpose of determining the competitive behaviour of the concerned undertakings or are solely exercised with the purpose of preparing the total or partial transfer of such undertakings, the assets thereof or the acquired shareholdings; and
• such transfer occurs within one year of the date of acquisition (which may be extended by the Authority if the acquirers show that the transfer was not possible within such period because of reasons worthy of consideration).

What types of joint ventures are caught?

Merger control provisions apply to joint ventures that are intended to perform on a lasting basis the functions of an autonomous economic entity (full-function joint ventures).

Is there a definition of ‘control’ and are minority and other interests less than control caught?

Under the Act, ‘control’ is any act that confers the ability to exert on a lasting basis, separately or jointly, a decisive influence, in the given legal and factual circumstances, on the activities of an undertaking.

In particular, it is the case of the acquisition of the whole or part of the capital, the acquisition of ownership or of the right to use or enjoy the whole or part of the assets of an undertaking, or the acquisition of rights or the conclusion of contracts that confer a decisive influence on the composition or on the decisions of the corporate bodies of an undertaking.

So far, nothing has been provided for outside the above boundaries.

What are the jurisdictional thresholds for notification and are there circumstances in which transactions falling below these thresholds may be investigated?

Concentrations are subject to prior notification if one of the following conditions occurs:

• as a result thereof, a share equal to or higher than 50 per cent of the national market for a particular good or service or for a substantial part of it is acquired, created or reinforced;
• as a result thereof, a share equal to or higher than 30 per cent and lower than 50 per cent of the national market for a particular good or service or for a substantial part of it is acquired, created or reinforced, provided that in the preceding financial year the individual turnover in Portugal, net of directly related taxes, of at least two undertakings taking part in the concentration exceeds €5 million; or
• in the preceding financial year, the group of undertakings taking part in the concentration have recorded in Portugal a turnover exceeding €100 million, net of directly related taxes, provided that the individual turnover in Portugal of at least two of these undertakings exceeds €5 million.

In addition, two or more concentrations made within a period of two years among the same individuals or legal entities, which considered individually would not be subject to prior notification, are deemed to be a sole concentration subject to such prior notification when the set of concentrations reaches the turnover figures set out above.

Several rules on the calculation of both market share and turnover are established in the Act.

Only concentrations that meet one of the above conditions and that are therefore subject to prior notification may be investigated under the merger control rules. Concentrations that do not meet any of those conditions may, nevertheless, be investigated as restrictive practices.

Is the filing mandatory or voluntary? If mandatory, do any exceptions exist?

Notification to the Competition Authority is mandatory where the statutory thresholds are met. No exceptions are admitted.

Do foreign-to-foreign mergers have to be notified and is there a local effects or nexus test?

The Act applies to mergers that occur in Portuguese territory or that have or may have an effect within it. Accordingly, foreign-to-foreign mergers that have or may have effects within the Portuguese territory (ie, those where the statutory thresholds are met) are subject to the Act.

Are there also rules on foreign investment, special sectors or other relevant approvals?

The Act is applicable to all economic activities, be they permanent or occasional, in the private, public and cooperative sectors. There are no provisions in the Act relating to specific sectors, other than the indication that the Competition Authority’s powers over concentrations in regulated sectors are exercised in cooperation with the corresponding regulatory authorities, from which the Authority, prior to the adoption of a decision within a merger control procedure in the corresponding sector, shall request the position on the notified operation. Such powers do not interfere with the regulatory authorities’ own legally attributed powers.

In the cases of concentrations in the media sector (newspaper, news, television or radio companies), a negative opinion of the Portuguese Regulatory Authority for the Media is binding upon the Authority to the extent that it is grounded on risks to the freedom of expression and to the plurality of opinions.

Provisions influencing, directly or indirectly, mergers in specific sectors may also be found in the concerned area’s legislation.

With reference to companies, which, by law, are in charge of the management of services of general economic interest, or companies that have the nature of a legal monopoly, they are subject to the provisions of the Act to the extent that the application of such rules does not constitute an obstacle to the fulfilment of the particular mission with which they have been entrusted.

In other contexts too, merger operations must comply notably with the relevant provisions of the Commercial Companies Code and with the applicable rules of the Securities Code.