Cooperating parties

Immunity

Is there an immunity programme? If so, what are the basic elements of the programme? What is the importance of being ‘first in’ to cooperate?

The Competition Act, Law No. 19/2012 of 8 May (the Act) establishes the leniency rules in article 75 et seq In addition, Competition Authority (Autoridade da Concorrência – the AdC) has adopted Regulation No. 1/2013 of 3 January 2013, which sets out the leniency administrative procedure.

Under the Act, the AdC can grant immunity or reduction of fines in procedures for quasi-criminal minor offences that concern agreements and concerted practices between competitors prohibited by article 9 of the Act and (where applicable) article 101 of the Treaty on the Functioning of the European Union (TFEU), which are aimed at coordinating the competitive behaviour of the undertakings or at influencing relevant competitive conditions.

To obtain full immunity, an applicant must:

  • be the first undertaking to inform the AdC of its participation in an agreement or a concerted practice, as long as it provides information and evidence that, in the AdC’s discretion, enables the regulator:
    • to substantiate a request for searches or seizure of data, provided that the AdC, at the time the information and evidence are submitted, does not have sufficient elements to perform such acts; or
    • to establish the existence of an infringement, provided that, at that moment, the AdC does not have sufficient evidence of the infringement available;
  • cooperate fully and continuously with the AdC from the moment of the initial request by:
    • providing all data and evidence already obtained or to be obtained in the future;
    • responding immediately to any request for information;
    • avoiding acts that may endanger the investigation; and
    • not informing the other participants in the concerted practice;
  • put an end to its participation in the infringement before it provides the AdC with the information and evidence, except as reasonably required, in the AdC’s opinion, to preserve the investigation effectiveness; and
  • not have coerced other undertakings to participate in the breach.

 

The information and evidence to be provided must contain complete and precise information on:

  • the agreement or concerted practice;
  • the undertakings involved, including the objectives, activity and ways of operation;
  • the product or service concerned; and
  • the geographical scope, the duration and the manner in which the breach has been carried out.
Subsequent cooperating parties

Is there a formal programme providing partial leniency for parties that cooperate after an immunity application has been made? If so, what are the basic elements of the programme? If not, to what extent can subsequent cooperating parties expect to receive favourable treatment?

Under the leniency rules set forth in the Act, the AdC can grant immunity from or a reduction of fines.

The AdC shall grant a reduction of fines to undertakings which, not being eligible to immunity, submit information and evidence that adds significant value to those already in the possession of the AdC and provided the conditions are met regarding cooperation with the AdC and putting an end to the infringement.

Going in second

How is the second cooperating party treated? Is there an ‘immunity plus’ or ‘amnesty plus’ treatment available? If so, how does it operate?

As regards full immunity, only the first undertaking to provide information and evidence may obtain full immunity from fines.

Concerning the reduction of the fine, the corresponding level of reduction is determined by the AdC as follows:

  • a reduction from 30 to 50 per cent granted to the first undertaking that provides information and evidence;
  • a reduction from 20 to 30 per cent granted to the second undertaking that provides information and evidence; or
  • a reduction of up to 20 per cent granted to the subsequent undertakings that provide information and evidence.

 

In fixing the fine, the AdC shall take into account the order of submission of the information and evidence, as well as their added value for the investigation. If a leniency application is submitted after the notification of the statement of objections the above reduction limits are reduced by half.

There is currently no ‘immunity plus’ or ‘amnesty plus’ option.

Approaching the authorities

Are there deadlines for initiating or completing an application for immunity or partial leniency? Are markers available and what are the time limits and conditions applicable to them?

There is no specific deadline for immunity or partial leniency applications, but an undertaking that wishes to take advantage of the leniency programme should approach the AdC as early as possible. It is possible to obtain a marker securing the applicant's position in relation to other possible applicants. Upon receipt of a written or oral application for immunity or reduction of a fine, the AdC may, on its own initiative or upon reasoned request, grant a marker to the applicant establishing a period of up to 15 days for the applicant to complete their application.

Cooperation

What is the nature, level and timing of cooperation that is required or expected from an immunity applicant? Is there any difference in the requirements or expectations for subsequent cooperating parties that are seeking partial leniency?

An equivalent level of cooperation applies to all leniency applicants and they must cooperate fully and continuously with the AdC from the moment of the initial request, notably by:

  • providing all data and evidence already obtained or to be obtained in the future;
  • responding immediately to any request for information;
  • avoiding acts that may endanger the investigation; and
  • not informing the other participants in the concerted practice.

 

The applicants must also put an end to their participation in the infringement, except as reasonably required, in the AdC’s opinion, to preserve the investigation effectiveness.

Confidentiality

What confidentiality protection is afforded to the immunity applicant? Is the same level of confidentiality protection applicable to subsequent cooperating parties? What information will become public during the proceedings and when?

The AdC shall classify as confidential the leniency application as well as the documents and information provided by the applicant.

The rules apply to both full (immunity) and partial (reduction of fines) leniency.

For the purpose of preparing the observations in response to the statement of objections, a concerned undertaking shall be granted access to the leniency application and to the related documents and information by the AdC. However, the concerned undertaking shall not be allowed to make copies of such elements unless authorised by the leniency applicant. Third parties’ access to the leniency application and to the related documents and information shall require the leniency applicant’s consent, without prejudice to the right of access under the terms established in the Damages Act. The Damages Act has introduced amendments to the Act in respect of confidentiality applicable to leniency applications. In any event, leniency statements (regarding an exemption from or reduction of the fine) are protected.

The concerned undertaking shall not be granted access to copies of its oral statements and third parties shall have no access to them.

Settlements

Does the investigating or prosecuting authority have the ability to enter into a plea bargain, settlement, deferred prosecution agreement (or non-prosecution agreement) or other binding resolution with a party to resolve liability and penalty for alleged cartel activity? What, if any, judicial or other oversight applies to such settlements?

Under the Portuguese leniency regime, the AdC is not granted the power to enter into arrangements such as plea bargains or similar agreements. Settlements are permitted under the terms described above, and a reduction in fine granted in leniency proceedings is added to the reduction granted in the settlement proceedings. In its most recent cartel decisions, the AdC, in determining the amount of the fines, took into account the cooperation of the companies during the investigation through the use of both the leniency regime and the settlement proceedings. The facts confessed by a concerned undertaking in a settlement procedure cannot be subject to judicial review for the purposes of any appeal.

Corporate defendant and employees

When immunity or partial leniency is granted to a corporate defendant, how will its current and former employees be treated?

Individuals and employees of an undertaking who are responsible for the direction or surveillance of the area of activity in which an infringement occurred, may be granted immunity or reduction of fines if they fully and continuously cooperate with the AdC, even if they have not requested such benefits.

Dealing with the enforcement agency

What are the practical steps for an immunity applicant or subsequent cooperating party in dealing with the enforcement agency?

Regulation No. 1/2013 sets out the leniency administrative procedure.

Under Regulation No. 1/2013, a leniency request is made by means of an application addressed to the AdC and must include:

  • the object of the application, specifying whether it is a request for immunity or for a reduction in fine, or both;
  • the identification of the applicant, the capacity in which the application is filed (ie, a company or the members of its board of directors or equivalent entities, or the individuals responsible for the management or supervision of the sector of activity concerned in the infringement) and the corresponding contacts;
    • legal entities must include the identification of the current members of the board of directors, as well as of the members of such board during the duration of the infringement;
  • detailed information on the alleged cartel;
  • the identification and contact details of the undertakings involved in the alleged cartel, as well as of the current members of their boards of directors and of the members of such boards during the duration of the infringement;
  • identification of other jurisdictions where a leniency application has been filed in respect of the same infringement; and
  • other information deemed relevant for the request for immunity or reduction of the fine.

 

Together with the leniency application, the applicant shall submit all the evidence in its possession or under its control.

The leniency application must be submitted at the AdC’s head office by any means, notably:

  • fax (to +351 21 790 20 93/30);
  • postal mail addressed to the AdC’s head office;
  • email sent to the address [email protected] with an electronic signature; or
  • hand delivery, notably in a meeting with the AdC’s services in charge of the investigation.

 

Submission of a written application can be replaced by oral statements made in a meeting with the AdC’s services in charge of the investigation. Such statements shall be accompanied by all the evidence in the possession of or under the control of the applicant. The statements shall be recorded in the AdC’s head office with an indication of their time and date. Within the time frame established by the AdC, the applicant confirms the technical accuracy of the recording and, if necessary, corrects the statements. In the absence of any comment from the applicant, the recording is considered approved by the applicant. The transcription of the statements must be complete and accurate and shall be signed by the applicant.

The request for immunity or reduction of fine shall be deemed made on the date and at the time of its receipt at the AdC’s head office. The AdC shall provide a document confirming receipt of the application and the date and hour of its submission.

In special cases and upon a reasoned request, the AdC may accept a simplified leniency application if the applicant has filed, or is filing, a leniency application with the European Commission and the Commission is in the situation provided for in the Commission Notice on cooperation within the network of competition authorities (2004/C 101/03). The application shall, in these cases, be made in Portuguese or English according to the form attached to Regulation No. 1/2013 or by oral statements. The AdC shall provide a document confirming the receipt of the simplified application and the date and hour of its submission. If the AdC starts an investigation of the infringement, it shall request that the applicant completes the application within a time frame of at least 15 days, which, if applicable, shall include a Portuguese translation of a simplified application filed in English. If the application is not completed or the Portuguese translation is not filed within the established deadline, the application shall be refused. If an application is filed only for the purposes of immunity and this latter is no longer available, the AdC shall inform the applicant that the application may be withdrawn or completed for the purposes of reduction of the fine. If the applicant completes the application within the established deadline, the request shall be deemed to have been made on the date and hour the application was initially filed.

Upon receipt of a written or oral application for immunity or reduction of fine, the AdC may, on its own initiative or upon reasoned request, grant a marker to the applicant establishing a period of at least 15 days for the completion of the application by the applicant. To benefit from the marker, the applicant must indicate in the application:

  • its name and address;
  • information on the alleged cartel, and on the products, services and territory affected;
  • an estimate of the duration of the alleged cartel;
  • whether other applications for immunity or reduction of fines have been filed or are planned to be filed with other competition authorities regarding the alleged cartel; and
  • the justification for the marker.

 

If the applicant completes the application within the established deadline, the request shall be deemed to have been made on the date and hour the application was initially filed. If the application is not completed, the application shall be refused. Following an analysis of the application, the AdC shall notify the applicant if it considers that the requirements for immunity are not met, in which case the applicant may, within 10 days of such notification, withdraw the application or request the AdC that this latter is considered for the purposes of reduction of the fine.

As regards an application for reduction of a fine, if the AdC considers, on a preliminary basis, that the information and evidence submitted by the applicant add significant value to that already in its possession, it shall inform the applicant of its intention to grant a reduction of the fine, indicating the level of the applicable reduction. The aforementioned rules governing the application for immunity or reduction of fine apply. If the AdC considers, on a preliminary basis, that the information and evidence submitted by the applicant do not add significant value to those already in its possession, it shall notify the applicant, in which case this latter may, within 10 days of such notification, withdraw the application.

Immunity or reduction of fines shall only be granted if all the requirements set forth in the Act are fulfilled. The final decision on immunity or reduction of fines shall be taken in the final decision of the procedure adopted by the AdC at the end of the investigation.