BACKGROUND
1. What is the relevant legislation containing the leniency policy and what is the enforcing body?
Law 39/2006 of 25 August 2006 enacted the legal regime on immunity or special reduction of fines to be granted by the Portuguese Competition Authority (the ‘Authority’) in proceedings for infringements of competition rules (the ‘leniency regime’). Before such enactment, the sole legal mechanism whereby the cooperation of undertakings in the investigation of competition law infringements could have an effect on the applicable sanction was the one set forth in article 44 of Law 18/2003 of 11 June 2003 (the ‘Competition Act’ or ‘the Act’), pursuant to which the degree of such cooperation with the Authority is considered when determining the amount of the fine.
The above regime has been complemented by Regulation 214/2006 of 22 November 2006, which sets out the leniency administrative procedure and which was enacted by the Authority pursuant to article 9 of Law 39/2006 and to article 7 of this latter’s statutes (enacted by Decree-Law 10/2003, of 18 January 2003, ‘the Statutes’).
Both immunity and reduction of fines are granted by the Authority (see article 1 of Law 39/2006).
2. What are the basic tenets of a leniency/immunity programme?
Law 39/2006 establishes that immunity or special reduction of fines may be granted by the Competition Authority in quasi-criminal minor offences’ (‘contra-ordenaçőes’) proceedings concerning agreements and concerted practices prohibited under article 4 of the Act and, if applicable, under article 81 EC treaty.
Immunity
Under article 4 of Law 39/2006, in order to obtain full immunity an applicant must:
The information and evidence to be provided must contain complete and precise information on the companies involved, the product or service concerned and the nature of the breach, its geographic scope and duration, and the manner in which it has been carried out.
Special reduction of fines
A reduction of fines may be granted if, at the time the information is provided, an investigation is already underway, but the Authority has not yet notified the cartel participants of the proceedings it has started. Only the first two leniency applicants can benefit, under the following terms (see articles 5 and 6 of Law 39/2006):
In both cases, the applicant must provide information that is decisive for the investigation and in proving the breach and comply with all the other conditions of an immunity applicant, except for being the first undertaking to apply before an investigation has begun.
In determining the amount of the reduction, the Competition Authority takes into account the leniency applicant’s contribution to the investigation and proving the breach.
Additional reduction of fines
A leniency applicant can obtain a special or an additional reduction in fines if it is the first to offer evidence relating to other restrictive agreements or practices that it is party to in the same or in another market. Evidence must be offered either before an investigation has begun, or after an investigation has begun but before the Competition Authority notifies the undertakings concerned of the proceedings it has started (see article 7 of Law 39/2006).
Members of the Board
Members of a company’s board of directors, either on behalf of their company or individually, can obtain immunity or reduction of fines on the same basis and under the same conditions as companies.
The decision to grant immunity or reduction of fines is made in the Authority’s final decision in antitrust proceedings.
3. How many cartels have been unveiled and punished since the adoption of the leniency policy?
There is still no public record of any decision punishing a cartel on the basis of information provided by a leniency applicant under Law 39/2006.
4. What is needed to be a successful leniency applicant? Is documentary evidence required or is testimonial evidence sufficient?
As stated, in order to benefit from full immunity, or from special or additional reduction of fines the applicant must, besides meeting the conditions specifically required for each of such cases:
The evidence to be provided shall be that found adequate and sufficient to prove the existence of the cartel and shall include both the documentary evidence which is attached to the leniency application and all other evidence, including testimonial, which may be appropriate for such purposes, in accordance with the obligation of full and continuous cooperation set out in Law 39/2006.
TIMING
5. What are the benefits of being ‘first in’ to cooperate?
As stated above, the first undertaking which provides information and evidence on a prohibited agreement or concerted practice before an investigation has begun may obtain full immunity from fines.
In case an investigation is already underway but the Authority has not yet notified the cartel participants of the proceedings it has started, the first applicant may be granted a minimum reduction of 50 per cent of the fine.
6. What are the consequences of being ‘second’? Is there an ‘immunity plus’ or ‘amnesty plus’ option?
As regards full immunity, as noted, only the first undertaking which provides information and evidence on a prohibited agreement or concerted practice before an investigation has begun may obtain full immunity from fines.
As for a special reduction of the fine, which, as stated, may be granted in cases where an investigation is already underway but the Authority has not yet notified the cartel participants of the proceedings it has started, the second applicant may benefit from a reduction of up to 50 per cent of the fine.
7. Are subsequent firms given any beneficial treatment if they make a useful contribution? How are ‘useful contributions’ defined?
Under Law 39/2006, full immunity, special or additional reduction of fines may only be granted to the first or to the second applicants under the abovementioned terms and conditions. The Law does not provide for the granting of leniency to subsequent ‘whistleblowers’. Nevertheless, in more general terms, under article 44 of the Competition Act the Authority, in determining the level of fine to apply to a competition law infringement, may take into account the degree of the concerned undertaking’s cooperation in the corresponding investigation.
SCOPE/FULL LENIENCY
8. Is it possible to receive full leniency? And, if so, what are the conditions required to receive full leniency?
Yes. As said a leniency applicant may receive full immunity if the conditions referred to in question 2 (‘Immunity’) above are met.
9. How many companies have received full immunity from fines to date?
As stated above, there is still no public record of any decision punishing cartel members on the basis of information provided by a leniency applicant under Law 39/2006. Accordingly no immunity or special or additional reduction of fines have been granted to date.
PROCEDURE/CONFIDENTIALITY
10. What are the practical steps required to apply for leniency?
As stated above, Regulation 214/2006 sets out the leniency administrative procedure, complementing Law 39/2006.
Under Regulation 214/2006, a leniency application must be made using the form included in Annex I to the Regulation and must be filed with the Authority by means of:
In special cases and upon reasoned request, the Authority may accept a simplified leniency application if the applicant has filed, or is filing, a leniency application with the European Commission and this latter is in the situation provided for in para 14 of the Commission Notice on cooperation within the network of competition authorities (2004/C 101/43).
However, if the Authority starts the investigation of the infringement, it shall request the applicant to complete the application within 15 days, in which case the request shall be deemed to have been made on the date the application was initially filed.
Following the filing of a leniency application, the Authority, on its own initiative or upon reasoned request, may grant the applicant 15 working days to complete the application with the missing evidence. If the request is completed within such period, the application shall be deemed filed on the date it was initially submitted.
Having analysed the file, the Authority shall inform the applicant of whether it considers that this latter fulfils the legal requirements for immunity or for special reduction of fines, or, if applicable, for the additional reduction of fines.
Immunity or reduction of fines shall only be granted if all requirements set forth In Law 39/2006 are fulfilled. The Authority shall notify the applicant in case it considers that the applicant no longer meets the requirements to be granted such immunity or reduction of fine.
11. Is there an optimal time to approach the regulatory authority?
For immunity purposes the Authority must be provided with information and evidence on a prohibited agreement or concerted practice before the corresponding investigation has begun.
As regards special reduction of fines the Authority may be approached after an investigation is already underway but before the Authority notifies the cartel participants of the proceedings it has started.
In what refers to additional reduction of fines, the evidence must be offered either before an investigation has begun, or after an investigation has begun but before the Competition Authority notifies the undertakings concerned of the proceedings it has started.
12. What guarantees of leniency exist if a party cooperates?
Leniency has been established by law. Accordingly, its provisions are binding upon all authorities concerned, notably the Authority and the Courts. There is, nevertheless, some degree of discretion in the assessment of the fulfilment of the legal requirements to grant immunity or reduction of fines, particularly in what refers to the evaluation of the level of full and continuous cooperation by the leniency applicant.
13. Is confidentiality afforded to the leniency applicant and other cooperating parties? If so, to what extent?
The decision to grant immunity or reduction of fines is taken in the final decision adopted in the antitrust proceedings which, as said, are quasi-criminal minor offence proceedings. Although so far no decisions have applied the leniency regime, it is foreseeable that such a decision will identify all the undertakings involved in the investigated agreement or concerted practice, including those that have applied for leniency, whether or not this has been granted. However, pursuant to the secrecy rules that apply to proceedings for quasi-criminal minor offences, the applicants’ identity, as well as that of the other undertakings involved, is not disclosed until a final decision in such proceedings is made.
Furthermore, the defence rights of the undertakings involved in antitrust proceedings include their access to all the evidence gathered by the Authority, notably that provided by leniency applicant(s).
CONSEQUENCES
14. What effects does leniency granted to a corporate defendant have on the defendant’s employees?
The leniency regime does not apply to employees insofar as, under the Competition Act, these latter are not personally liable for competition law infringements.
15. Does leniency bar further criminal or private enforcement?
Under article 42 of the Competition Act, infringements are considered quasi-criminal minor offences, without prejudice to any criminal liability which can arise from any behaviour, such as fraud and extortion, that may be associated to such infringement.
As stated above, Law 39/2006 establishes the regime for immunity or special reduction of fines that may be granted by the Competition Authority in quasi-criminal minor offence proceedings concerning agreements and concerted practices prohibited under article 4 of the Act and, if applicable, under article 81 EC.
Accordingly, a decision granting leniency only covers the quasi-criminal minor offences, and does not preclude the prosecution of acts qualified as crime under the relevant laws (notably the Portuguese Criminal Code), which might have been performed associated with the competition law infringement.
Likewise, the said decision shall not prevent any third party’s private damage claims.
RELATIONSHIP WITH THE EUROPEAN COMMISSION’S LENIENCY NOTICE AND LENIENCY POLICY IN OTHER EU MEMBER STATES
16. Does the policy address the interaction with applications under the Commission Leniency Notice? If so, how?
Pursuant to Regulation 214/2006 (which sets out the leniency administrative procedure) in particular cases and upon reasoned request the Authority may accept a simplified leniency application if the applicant has filed, or is filing, a leniency application with the European Commission and this latter is in the situation provided for in para 14 of the Commission Notice on cooperation within the network of competition authorities (2004/C 101/43).
17. Does the policy address the interaction with applications for leniency in other EU member states? If so, how?
Pursuant to Regulation 214/2006, in the leniency application the applicant must identify other jurisdictions where a leniency application was, or is being, filed, regarding the same infringement.
REFORM/LATEST DEVELOPMENTS
18. Is there a reform underway to revisit the leniency policy? What are the latest developments?
The Portuguese leniency regime has been enacted by Law 39/2006 of 25 August 2006, and subsequently complemented by Regulation 214/2006 of 22 November 2006. Currently, there are no further reform proposals.
