I. The Competition Authority's Ruling
Following an enquiry opened as a result of a complaint, the Competition Authority has found the Lisbon Breadmakers' Association (LBA) guilty of contravening Article 4 of Law No. 18/2003 of 11 June. More specifically, the LBA adopted a 'decision by an association of undertakings' for the purpose of preventing, restricting or distorting competition, by means of the exchange of information on prices. The CA has imposed a fine of € 1,177,429.30.
The Competition Authority ascertained that, between 2002 and 2005, the LBA operated a system for exchanging information with its associates on the pricing of bread sales to the public, in order to “directly or indirectly fix purchase or selling prices or interfere with their establishment by free market forces, thus causing them artificially either to rise or fall”. In setting the fine, in pursuance of the law applicable, the CA considered the aggregated turnover of the 14 associated undertakings that took part in the unlawful behaviour: this amounted to a total of € 17,661,442.87.
With this conduct, the LBA promoted distortion of the free operation of the market for bread sales to the final consumer. This represents a serious breach of the rules for the protection of competition in a basic sector, that of essential foodstuffs, that has merited the Competition Authority's particular attention In effect, according to the statistical indicators provided by the INE (National Institute of Statistics), it can be seen that, in the Foodstuffs and Non-Alcoholic Beverages category, the subgroup “bread and cereals” registered the highest rise in prices in the period covered by the Competition Authority's ruling against the LBA. Appeal against the Competition Authority's decision falls under the jurisdiction of Lisbon Commercial Court, in accordance with Article 50 (1) of Law No. 18/2003 of 11 June.
II. Explanation for enterprises, economic agents and consumers
For a better understanding of this matter, the Council of the Competition Authority has provided the following explanations: