Competition Authority sets the record straight on erroneous report in Correio da Manhã

1. In its edition of 17 September 2011, the newspaper “Correio da Manhã” published a full page report under the heading “Competition Authority waives banking fine of 14.4 million”. The front page also carried the headline “Sebastião forgives the banks a sum of millions”.

2. The report contains assertions that fail to reflect the truth and, thus, misinform the newspapers’ readers, as it draws false/hasty conclusions that affect the image, credibility, reputation and good name of the Competition Authority and its president, and of Portugal itself. Accordingly, it is important to re-establish the truth of the matter. Besides the present press release, the Competition Authority intends to exercise its due right of reply in the newspaper “Correio da Manhã”.

3. The headlines do not reflect the truth: the CA has not “forgiven” any fine at all, since it does not have the power to “forgive” fines imposed – such powers belong exclusively to the courts – and, moreover, no “fine” has been imposed in the first place, to be forgiven.

4. The report states that the “pardon” took place after “it was proven that SIBS, the body managing the Multibanco system, and Unicre, the body responsible in Portugal for the trademarks Visa, Visa Electron, MasterCard and Maestro, devised strategies to distort or restrict competition”. This assertion reflects a lack of specialist knowledge of the structure of a court case: it relies on what it calls a “notice of prosecution”, though the technical term is “notice of illicitude”. This does not correspond to a final ruling, whichever way it goes: punishment or closure of the case.

5. In all proceedings, the prosecution’s case is followed by the defence and, possibly, the production of new evidence. This may be requested by the defendant, or required by the CA on its own initiative.

6. It was as a result of the production of the defence by the defendants, based essentially on the tendencies revealed by Lisbon Commercial Court in earlier pronouncements on CA decisions, that the Competition Authority decided to discontinue the case. It considered that the elements of the case to which each one of the defendants could have access (UNICRE and SIBS), by prior decision of the court, would not allow the breach of the law to be proved.

7. It is to be stressed, moreover, that the journalist who wrote the report, Miguel Alexandre Ganhão, had already made a judgment on the existence of this evidence, before even consulting the CA on the facts in question, since, before hearing the CA, the journalist asked about “the fate assigned to Case 2004/34, which proved that SIBS/Unicre restricted or distorted competition, and were thus involved in a very serious breach of Article 4 of the Competition Act”. This well illustrates the fact that the focus of the news story was not to report the truth.

8. The report also betrays a lack of accuracy in the research when it states that the fine imposable on the defendants could never be less than 14.4 million euros and that it would be “one of the highest levied in this country”.

9. As a matter of fact, the law does not lay down minimum limits for the fines to be levied, but rather only very general criteria for the establishment of the actual amount. This fact was omitted by the journalist, though he could not have failed to know it.

10. The statement that this fine would be “one of the highest levied in this country” merely reveals ignorance of the CA’s activities, since, in similar cases in the past, the authority has imposed fines of 38 and 54 million euros.

11. The report insinuates that the Competition Authority Council decided to close the case despite the formal opinion of the investigators. This is false. The journalist must be acquainted with it, given that he quotes the decision.

12. The report also states that the president of the CA “defended” himself in the replies that he gave to “Correio da Manhã”. It is not true that the president of the CA “defended” himself, since the president of the CA does not have to “defend himself” for strictly applying the law. However, the CA registers the fact that the “defence” referred to in the report is compatible with any “attack” on the CA by “Correio da Manhã”.

13. Furthermore, the assertion in the final part of the report simply observes a fact that is crystal clear: the case was opened in 2004 by the first CA Council, under the presidency of Prof. Abel Mateus, who was in office between 2003 and 2008; unable to conclude it in 4 years, he left the decision for the council that was subsequently appointed.

14. Finally, the Competition Authority considers it opportune to inform the public that it is still closely monitoring the payment card issue, not only at the national level, with the Bank of Portugal, but also at the European level, so as to be in a position to follow up what is adopted as the European Commission’s set of guidelines and what is adopted as European case law in the MasterCard case, which is currently before the General Court. Given the complexity of the issue, the Competition Authority wholeheartedly shares the opinion recently expressed by the European Commissioner for Competition, Mr Joaquin Almunia, according to which, on the subject of payment cards, a “well thought-out combination of competition and regulation” should be promoted.

Lisbon, 19 September 2011