Portuguese Competition Authority dismantles cartel of paper envelopes

Press Release 24/2016

Portuguese Competition Authority dismantles cartel of paper envelopes

The Portuguese Competition Authority (AdC) dismantled a five-member cartel of paper envelopes producers and distributors, and imposed a fine of €160.000,00 on the company Firmo Papéis e Papelarias, S.A.

The investigation undertaken by the AdC revealed that, between 2007 e 2010, five companies concerted their behaviour in the Portuguese market of paper envelopes, allocating clients among them and fixing prices, restricting and distorting competition to a considerable extent in response to tenders launched by customers.

In particular, the undertakings coordinated their responses to clients´ tenders, aligning offering prices in order to artificially determine the winner of each tender.

The companies Copidata, S.A. and Tompla – Indústria Internacional do Envelope, Lda. (within the same economic group) received full immunity in exchange for revealing the existence of the cartel and providing sufficient information that enabled the AdC to prove the cartel infringement.

The undertaking Papelaria Fernandes was also sanctioned, but the absence of business turnover prevented the setting of a fine.

A fifth undertaking had been fined by the AdC in May 2016, with the amount of € 440.000,00 for participating in the same cartel.

Under the Portuguese leniency programme, in order to obtain total immunity a company which participated in a cartel must be the first one to inform the AdC of an undetected cartel and provide sufficient information to allow an investigation. Companies may also benefit from a reduction of the fine if they provide evidence.

However, total immunity is only granted if the company did not take steps to coerce other undertakings to participate in the cartel, if they put an end to the infringement immediately and fully cooperate with the investigations, namely by providing evidence or information.

In the cartel of paper envelopes case, the use of the leniency programme proved to be essential, on the one hand, for the finding, establishment and sanctioning of the anticompetitive practices under review, and on the other hand, for the simplification and efficiency of the proceedings.

The decision adopted by the AdC closes the investigation opened on 12 September 2011.

On 26 February 2015, the AdC undertook a dawn raid to several premises of all undertakings involved.

The fight against cartels is given maximum priority by the AdC, taking into account the losses that they invariably cause to consumers and businesses, leading to higher prices and reduced quality and variety of goods and services. The infringement of competition rules not only reduces consumer welfare, but also weakens the companies´ competitiveness, undermining the economy as a whole.

6 December 2016