AdC fines subsidiaries of EDP and SONAE for illegal non-compete agreement

Press Release 5/2017
 
AdC fines subsidiaries of EDP and SONAE for illegal non-compete agreement
 
 
The Portuguese Competition Authority (Autoridade da Concorrência, AdC) has imposed fines on the total amount of 38.3 million euros on EDP – Energias de Portugal, S.A., EDP Comercial – Comercialização de Energia, S.A., Sonae Investimentos, SGPS, S.A., Sonae MC – Modelo Continente SGPS, S.A. and Modelo Continente Hipermercados, S.A. for having entered into an anticompetitive agreement within the partnership created for the commercial campaign "Plano EDP Continente", in 2012.
 
The infringement concerns the agreement entered by the addressees, where Sonae and EDP agreed not to compete on the sector for distribution of electricity in mainland Portugal for a period of 2 years.
 
The Portuguese Competition Act explicitly forbids agreements between companies which, by having as their object the restriction of competition to a considerable extent, in the whole or in part of the domestic market, have, by their very nature, a high potential for negative effects, reducing consumer welfare and undermining companies´ competitiveness and the economy as a whole.
 
The case was originated by consumer complaints, and the practice occurred in the context of the liberalization of distribution of electricity and natural gas in Portugal, a particularly relevant moment for competition in the sector.
 
To calculate the amount of the fines, the AdC considered the criteria established by article 69 of the Portuguese Competition Act, the Guidelines on the method of setting fines, as well as the companies’ business turnovers.
 
The total amount of the fine of 38.3 million euros, calculated according to the companies’ business turnovers, is detailed as follows:
 
           EDP – Energias de Portugal, S.A., a fine of € 2.900.000,00 (two million and nine hundred thousand euros).
 
           EDP Comercial – Comercialização de Energia, S.A., a fine of € 25.800.000,00 (twenty-five million and eight hundred thousand euros).
 
           Sonae Investimentos, SGPS, S.A., a fine of € 2.800.000,00 (two million and eight thousand euros).
 
           Modelo Continente Hipermercados, S.A. SGPS, S.A., a fine of € 6.800.000,00 (six million and eight hundred thousand euros).
 
           Sonae MC - Modelo Continente SGPS, S.A. was found guilty of the infringement, but a fine could not be applied due to the absence of turnover.
 
 
The Statement of Objections was adopted on 29th July 2016, and the addressees exercised their rights of defence, by written submissions on 6th October 2016.
 
The decision closes the investigation proceedings which had initiated on 3rd December 2014.
 
Infringements to competition law reduce consumer welfare and undermine the companies’ competitiveness, thus harming the economy as a whole.
 
 
 5 may 2017