Lisbon Court of Appeal upheld Portuguese Competition Authority’s decision against Galp Energia

​Press Release 2/2017

Lisbon Court of Appeal upheld Portuguese Competition Authority’s decision against Galp Energia

The Lisbon Court of Appeal upheld the Portuguese Competition Authority’s (AdC) decision against three companies part of Galp Energia Group for anticompetitive practices in the Portuguese bottled LPG market (mainland Portugal, Azores and Madeira).

The Court kept the fine of €4.1 million imposed on Petróleos de Portugal – Petrogal, S. A., Galp Açores – Distribuição e Comercialização de Combustíveis e Lubrificantes, Lda., and Galp Madeira – Distribuição e Comercialização de Combustíveis e Lubrificantes, Lda., by the Competition, Regulation and Supervision Court, in a previous judgement.

The in-depth investigation carried out by the Portuguese Competition Authority in 2015 found that Galp Energia forbids its distributors from selling bottled LPG outside their allocated territory, thereby stifling intra-brand competition between these distributors.

With this practice, Galp Energia has artificially partitioned the Portuguese bottled LPG market and limited competition to the detriment of consumers. The territorial restrictions imposed by Galp Energia are likely to harm consumers with higher prices by allowing the distributors of bottled LPG to set their prices and commercial conditions without any competitive pressure from other distributors.

The Portuguese Competition Authority considered that this practice could harm consumers with higher prices. Bottled LPG (also known as bottled gas) is often used for home heating, production of hot water and cooking. It is estimated that more than 2 million Portuguese families use bottled LPG, spending roughly €250 on bottled LPG per year (including taxes).

The Lisbon Court of Appeal confirmed AdC’s decision and the previous judgment of Competition, Regulation and Supervision Court that the companies conduct was highly negligent, and showed significant lack of responsibility and lack of commitment to the competition rules.

In the judgment, the Lisbon Court of Appeal says that the practice affected a market related to basic needs of a large number of consumers and considers that the companies were particularly responsible because of the significant market shares they held.

In February, 2015, the Portuguese Competition Authority fined three companies part of Galp Energia Group on a total amount of €9.29 million for a serious infringement of Article 9 of Law 19/2012 (the Portuguese Competition Act) and of Article 101 (1) of the Treaty on the Functioning of the European Union.

First, the companies appealed to the Competition, Regulation and Supervision Court, which confirmed AdC’s decision, but reduced the fine to €4.1 million, in January 2016.The companies appealed from that judgment to Lisbon Court of Appeal.

19 January 2017