AdC imposes fine of €3.6 M to APAP for restraining competition in advertising services

​Press Release 16/2020
 
 
AdC imposes fine of €3.6 M to APAP for restraining competition in advertising services
 
The AdC (Autoridade da Concorrência) imposed a fine of 3,6 million euros on the Portuguese advertising agencies association - APAP (Associação Portuguesa de Agências de Publicidade, Comunicação e Marketing)- for restraining its associates from freely participating in procurement tenders for advertising services.
 
The Statement of Objections (accusation), issued in July 2019, also included the Portuguese advertisers association - APAN (Associação Portuguesa de Anunciantes).
 
However, the subsequent investigation carried out by the AdC did not conclude that this association imposed rules on its associates on the procurement tenders of advertising services. Proceedings against APAN were therefore closed.
 
Following the adoption of a “Commitment” by APAP, this association urged its members to exclude themselves or abandon a tender, whenever advertisers did not follow the rules set on that “Commitment”. Such rules included restricting the number of competitors in the tender to a maximum of four.
 
With such a “Commitment”, APAP had the purpose of restricting competition between undertakings. APAP monitored procurement tenders and urged the advertising agencies to boycott the tender if any of those involved a larger number of companies.
 
This behaviour lasted, at least, for three and a half years.
 
During the unannounced inspections carried out in September 2018, the AdC seized several messages from APAP to both advertising agencies and advertisers. Messages issued by APAP included admonitions to the receiver and confirmed that APAP was aware of its illegal behaviour relative to the Competition Act.
 
 
In the email examples below (in Portuguese), APAP states the following to its Board members:
“The “industry’s position” accepted by email is one of cartelisation and it is illegal according to Competition Act!
And I was unable to write this so that there is no such risk – would you like to suggest a rephrasing?”
 
 
 
 


 
The investigation now completed was opened by the AdC in 2018, following a complaint received from one advertising agency.
 
In addition to the fine, the AdC imposed the immediate revocation of the "Commitment" by APAP. The association is ordered to refrain, in a definitive manner, from urging its members not to participate or to withdraw from tenders. APAP is also ordered to refrain from interfering in specific procurement tenders.
 
APAP represents corporate communications agencies, including advertising, media planning and purchasing, digital marketing, relational marketing, events, brand activation, public relations and communications. It had, in 2019, more than 30 members which together achieved an annual turnover of €177 million.
 
The board of APAP is currently composed of Fuel Publicidade, APAME (Portuguese Association of Media Agencies), Fullsix Portugal - Interactive Marketing, Wunderman Cato Johnson - Direct Communication Services, NIU Sistemas - Power for Brands, BAR Ogilvy Portugal and Nossa, Communication Agency.
 
The agencies which were part of APAP’s board are joint and severally liable for the fine imposed. Therefore, the AdC warns companies that under the Competition Act, that they cannot shield themselves from liability for anticompetitive practices through decisions of business associations.
 
The type of decision, now sanctioned, by business associations deprives members of an autonomous commercial strategy and is punishable under the Competition Act. For competition to be generated in a market, each undertaking should determine, in an autonomous way, its commercial strategy.
 
Since 2005, the AdC fined 5 business associations for decisions that deprived their members of the freedom to set their own commercial conditions. These sanctioning decisions involved sectors such as driving schools, parking lots, freight transportation, bread and pastry, as well as shipping agents. Promoting competition in business associations has been one of the AdC’s priorities.
 
The AdC’s Guide directed at Business Associations (in Portuguese only) is available at:
 

October 22, 2020