AdC sanctions companies and directors of Blueotter and EGEO groups for non-competition agreement

Press Release 10/2021

 
AdC sanctions companies and directors of Blueotter and EGEO groups
for non-competition agreement
 

The AdC’s decision

The Portuguese Competition Authority (AdC) has sanctioned companies Blueotter, SGPS, S.A., Blueotter Circular, S.A., CITRI - Centro Integrado de Tratamento de Resíduos Industriais, S.A., Proresi, S.A., EGEO SGPS, S.A. and EGEO - Tecnologia e Ambiente, S.A. with a total fine of € 2.9 million for implementing a non-compete agreement in the market for the provision of services to waste management systems in Portugal, between 2017 and 2019.

The AdC also sanctioned six managers and board members for having known and actively participated in the illegal practices that are attributed to the companies in which they hold or have held positions, without having adopted any diligence or measure to prevent the infringement or its execution. The six managers were sanctioned with fines which total €27,075.

The sanctioned behaviour

The investigation was opened by the AdC in May 2019, following the notification of the acquisition of sole control of a company of the EGEO Group by the Blueotter Group. At the time, the AdC identified that the Preliminary Purchase and Sale Agreement established non-compete clauses, through which the Blueotter Group and the EGEO Group agreed not to compete in the business areas in which each group was active.

Further investigation allowed to conclude that previously, in March 2017, in a Waste Recovery and Disposal Services Agreement entered into between subsidiaries CITRI and EGEO TA, the companies had agreed to use their best efforts to minimize expressions of interest or submission of commercial proposals to customers that the counterpart had in its customer portfolio.

The Preliminary Purchase and Sale Agreement extended the non-compete obligations to cover customers of all companies that were part of the Blueotter Group and the EGEO Group.

Based on the available evidence, the AdC held that these non-compete obligations created a nationwide horizontal market-sharing agreement, characterized by a continuous effort by the Blueotter Group and the EGEO Group to eliminate any competitive dynamics between them.

The non-compete obligations agreed between the Blueotter Group and the EGEO Group were in effect from April 2017 to July 2019.

The non-compete agreement undermined the interests of the customers of both groups, who might have benefited from better commercial conditions if there had been competition between the two groups.

The Competition Law expressly prohibits agreements between companies, which have negative effects, restricting competition between businesses, reducing consumer welfare and harm the competitiveness of companies and the economy as a whole.

In June 2019, the AdC conducted unannounced inspections at the premises of the targeted companies, located in Alenquer, Lisbon and Setúbal.

The Statement  of Objections was sent on July 29, 2020, and companies exercised their right of defense, by submitting a written statement, in October 2020.

The companies

The EGEO group provides global management and waste treatment services, operation of the integrated center for recovery, valorization and disposal of industrial waste, maintenance, operation and industrial cleaning, maritime management and regeneration of solvents, used oils and other products.

The CITRI group is dedicated to the treatment and recovery of non-hazardous waste, providing services to industries and activities that do not have the capacity to treat the waste they produce.

July 1, 2021