Press Release 11/2024

May 27, 2024

 

The Portuguese Competition Authority (AdC) is investigating anticompetitive behaviors in the labor market, carried out by a multinational technology consulting group, during the period from 2014 to 2021.

As a result, the AdC has issued a Statement of Objections (accusation) directed at two companies within the group responsible for the practices, and the parent company, concluding that there is a reasonable possibility of issuing a sanctioning decision for entering into no-poach agreements with competing companies.

 

The Investigation

On March 22, 2022, the AdC launched an investigation, which found evidence that several companies had entered into no-poach agreements, committing not to hire or make unsolicited offers to employees of competing companies.

Three of the groups investigated, two multinational and one national, in the technology consulting sector, cooperated with the AdC, refrained from contesting the factual allegations, and voluntarily paid the fines imposed as part of the settlement procedure. Additionally, one of these groups also adhered to the leniency program.

The cooperation with the investigation (through settlement and leniency) resulted in fines of €1,323,000, €2,481,000, and €278,000 for these groups, reduced from what they would have incurred without cooperation.

For the multinational group that did not opt for the settlement procedure and is now under scrutiny, the investigation continues with the issuance of a Statement of Objections (accusation).

During the current instruction phase, the AdC provides these three accused companies – which benefit from the presumption of innocence – the opportunity to exercise their rights to a hearing and defence concerning the investigated behaviors, the gathered evidence, and the potential sanctions.

Upon completing this phase and considering all available elements, the AdC will adopt a final decision.

 

Anticompetitive Practices in the Labor Market

This is the second case involving restrictive practices in labor markets resulting in sanctions since the AdC's first intervention in the labor market in 2020.

No-poach agreements involve companies committing not to hire or make unsolicited offers to employees of the companies with which they have made the agreement. The practice of no-poach is prohibited by Competition Law as it limits companies' autonomy in defining strategic commercial conditions, specifically human resource hiring policies, and can occur in any sector of activity.

This practice can also affect the workers by reducing their bargaining power and salary levels and restricting labor mobility. In 2021, the AdC published a Report and a Best Practices Guide to prevent such no-poach agreements.