The Portuguese Competition Authority (AdC) has sanctioned the companies Cabelte - Cabos Eléctricos e Telefónicos (Cabelte), S.A., Quintas & Quintas - Condutores Eléctricos, S.A. (Q&Q) and Solidal - Condutores Eléctricos S.A (Solidal) (which wholly owns Q&Q), for an agreement or concerted practice restricting competition through price fixing and market sharing in public procurement procedures launched by REN (the national electricity infrastructure manager) for the supply of cables for electricity transmission.

The AdC concluded the investigation  using the settlement procedure, with the three companies admitting their participation in the cartel and waiving their right to litigate.

Cabelte was sanctioned with a fine of €1,020,800.00 and Q&Q and Solidal with a fine of €1,035,000.00. These fines have been reduced as a result of their cooperation with the AdC in the context of the settlement procedure.

 

The behavior

The agreement or concerted practice in question was aimed at fixing prices and dividing up the market in relation to the tender procedures launched for the supply of cables for electricity transmission by REN, throughout the national territory, with the object of preventing, distorting or appreciably restricting competition.

Cabelte, Q&Q and Solidal defined in advance who would win the procedures in an alternating manner, subcontracted the losing bidder, and compensated with a scheme of regular payments and settlements throughout the period in question.

The practice carried out by the companies took place at least between June 2015 and May 2020.

The Competition Law expressly prohibits agreements between companies which, by their very nature, have a high potential for negative effects, reducing consumer welfare and damaging the competitiveness of companies and the economy as a whole, with the aim of appreciably restricting competition in all or part of the domestic market.

 

The sanction

The AdC imposed a fine on Cabelte of €1,020,800.00 and on Q&Q and Solidal a fine of €1,035,000.00.

The fines imposed by the AdC are determined by the turnover of the companies in the affected market in the years of the practice. According to the Competition Law, fines cannot exceed 10% of turnover in the year prior to the date of adoption of the decision. In setting the fine, the AdC considered the seriousness and duration of the infringement, the degree of participation in the infringement and the special economic and financial situation of the companies.

 

The settlement procedure

The fines imposed were subject to a reduction, since the companies agreed to the settlement procedure, i.e. acknowledged their participation in the cartel, cooperated with the AdC and renounced to litigate in court.

The use of the settlement procedure proves to be effective in simplifying and speeding up the proceedings, while sanctioning the companies that commit antitrust violations. In the settlement procedure, companies, recognizing their responsibility in the infringements, benefit from a reduction in the total fine imposed.

The fight against cartels, particularly in public procurement, continues to deserve priority action by the AdC, given the damage they invariably cause to families and businesses, forcing them to pay higher prices and reducing the quality and diversity of goods and services available.

The violation of competition rules not only reduces the welfare of consumers, but also harms the competitiveness of companies, penalizing the economy as a whole.

For additional information about the case, please see the case file.