Press Release 14/2024
June 21, 2024

The Constitutional Court has declared its judgment no. 360/2024, dated May 8, final, thereby making definitive the decision of the Lisbon Court of Appeal, dated September 25, 2023, which confirmed the conviction of EDP Produção for abuse of dominant position, sanctioned by the Portuguese Competition Authority (AdC) in September 2019.

Constitutional Court Decisions
The aforementioned judgment no. 360/2024, dated May 8, denied the complaint submitted by EDP Produção regarding Summary Decision no. 222/2024, dated March 27, 2024, also from the Constitutional Court, which decided not to hear two appeals filed by EDP with the Constitutional Court for the constitutional review of the interpretation carried out by the Lisbon Court of Appeal (TRL) in its judgments of September 25, 2023, and January 22, 2024, of various provisions of the Competition Law and other legal precepts.
Also, by decision of the Constitutional Court (dated March 27, 2024), the urgency of the concrete constitutional review process was declared, given the risk of the statute of limitations on the infringement. The Constitutional Court held that it cannot "be indifferent to the outcome of the main case, nor become a passive instrument of the potential use of constitutional appeals as delaying tactics (...), by the party to whom the statute of limitations benefits."
The limitation period will end – without prejudice to any applicable suspension causes, particularly those arising from the Covid-19 pandemic context – on June 30, 2024.
Following the declaration of the final judgment, the case was ordered to be referred back to the TRL for the purpose of calculating court costs and processing the payment of the fine.
In this regard, it is noted that the amount of the fine was deposited with the Court after the appeal against the decision was given non suspensive effect.
Despite the final judgment declaration, EDP filed a new appeal with the Constitutional Court, which was not admitted due to its untimeliness, although further procedural actions by EDP cannot be ruled out.

The Lisbon Court of Appeal Judgment
The TRL's judgment, dated September 25, confirmed that the capacity restriction practiced by EDP Produção led "to a loss of productive efficiency in the market, with a significant increase in the prices of the secondary regulation band market above the competitive price, causing consumers of electricity to be doubly harmed, bearing higher access tariffs and retail energy prices."
The TRL confirmed that EDP Produção "knew, and could not be unaware, that by implementing between October 2009 and 2013, a strategy of supply restriction in the secondary regulation band market of the national electrical system in Mainland Portugal, it was using its dominant position in that market to the detriment of consumers, intending to use such dominant position to the detriment of consumers," further acting "freely, knowingly, and voluntarily in the abusive exploitation of its dominant position in the secondary regulation band market in Mainland Portugal, without such conduct stemming from any justifying cause (...) well aware that its actions were prohibited and punished by law."
The TRL responded to the appeal filed by the company against the sentence of the Competition, Regulation, and Supervision Court (TCRS), which in August 2022 had fully confirmed the AdC's decision, imposing a fine of 48 million euros on EDP Produção.
The TRL adjusted the fine to the duration of the infraction that the TCRS found proven – 4 years and 3 months – and not to the 5 years imputed by the AdC, thus reducing the fine from 48 to 40 million euros.
This is the largest fine for abuse of dominant position confirmed by national courts.

The Sanctioned Practice
In September 2019, the AdC condemned EDP Produção to pay a fine for abuse of dominant position in the secondary regulation band market in Mainland Portugal.
The AdC's decision considered that EDP Produção defined and implemented, between 2009 and 2013, in the secondary regulation band market in Mainland Portugal, a strategy of limiting the supply of secondary regulation from its plants benefiting from state aid – the CMEC plants – thereby making room for this service to be provided by other plants in its portfolio (market plants) at higher prices.
During that period, EDP restricted the secondary regulation capacity of its CMEC plants, underutilizing them, transferring the secondary regulation activity from those plants to its market plants, intending these to be contracted by REN to provide secondary regulation.
Through this practice, EDP Produção was able to simultaneously obtain higher public compensations paid under the CMEC regime and benefit from higher revenues in the market through its non-CMEC plants.
It achieved this by burdening consumers in two ways: on one hand, the price of energy rose due to the increased cost of the secondary regulation band; on the other hand, the portion it benefited from through compensations under the CMEC regime also increased.
The secondary regulation band or secondary regulation is the service that ensures that, at all times, consumers receive the electricity they need, balancing the production of plants and the consumption of households and businesses.
EDP Produção is, by far, the main provider of secondary regulation in the National Electric System and also the main operator in terms of capacity qualified for secondary regulation, making it indispensable for meeting the demand for this service.