The Leniency Programme is a real incentive to the detection of forbidden competitive practices by the companies involved. It is an essential instrument in the fight against cartels.
Cartels are usually secret behaviours between competing companies that lead to price-fixing, production limitations, market sharing, and even bid rigging in public procurement.
Consumers suffer the consequences because there can be an artificial increase in prices and a reduction of incentives to provide better products and services.
The Leniency Programme enables the AdC to detect and dismantle cartels that would otherwise not be identified.
What are cartels?
Under competition rules, serious collusion between companies is commonly called a cartel. This involves an agreement or concerted practice, usually secret, between two or more companies with competing activities with the aim or effect of distorting competition in the relevant market.
For the companies involved to benefit from the creation of a cartel, they follow certain behaviours:
- fixing purchase or sale prices or other transaction conditions;
- production limitation;
- market sharing;
- customer division;
- exchange of commercially sensitive information;
- collusion in auctions or public tenders;
- anti-competitive actions against competitors.
We are, therefore, facing a severe anti-competitive practice insofar as the existence of a cartel harms consumers by promoting price increases and restricting supply. The companies involved in this collusive practice intend to achieve gains far superior to those that would be obtained under conditions of free competition, to the detriment of other market players (customers, consumers), with market efficiency being substantially affected.
Cartel practices between companies are also found within public procurement to eliminate or limit competition in the procedures for contracting goods and services. In this case, the main victim is the State, and, indirectly, taxpayers and, ultimately, society.
How the Leniency Programme works
This is a special regime for immunity or reduction of the fine in administrative proceedings for infringement of competition rules investigated by the Competition Authority.
For companies, the Leniency Programme (text in Portuguese) brings significant advantages since, by collaborating with the AdC in the investigation of a cartel, they benefit from immunity or reduction of the fine, which can reach up to 10% of turnover.
Company managers and directors involved may be sentenced up to 10% of their annual remuneration and also may benefit from this immunity or reduction of the fine.
Who can get immunity or fine reduction
Under the Leniency Programme, it is possible to benefit from a total immunity (text in Portuguese) or fine reduction.
The total immunity of the fine is directed to the first company that exposes a cartel in which it is involved, putting an immediate end to its participation. But, apart from reporting it, this company cannot be responsible for coercing other companies to participate in the cartel and must cooperate with the AdC throughout the investigation.
The reduction of fine applies to other companies that have participated in a cartel, provided that their involvement also ceases. These must provide the Competition Authority with all the information and evidence that proves the existence of a cartel, thus contributing to a faster investigation.
As well as the companies involved in a cartel, the respective administrators and directors can also benefit from the Leniency Programme. If they cooperate with the investigation, they can obtain immunity or reduce the fine attributed to the company they represent or apply for it individually.
An essential tool for cartel detection, the Leniency Programme has been adopted in most State-Members of the European Union.
To benefit from the Leniency Programme you can contact the Competition Authority by email or by phone using the Leniency Line: +351 217 902 030. All the information and documentation provided are confidential.
