Court upholds verdict on EDP-Sonae non-competition pact, trims fines

Portugal’s Court of Competition on Thursday upheld a verdict that found Energias de Portugal and Sonae guilty of a non-competition pact, while reducing by 10% the fines of 38.3 million euros that had been imposed in May 2017 by the Competition Authority (AdC).

In its ruling on the requests submitted by EDP Energia, EDP Comercial, Sonae Investimentos and Sonae MC – Modelo Continente that the fines be struck down, the Court of Competition, Regulation and Supervision (TCRS), based in Santarém, took the view that it had been proven during the trial that started on 5 June that there had been a non-competition agreement in which the parent companies of the entities subscribing to the Plano EDP Continente marketing plan were involved.

The plan, which was devised in 2012, comprised the offer of 10% discounts on electricity sold by EDP Comercial to consumers holding a Cartão Continente card who signed up to a contract for the supply of low-voltage electricity in the liberalised market.

The judge, Mariana Sousa Machado, said that the 10% reduction in the value of the fines ordered by the court took into account the fact that the partnership had offered major discounts for families, at a time of great difficulty during the austerity imposed by a troika of international institutions as part of the euro-zone bailout for Portugal.

At issue in the trial was, among other matters, the analysis of the involvement of EDP Energia and Sonae Investimentos and whether the partnership between EDP Comercial and Modelo Continente implied a non-competition pact, which the court considered to have been proven, so imposing fines on the four entities that total around 34.5 million euros.

In its 2017 decision, the AdC had concluded that, against the backdrop of the liberalisation of the energy market, EDP and Sonae “undertook not to enter their respective markets, in particular by committing Sonae not to compete in the supply of electricity in mainland Portugal for a period of two years.”

The case had arisen “from consumer complaints, and the practice occurred in the context of the liberalisation of electricity and natural gas supply in Portugal, a moment of particular importance for competition in the sector,” the AdC said in its ruling.

The case began in December 2014; in February 2017 the TCRS upheld a request from the defendants to gain full access to the documents outlining the complaints of alleged illegality.

The defendants had attempted to have the payment of the fines suspended, due to their having filed an appeal with the TCRS, but Portugal’s Constitutional Court, in a ruling issued of last December, did not uphold that request.

Lawyers for the companies have requested on their behalf an extension of the deadline for lodging an appeal with the Lisbon Court of Appeal.