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European Commission


Vice President of the European Commission responsible for Competition Policy

The New Portuguese Competition Law

Conference organised by the Autoridade da Concorrência, Lisbon

13 July 2012

Ladies and Gentlemen:

I would like to thank Manuel Sebastião for his kind invitation to this conference.

I always like to come back to Lisbon – a city where I feel at ease. And my visit today to attend this conference on the new competition law makes me especially happy.

The law that came into force last week turns the page for competition control in Portugal. I regard it as a crucial step in the country’s efforts to emerge stronger and more dynamic from the crisis.

This crisis is affecting the lives of large portions of the population here in Portugal and in Europe. The people are tightening their belts and the prospects for business remain uncertain. Even the future of European integration is at stake.

But the crisis is also an opportunity that cannot be missed. As public authorities, all of us have the responsibility to roll up our sleeves and tackle older challenges.

Of course, the tasks we have to carry out to put our public and private levels of debt on a sustainable path imply adjustments and sacrifices.

At the same time, bold reforms are needed to strengthen the foundations of the economy and increase its growth potential.

We know that only that route will lead us to higher levels of employment and social cohesion.

For Portugal this means that liberalisation and restructuring efforts must proceed in crucial sectors.

Structural reforms must go deep into the country’s economic fabric, including for state-owned enterprises and the financial sector.

These policies will bring benefits across the board, especially in the network industries such as energy and telecoms, in the service sector, and in the regulated professions.

Each Member State must live up to its responsibilities. Without adopting responsible decisions at home, it is not possible to ask for solidarity from our partners.

But at the same time, given the degree of integration we have reached in Europe, the success of the reform efforts in each country depends to a large extent on the decisions taken together at EU level.

Just over two weeks ago, the Euro Area Summit and the European Council took comprehensive decisions to stabilise financial markets in the short term and lay stronger foundations for the future of the euro area.

We must continue to advance along this road with determination, and – if we do – tangible results will not fail to appear.

The new competition law

The new law can make a real difference in this context, because it improves Portugal’s competition regime across the board and brings it more in line with the EU regime.

First, the authority will have stronger investigative powers – such as collecting digital documents as evidence – and will be able to set its own priorities, rather than responding to individual complaints.

Second, it will be able to close infringement procedures with commitment decisions.

As we all know, this is a vital tool for competition authorities, and the Commission has used it in various markets – from energy to financial services.

In some instances, notably in fast-moving markets, well-designed remedies can swiftly establish good competitive conditions and maximise the impact of enforcement.

Similarly, allowing companies to settle cartel cases and accept liability for their violations is another tool that will make enforcement work more effective and flexible.

Let me also stress the importance of bringing the substantive merger control test into line with the European test.

Apart from capturing harm to competition which would escape the dominance test, this change makes enforcement at European and national levels more consistent and more predictable for companies.

In certain respects, in fact, the new Portuguese law goes beyond European law.

For example, it provides for individual sanctions on managers and staff that were aware of infringements and did not put an end to them, whereas at European level we can only sanction companies.

Finally, the creation of a specialised Court with full judicial review on fines is a genuine breakthrough.

Let me stress the importance of effective judicial review. The decisions of the specialised Court will trace the path of Portugal’s new competition regime, especially in the initial phase of implementation.

So, I applaud the new law.

The next step, of course, is providing the resources and the workforce for the new system to have a real impact on the ground.

It is crucial that the Portuguese competition agency has the means to be strong and authoritative. To this end, a flexible recruitment policy, appropriate remuneration of staff, and an appropriate budget are fundamental.

Cooperation within the ECN

One thing the new law will not change is the relationship with the other agencies in the European Competition Network.

The ECN has become instrumental in ensuring coordinated enforcement of EU competition rules at all levels throughout Europe.

But beyond case-by-case enforcement, the ECN has also become a forum in which national competition authorities can extend their already excellent level of cooperation to more general issues.

The recent ECN report devoted to the food markets is an illustration of this work, and it shows how teamwork and dedication can produce results that all Europeans can touch first-hand.

The report explains how Europe’s competition authorities have addressed, in their respective national markets, various types of anticompetitive behaviour at all levels of the food supply chain, mostly at the processing and manufacturing stage.

This work has benefited all market actors, from farmers to consumers; but of course, there are many other reasons for the evolution of food prices.

The report also offers precious advice on how to tackle the sector’s problems.

For instance, it suggests that producers can adopt more efficient business models by setting up cooperatives and pooling some activities.

It also shows that some regulatory barriers still remain at the retail level in several EU countries.

I welcome this work, which will be useful not only to guide our enforcement work but also in the debate over the future of our Common Agricultural Policy.

State aid


Ladies and Gentlemen:

I will now turn to State aid control, which is another domain of competition control with important implications for the kind of change that is needed in Portugal and in other parts of Europe as well.

State aid has become a scarce commodity and Europe’s governments need to reconcile the twin needs to boost growth and consolidate their budgets.

In spite of the austerity plans, governments can still sustain growth in Europe.

The sweeping reform of our control of State aid that I launched last May is designed to help them do just that.

The changes that will be introduced across the board match the initiatives of the EU master plan for growth and jobs – the Europe 2020 strategy.

The reform will encourage what I call ‘good aid’, such as the aid that goes to the digital economy, to research and development, and to the green economy.

It will also help governments elaborate wiser spending strategies to tackle genuine market failures and attract private investment.

Conversely, the reform will discourage ‘bad aid’. These are the subsidies that crowd out private investment and those that waste taxpayers’ money by keeping inefficient companies on indefinite life support.

I believe that these principles can help Portugal turn its reforms into a success; for example, it may help the country achieve more sustainable support to the energy sector.

In addition, the measures related to the stock of debt of State-owned enterprises as well as those taken in view of privatisation must also comply with EU State aid rules.

To improve the quality of public spending, Portugal can also consider strengthening the administrative capacity and the coordination of State aid issues at national level.

The national authorities can count on the Commission’s assistance to identify and resolve these issues as early as possible in the decision-making process.


Since the end of 2008, a sizeable part of our work in State aid control has been devoted to the public funds that are used to rescue and restructure financial institutions. Let me say a few words on this important part of our action.

When we assess a restructuring case, our main goal is to make sure that the bank returns to long-term viability with no further need for government support.

In the case of Portuguese banks, we also look at the long-term prospects of the country’s banking system.

We are currently working with a number of Portuguese banks, including BCP and BPI, which were recently recapitalised and must notify their restructuring plans to us by the end of the year.

We are also working on the approval of the recapitalisation of Caixa Geral de Depósitos and will enter into the discussion of its restructuring plan.

Every time we agree the terms of recapitalisation, we make sure that the State is properly remunerated for the capital it puts into the bank, which may imply the dilution of existing shareholdings.

In our analysis, we assess why a bank had to ask for public capital in the first place. Some institutions need it because of temporary regulatory changes related to the crisis; others because of failures in their business models.

The answers we find to these and other questions determine the kind and the degree of restructuring that the banks will have to carry out.

In general, full information on the quality of the assets on banks’ balance sheets is needed to identify potential problems as early as possible. To this end, the cooperation of Portugal’s public authorities and banks is of the essence.


We use all our instruments – not only State aid control – to keep financial markets open, transparent and efficient.

At the start of the year we blocked the deal between Deutsche Börse and NYSE Euronext because it would have created a de facto global monopoly on derivatives with European underlyings.

In antitrust, we have cases in the markets for online payments involving the European Payments Council and some credit card schemes.

We are also investigating the market information provider Thomson Reuters, whereas a similar case against Standard & Poor's was closed with commitments at the end of last year.

Finally, we are looking into the conduct of a number of leading investment banks to guarantee it does not stifle competition in the Credit Default Swaps market.

But the most notable antitrust cases are those related to the LIBOR scandal that has recently hit the headlines.

The story is quite shocking and brings us back to the banking industry’s most irresponsible behaviour of the past.

Many public authorities around the world are taking action against the manipulation of benchmark financial rates and the first fines have already been imposed by financial regulators in the UK and the USA.

Let me clarify that these authorities fall into three different categories:

First, antitrust authorities, including the European Commission;

Second, authorities dealing with fraud and other forms of criminal conduct, such as the US Department of Justice, Fraud Division; and

Third, financial regulators, such as the Financial Services Agency in the UK and the Commodity Futures Trading Commission in the US.

The importance of transactions in financial derivative products is enormous. In 2011, interest-rate derivatives had a gross market value of $20 trillion.

These are products that are traded every day on a global basis, involving companies such as banks, pension funds, and also industrial firms seeking to hedge their exposure. They play a key role in the management of risk in our economy.

The alleged rate-rigging is a major competition concern.

This is why we started investigating a number of banks last year for their possible concerted manipulation of benchmarks such as LIBOR, EURIBOR and TIBOR – the Tokyo rate – for several currencies.

We are focussing our investigations on suspected cartel arrangements involving financial derivatives related to these benchmark rates, including possible collusion over the setting of the rates.

The investigations have top priority, because this sort of collusion can seriously harm competition worldwide and on our continent in particular.

Again, if our concerns are confirmed, we will take the necessary actions to bring these practices to an end and prompt a change of culture in the banking sector.

Beyond competition enforcement, Commissioner Barnier has recently proposed to expand the scope of criminal sanctions in EU legislation and examine alternatives to the mechanisms currently used to set these rates.

Together with other public authorities and regulators, we need to put finance back in the service of the real economy. ‘Credit’ comes from credere, the Latin verb for ‘believing’. Credit must return to flow to companies and households from organisations we can trust.

Ladies and Gentlemen:

To conclude, I want to stress that, especially in times of crisis, the European internal market is our most important engine of growth, and competition control is crucial to protect it and leverage its power.

Robust competition enforcement improves business conditions and unleashes the most dynamic social and economic forces.

When firms are allowed to do business on a level playing field, they become more competitive and innovative.

This promotes job creation and brings long-lasting benefits to consumers and to the whole economy.

It is the responsibility of every competition authority to promote a culture of competition in each Member State and across the EU.

This is why I am so happy that the new Portuguese competition law is coming into force.

You can count on my full support and on the cooperation of the European Commission’s Directorate-General for Competition to reach your goals.

I wish the Autoridade da Concorrência every success in Portugal’s new competition regime.

Muito obrigado.

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