The AdC’s Decision
The Portuguese Competition Authority (AdC) sanctioned Santa Casa da Misericórdia de Lisboa (SCML) with a fine in the amount of € 2.500.000 for gun-jumping, specifically, for implementing the merger before the notification to the AdC, and therefore before a clearance decision.
The merger in question consisted of the acquisition by SCML of sole control over CVP – Sociedade de Gestão Hospitalar, S.A. (SG CVP) the managing firm of Portuguese Red Cross Hospital. The acquisition had already been implemented since December 14, 2020 and was notified to the AdC only on May 28, 2021.
Merger transactions should, as a general rule, be notified to the AdC after the closing of the parties’ agreement, but before its implementation.
For more information on the case, please see the AdC's website.
The conduct
The implementation of a notifiable merger transaction before a clearance decision issued by the AdC is a serious infringement, punishable with a fine not exceeding 10% of the aggregate turnover of the undertaking concerned in the financial year preceding the AdC’s fining decision.
The Portuguese Competition Act determines the obligation to notify a merger transaction to the AdC whenever any of the merger thresholds – parties’ market share and/or turnover - are met, together with a standstill obligation before the AdC issues its clearance decision.
In the event of doubt as to whether a merger is notifiable to the AdC or not, the pre-notification procedure is available to the parties. This is a confidential and cost-free procedure.
Failure to notify a merger transaction impacts the AdC’s enforcement powers in merger control, that aims to ensure that no impediments to effective competition in the market are created or reinforced, with negative effects and often difficult to eliminate. For these reasons, the obligation to notify a merger ex-ante represents a fundamental pillar of the merger control regime and gun jumping is considered a serious infringement.
The sanction
SCML demonstrated adequate cooperation with the AdC, both during the merger review procedure and during the gun-jumping investigation.
In determining the amount of the fine, the AdC took into account the fact that the parties, even though a posteriori, voluntarily notified the merger, as well as the fact that SCML suspended the exercise of the voting rights resulting from the merger and presented a derogation request with the notification, under the terms established in article 40.º of the Competition Act.
The sanctioning decision was issued by the AdC on September 6, 2022.