Competition Authority issues Statement of Objections to private hospitals and their business association for anticompetitive agreement

Press release 13/2021

Competition Authority issues Statement of Objections to private hospitals and their business association for anticompetitive agreement
 
The AdC – Portuguese Competition Authority has issued a Statement of Objections for an agreement or concerted practice restricting competition in the convention of private hospital health services by the public health sub-systems ADSE and IASFA, involving the Portuguese Private Hospitalization Association (APHP) and the hospital groups CUF, Trofa Saúde, Hospital Particular do Algarve, Lusíadas e Luz Saúde.

Based on the evidence gathered, the AdC’s Statement of Objections considers that there is a reasonable probability that these companies will be sanctioned for having coordinated among themselves the strategy and negotiating position to be adopted in the commercial negotiations with ADSE and IASFA, through and with the joint participation of APHP, since at least 2014 and until at least 2019.

The agreement or concerted practice in question was aimed at fixing the level of prices and other commercial conditions, as well as coordinating the suspension and/or threat of termination of the conventions, by the aforementioned companies, within the scope of the negotiations with ADSE and IASFA.

The collective action of these companies will have allowed them to increase their bargaining power vis-à-vis ADSE and IASFA, leading to price and other commercial conditions fixing, potentially more favourable for the health companies concerned than those that would result from individual negotiations in the normal operation of competition in the market.

APHP is an association that brings together companies in the private hospitalization sector in Portugal.

The hospital groups in question own companies which are active in the private healthcare sector in Portugal.

Within the scope of their activity, they enter into conventions with public health subsystems, namely with ADSE and IASFA. The relationship between the subsystems and the health care providers under these agreements is contractual in nature.

ADSE is the health sub-system from which the Public Administration workers and their families benefit, through contributions, while IASFA is the social action institute of the Armed Forces, a health sub-system from which the military and their families benefit, also through contributions.

The case was opened by the AdC on March 14, 2019, following several complaints and media reports.

In May 2019, the AdC conducted unannounced inspections in the premises of the targeted companies, located in Portimão, Lisbon and Porto.
 
The Statement of Objections was adopted on July 29, 2021.
 
With the issuing of the Statement of Objections, the process is no longer under the secrecy of justice, but is now public, in accordance with Article 31 of the Portuguese Competition Law.
 
The AdC stresses that the issuing of a Statement of Objections does not determine the final outcome of the investigation. At this stage of the process, the companies concerned are given the opportunity to exercise their right to be heard and to defend themselves in relation to the alleged infringement, the evidence gathered and the sanction or sanctions they may incur.

The Competition Law expressly prohibits agreements between companies which, with the aim of appreciably restricting competition in all or part of the domestic market, have, by their very nature, a high potential for negative effects, reducing consumer welfare and damaging the competitiveness of companies and the economy as a whole.
July 29, 2021