AdC issues statement of objection to Santa Casa da Misericórdia de Lisboa for failure to notify a merger
Press release 27/2021
December 21, 2021
The Statement of Objections
The AdC (Autoridade da Concorrência – Portuguese Competition Authority) issued a Statement of Objections to Santa Casa da Misericórdia for failure to notify the acquisition of sole control of CVP – Sociedade de Gestão Hospitalar, the managing company of the Portuguese Red Cross Hospital and therefore, without obtaining prior clearance from the antitrust enforcer .
The merger was implemented on December 14, 2020, and later notified to the AdC on May 28, 2021.
The notification of the merger followed an investigation, initiated by the AdC on February 11, 2021, which aimed to collect facts to assess whether the notification thresholds set forth in the Competition Act were met.
The AdC points out that the issuing of a statement of objections does not determine the final outcome of the investigation. At this stage of the proceedings, the undertaking concerned is given the opportunity to exercise its right to be heard in relation to the alleged offense and the penalties it may incur.
The Statement of Objections was adopted on December 21, 2021.
Failure to notify a merger limits the early intervention power of the AdC which is aimed at ensuring that barriers to competition are not created nor strengthened, with potentially harmful effects and difficult to eliminate.
For this reason, the obligation of prior notification is a fundamental pillar of the merger control system as a whole. Its breach is considered a serious infringement.
Mergers are subject to prior notification to the AdC when they meet one of the following conditions:
- If, as a result of the merger deal, a market share of more than 50% is created or strengthened.
- If the turnover of at least two of the participating companies exceeds €5 million and as a result of the deal results in a market share of 30% or more in a market; or yet
- If all the companies participating in the merger deal have had a total turnover in Portugal of more than €100 million, provided that at least two of the companies involved individually have a turnover of more than €5 million.
These transactions must be notified to the AdC, as a rule, upon the conclusion of the agreement between the participating undertakings, but before they are implemented.
For companies uncertain as to whether a merger deal they are planning meets the requirements for notification, a prior assessment by the AdC is available. This is a confidential procedure with no associated costs.
Implementing a merger without prior notification and clearance by the AdC (gun-jumping) is a serious infringement, punishable with a fine of up to 10% of the turnover of the undertaking concerned in the preceding business year.