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AdC issues Statement of Objections to laboratories and business association for involvement in cartel to test COVID and other clinical analysis

15-12-2022

AdC issues Statement of Objections to laboratories and business association for involvement in cartel to test COVID and other clinical analysis

mão com luvas a encher pipetas em ambiente de laboratório

Press Release No. 30/2022
December 15, 2022

The Statement of Objections
The AdC has issued a Statement of Objections (accusation) against a business association and seven major private laboratory groups for their involvement in a cartel in the Portuguese market for the provision of clinical analysis and COVID-19 tests, which operated at least between 2016 and 2022.
The AdC stresses that the adoption of a Statement of Objections (SO) does not determine the outcome of the investigation. At this stage of the process, the companies, which enjoy the presumption of innocence, 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 behavior
The AdC considers that there is a reasonable probability that the concerned association the laboratories will be sanctioned for having agreed on the strategy to be adopted in negotiations with public entities, namely the National Health Service, but also with private entities, which used them for the provision of clinical analyses (e.g. blood tests) and the supply of COVID-19 tests.
The cartel, established between the laboratories through their participation in the association's board, was aimed at fixing the prices applicable to the provision of clinical analyses and the supply of COVID-19 tests, as well as the sharing of the market and sources of supply, which took the form of a commitment not to bind/hire workers from competing laboratory groups (a behavior known as "no-poach").
COVID-19 infection is an acute respiratory infection caused by the potentially serious, highly transmissible, globally distributed SARS-CoV-2 coronavirus and was classified as a pandemic by the World Health Organization on March 11, 2020. Detection of the presence of the SARS-CoV-2 coronavirus is done by means of PCR or antigen test.
The capillarity of the blood collection stations and the production capacity of the laboratory groups represented a fundamental complement to the pandemic response effort in Portugal, providing the SNS with the additional capacity that the emergency situation required.
More than 40 million tests had been performed in Portugal by March 30, 2022.  
The agreement between the laboratories allowed them to increase their bargaining power vis-à-vis the entities with which they negotiated the provision of clinical analysis and the supply of COVID-19 tests, leading to the setting of prices and commercial conditions that were potentially more favorable than those that would result from individual negotiations in the normal operation of the market, preventing or delaying the revision and reduction of prices.

AdC's priority in combatting anti-competitive agreements
The combat against cartels is a high priority for the AdC, given the damage that they invariably cause to families and companies, forcing them to pay higher prices and reducing the quality and diversity of the goods and services available.
In 2021, in view of the pandemic context, the AdC defined as a priority to remain "vigilant regarding the detection of abuses or anti-competitive practices that exploit the [...] situation, for example in terms of price combination or market sharing, at any level of the supply chain".
The violation of competition rules not only reduces the welfare of consumers, but also harms the competitiveness of companies, penalizing the country's economy.

The investigation
The investigation was opened by the AdC on February 24, 2022, following the submission of a leniency application. The AdC subsequently received a second leniency application.
In March 2022, the AdC carried out unannounced inspections in the headquarters of several companies, both in Lisbon and in Porto.
The Statement of Objections (SO) was adopted on December 13, 2022.
With the adoption of the SO, the case is no longer under justice secrecy, and is now public, pursuant to article 31 of the Competition Law.