AdC sanctions company for participating in cartel in the supply of teleradiology services to public hospitals
Press Release 20/2022
September 30, 2022
The AdC sanctioned ITM - Instituto de Telemedicina for participating in a cartel established for the supply of teleradiology services to public hospitals and other public health centers in Portugal. Teleradiology is the remote electronic transmission of radiological images, for example X-rays and CAT scans, and the preparation of diagnostic reports by medical specialists.
The AdC's investigation determined that ITM and other companies jointly implemented strategies aimed at a general price increase in the market in question, to the detriment of the contractors, i.e. the National Health Service (NHS).
The AdC concluded the case early regarding ITM due to the collaboration of the company. ITM entered a settlement procedure, admitting its participation in the cartel and renouncing to litigate in court.
The sanctioned practice
ITM's participation in the cartel took place at least between November 2015 and December 2017.
During this period, ITM developed contacts with other companies, defining, together with them, which companies, within public procurement procedures for the provision of teleradiology services, would submit the winning bids.
During such contacts, ITM and the other companies involved disclosed among themselves the prices they would bid in the future, so as to ensure that the best proposal would be that of the chosen company. They also agreed that the others would be excluded as a result of the submission of proposals that failed to meet eliminatory tender criteria.
The contacts established allowed ITM and other companies to share the national market for the provision of teleradiology services in public procurement procedures.
The service users
Teleradiology involves carrying out diagnostic tests in a health establishment without the physical presence of a radiologist or neuroradiologist. The medical specialists remotely receive the images and results of the diagnostic exams performed in the healthcare facilities, interpret them, and prepare the respective report, which they then send to the healthcare facility in question.
These services are provided by companies to NHS entities, following public procurement procedures. The use of teleradiology is especially relevant in cases where healthcare facilities do not have teams that include radiology and/or neuroradiology specialists to meet local needs, making it possible to make up for such shortages and assist in the interpretation of complex diagnoses.
The sanction applied
The AdC sanctioned ITM - Instituto de Telemedicina to a fine of €202,300.
The fines imposed by the AdC are determined by the turnover of the companies in the affected market in the years of the practice. According to the Competition Act, fines may not exceed 10% of the turnover in the year prior to the date of adoption of the decision. In setting the fine, the AdC takes into account the seriousness and duration of the infringement, the degree of participation in the infringement, the economic situation of the undertakings, among other circumstances (see the AdC’s Guidelines on the methodology to be applied in the application of fines).
The fine imposed on ITM - Instituto de Telemedicina was subject to a reduction, since the company agreed to the settlement procedure, i.e. acknowledged its participation in the cartel, cooperated with the AdC and waived its right to litigate in court.
The use of this procedure is essential for the simplification and procedural celerity of the proceedings, while sanctioning the companies that commit antitrust violations. In the settlement procedure, the companies, by confessing the facts and acknowledging their responsibility in the infringements, benefit, therefore, from a reduction in the total fine imposed. This process continues regarding other investigated companies which, so far, have not acceded to the settlement procedure. The fight against cartels, in particular in the field of public procurement, continues to be a top priority for the AdC, given the damage they invariably cause to citizens and companies, forcing them to pay higher prices and reducing the quality and diversity of the goods and services available to them.
The violation of competition rules not only reduces the welfare of consumers, but also harms the competitiveness of companies, penalizing the economy.