Portuguese Competition Authority

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On May 26, 2020, one week before the football championship resumes, the Portuguese Competition Authority (AdC) announced that it has ordered the Portuguese Professional Football Association (LPFP) to suspend, with immediate effects, its resolution dated April 8, 2020. This resolution allegedly hindered clubs from hiring players who had unilaterally terminated their employment relationships on the basis of the COVID-19 pandemic.

The AdC has adopted the interim measures in the context of opening investigation proceedings against LPFP for a potential antitrust conduct. In these proceedings, the AdC will decide either to close the investigation or issue a statement of objections, which could result in a sanction.

If it concludes there is an antitrust infringement by an association of undertakings, the AdC may sanction the LPFP, its president or other members of its corporate bodies. Clubs that are members of the LPFP’s corporate bodies (including Benfica, Porto and Sporting) may be jointly liable to pay the fine. To calculate the fine, which may be up to 10% of the annual turnover, the AdC should consider the associated clubs’ aggregate turnover.

According to the AdC, the resolution established a horizontal no-poach agreement, adopted by the First and Second division clubs (with the participation of the LPFP’s president), with “potential serious and irreparable impact of a practice that could harm the competition rules.”

Under this resolution, clubs were allegedly hindered from hiring players from their rivals/competitors, restricting competition for the acquisition of players, who are deprived of their labor mobility.

Following the AdC’s interim measures, the LPFP’s resolution is no longer effective. The LPFP was ordered to communicate this to all its members (i.e., the clubs) and to issue a press release informing about the interim measures. The AdC’s press release also mentions that the LPFP is ordered to pay €6,000 for each day it delays in adopting these measures.

Adopting interim measures is a deterrent instrument that the AdC has been reluctant to use. Under the Portuguese Competition Law, these measures are used to prevent serious and irreparable (or difficult to repair) damages for competition.

In adopting these interim measures, the Portuguese Competition Authority shows that it remains especially vigilant in its mission to detect possible abuses or anti-competitive practices that exploit the current pandemic.

By: Pedro Marques Bom and Luís Bordalo e Sá

This post is also available in: Español



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