The Portuguese Competition Authority fines a hospital for gun-jumping but accepts payment of the fine in multiple installments not to negatively affect the hospital’s operations during the COVID-19 pandemic (Hospital Particular do Algarve)

AdC fines Hospital Particular do Algarve for gun-jumping*

The AdC fined Hospital Particular do Algarve, SA (HPA) in the total amount of 155,000 euros for acquiring sole control of Hospital de S. Gonçalo de Lagos S.A. (HSGL) without prior notification of the acquisition and, consequently, without obtaining approval from the antitrust entity (gun-jumping).

Given that the sanction involves a company in the health sector, the AdC accepted the payment of the fine in several instalments in order to avoid any impact on the provision the company’s services, at a time when the country faces the coronavirus pandemic. In this manner, The AdC maintains the continuity of competition enforcement in the country, with a sense of responsibility and orientation towards the common good.

The merger should have been previously notified to the AdC. Due to the merger, Grupo Hospital Particular do Algarve created or reinforced a 50% or greater share in the market of hospital health care by private units in the Algarve region.

The opening of this investigation took place in September 2019 and, during the proceedings, the undertaking submitted to the AdC a settlement proposal, having confessed the facts and assumed responsibility for their practice.

After the detection, by the AdC, of the infringement, the company proceeded to voluntarily notify the merger, which was cleared in September 2019.

Notwithstanding the high market share created by the merger, concretely in the hospital health care services by private units in the Algarve, as well as in medical consultation services in the areas of influence of the clinics, the AdC did not oppose the merger. This was justified by the impending insolvency of HSGL and its assets.

The company demonstrated an appropriate collaboration with the AdC, both during the analysis phase of the notified merger and the proceeding that is now concluded with the payment of the fine.

In setting the amount of the fine, AdC took such collaboration into account and the fact that the merger in question was voluntarily, though after having been implemented, notified.

Portuguese Competition Law sets the obligation of prior notification to the AdC of mergers that meet certain thresholds of market share and / or turnover of the companies involved. It also imposes an obligation to suspend their implementation until obtaining the final decision of non-opposition.

The settlement procedure, in which the companies admit fault and agree to waive their right to continue with judicial proceedings, thus benefiting from a reduction in the fine, allows procedural simplification and efficiency, thus optimizing the application of competition law.

This is the third time since 2014 that the AdC imposes a fine on companies for gun-jumping. It is also the first case involving failure to notify by the market share threshold.

*This is the original title of the press release. The title above has been amended in order to match the e-Competitions format. Individual authors are welcome to provide original independent commentaries on the case law. Articles are subject to approval by the Board of e-Competitions Bulletin before publication based on the Editorial Policy (click here).

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Portuguese Competition Authority, The Portuguese Competition Authority fines a hospital for gun-jumping but accepts payment of the fine in multiple installments not to negatively affect the hospital’s operations during the COVID-19 pandemic (Hospital Particular do Algarve), 19 mars 2020, e-Competitions March 2020, Art. N° 93831

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