TOURISM LAW AND COMPETITION – A PORTUGUESE PERSPECTIVE 477 merger. This will arise where the competitive structure of the market would deteriorate to at least the same extent in the absence of the merger”172. To the extent “it is for the notifying parties to provide in due time all the relevant information necessary to demonstrate that the deterioration of the competitive structure that follows the merger is not caused by the merger”, it is of utmost relevance to consider this defence when potential buyers anticipate competition concerns arising from a given transaction. The Commission considers three criteria to be especially relevant for the application of a “failing firm defence”: • The allegedly failing firm would in the near future be forced out of the market because of financial difficulties if not taken over by another undertaking. • There is no less anti-competitive alternative purchase than the notified merger. • In the absence of a merger, the assets of the failing firm would inevitably exit the market. It remains to be seen how the criteria above will be interpreted in the current situation. In any event, a distinction should be drawn between the short-term effects of the aforementioned crisis, which may not change a competition authority’s assessment, and long-term consequences, which could impact the result of the same assessment. A different but equally relevant and exceptional situation to consider regards the provision in the EU Merger Regulation173 and notably in the Competition Act, which addresses acquisitions which would otherwise be considered for the purposes of merger control174. Focusing on the Competition Act, such an 172 For more detail, see paragraphs 89 and following of the Chapter VIII. FAILING FIRM of the European Commission’s 2004 Guidelines on the assessment of horizontal mergers under the Council Regulation on the control of concentrations between undertakings. 173 Council Regulation (EU) No 139/2004 of 20 January 2004 on the control of concentrations between undertakings. 174 Article 36(4) of the Competition Act. See above In order to carry out its mission, the CA “shall be guided by the criterion of public interest in competition enforcement and advocacy, and to this end it may define priorities in the handling of issues that it is called on to analyse”. These competition policy priorities are due to be published by the CA on its website during the last quarter of each year and must not make any sectoral reference where its sanctioning powers are concerned. The domestic competition framework comprises first and foremost the Portuguese Competition Act (“Competition Act”). The intricate wording of article 7 of the Competition Act is worthwhile referring to: and relevant doctrine on this topic, notably the one mentioned in note 41. This is equivalent to Article 3(5) of Council Regulation (EC) No 139/2004 of 20 January 2004 on the control of concentrations between undertakings (the EU Merger Regulation) but specific features should be considered nonetheless.
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