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After several months of public consultation, the Portuguese National Authority for Communications (ANACOM) has published on 14 December the draft Regulation on sub-assignment of E.164 numbers of the National Numbering Plan.

Under this Regulation, numbers assigned by ANACOM to companies offering electronic communications networks and services may be sub assigned to other companies, which may then offer electronic communications services using those numbers from their own retail offers and assigning them to beneficiary end users.

This means that these retail companies will present themselves to their own customers as providers of the service and will be responsible to them for its provision and quality. In this scheme, any contractual relationship is excluded between the customers and the companies on whose networks and services the offers are based.

Regarding the conditions for the sub-assignment, we highlight the following aspects:

• The beneficiary and the electronic communications companies must inform ANACOM the start of the retail offer of the electronic communications services;
• A contract between the electronic communications companies and the beneficiary must exist, providing for beneficiary support and the criteria for sub assignment, recovery and return of the numbers;
• The beneficiary can only allocate the sub assigned numbers to end-users of its own retail offers, being forbidden to sub assign them;
• Information reporting obligations to ANACOM are increased and obligations for the management and use of assigned and sub-assigned numbers are strengthened.

This business model is expected to reduce costs and charges associated with the use of numbers, which is especially relevant for companies with less national presence or operating in niche markets, promoting the competition in the provision of electronic communications networks and services.

The regulation is awaiting publication in the Portuguese official journal and will enter into force on the day following its publication.

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Portugal has finally transposed Directive (EU) 2019/1151 of the European Parliament and of the Council of 20 June 2019, which amends Directive (EU) 2017/1132 by opening the door to the use of digital tools and procedures regarding the registration of foreign commercial companies. Decree-Law 109-D/2021, which came into force last Friday, will allow the registration online of permanent representations of foreign limited liability companies.

Those interested in registering a company in Portugal will access a website – that needs to be set up by the Portuguese Government to make this possible - and submit copies of the following:

• Document attesting their powers;
• Company's resolution approving the registration of the permanent representation;
• Appointment of the local representatives and their powers;
• Articles of association and updated registration certificate of the company.

All this and identification details of the company will be available at no cost for consultation in the European e-Justice Portal.

Two other relevant measures have also been approved last Friday:

• Whoever (solicitors, notaries, etc.) is registering a company online may provide his/her electronic address, to be included in the register and in the registration certificate as the person applying for the registration;
• In the registration of directors, it becomes mandatory to submit a declaration of acceptance of the appointment and a declaration stating that the appointed directors are not aware of any circumstances that may inhibit them from holding office.

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The Portuguese Government presented last week a Digital Transition Action Plan that includes Digital Innovation Hubs (DIHs) and Free Technological Zones (ZLT - Zonas Livres Tecnológicas). Digital Innovation Hubs are collaborative networks of specific digital centres in cybersecurity tourism, health, and other sectors, with the objective of disseminating advanced digital technologies to companies, especially small and medium companies, through the development, testing, and experimentation of those technologies. One of the objectives for DIHs is to be drivers of the digital transformation of companies, stimulating the incorporation and integration of artificial intelligence, cybersecurity, and supercomputing in the adaptation of different business models.

In this context, the 17 DIHs projects already approved (by Order 6269/2021) will have access to annual funding of up to one million euros each (from the Recovery and Resilience Plan) - an amount that can be doubled if these hubs become part of the European network: Produtech (industry and manufacturing), DIH4GlobalAutomative (mobility), Connect 5 (Telcos and TICE), InnovTurismo (tourism), Portugal Blue Digital Hub (sea economy), Azores Digital Innovation Hub (regional), Smart Island Hub (regional), C-Hub (cybersecurity), PTCentroDIH (regional), Defence4Tech Hub (defense), Digi4Fashion (fashion and footwear), DIGITALbuilt (construction), ATTRACT DIH (AI and data science), AI4PA Portugal (public administration), SFT-EDIH (agro-food sector), DIH4ClimateNeutrality (urban sustainability) and DigiHealthPT (health).

The Free Technological Zones (regulated by decree-law 67/2021) are geographically delimited spaces where companies/researchers will be able to experiment and test, under real conditions, products and technologies that are still in the experimentation phase. The Portuguese Government expects ZLT will bring in foreign investment and international projects to stimulate the Portuguese entrepreneurial ecosystem.

Investors interested in promoting a ZLT must submit an expression of interest to the National Innovation Agency (ANI) (filling out a specific form). The selection criteria to incorporate a ZLT are:

• Priority areas, sectors of activity or technologies for testing - always safeguarding the possibility of testing technologies, products, services, and processes that cross several areas or sectors;
• The geographical scope of the ZLT;
• The objectives of boosting the business in the selected geographical delimitation;
• The availability of resources, including human, material and infrastructure, to the promoters to conduct the tests;
• The identification of the managing entity responsible for the management, operation and maintenance of the ZLT, or the process for selecting the managing entity; and
• The conditions for access to the ZLT by the promoters, as well as all the requirements for conducting the tests, and for termination and suspension of the tests.

Three entities that have already filed a ZLT project with ANI: CEiiA, S. João Hospital Center and the Portuguese Navy, through its Operational Experimentation Center. The Portuguese Government has also announced the creation of three energy sector specific ZLT: one in Viana do Castelo for offshore and nearshore wind farm projects; a second one in Abrantes (at the now extinct coal power Pego unit) for renewables’ production, storage and self-consumption; and a third one at the river Mira parameter for energy-agricultural dual projects.

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Law 82/2021, of 30 November strengthens the control and monitoring of access to contents protected by copyrights and related rights in the digital environment. These control and supervision powers will be carried out by the Inspectorate General for Cultural Activities (Inspeção-Geral das Atividades Culturais - IGAC), the local supervisory authority for copyright and related rights.

Several creations/works are protected by copyright, among others: (i) literary works such as books, magazines, newspapers, lectures, lessons, speeches, poems; (ii) dramatic and dramatic-musical works; (iii) choreographic works; (iv) musical compositions with or without lyrics; films; television programs; (v) artistic works such as drawings, paintings, sculptures, ceramics, photographs, applied arts, illustrations, architectural designs and advertising slogans.

The digital environment is suited to illicit sharing of IP protected content, which rapidly surfs the Internet and may be difficult to control. The illicit disclosure of IP-protected content may occur by means of:

• Communication, sharing, or storage of protected content without consent from the holders of copyright and related rights;
• Making services or means intended for use by third parties in violation of copyright and related rights, or intended to interfere with the normal and regular functioning of the market for works and performances available; and/ or
• Provision of services to counteract effective technological measures for the protection of copyright and related rights or information devices for electronic rights management.

In a recent Portuguese case involving the illicit sharing of IP protected periodicals and cinematographic/audio-visual works by Telegram channels, the Intellectual Property Court prohibited this practice ordering an injunction filed by Gedipe - Association for the Management of Copyrights, Producers and Publishers and one of its associates Visapress.

It is, therefore, no coincidence the time chosen for the publication of this law, which comes into force on 29 January 2022, and defines a set of specific measures for the removal of illicit IP protected content available on the Internet. Among these measures are:

• Following an inspection by IGAC (by its own initiative or complaint), the person responsible for the illicit making available of protected content will have 48 hours to cease and remove the service or content, after notification by IGAC;
• If the 48-hour deadline is not followed, IGAC will notify the intermediary network service providers to remove or to disable access to the protected content, for example, by preventing access to a certain URL or associated domain name system (DNS), or, in certain cases, access to content provided by a certain IP;
• If it is not possible to identify the person responsible for making the content available or when the 48-hour period does not have the desired useful effect, for example because the content is available for a limited time or in real time, IGAC will directly notify the intermediary providers to proceed with the removal of the content;
• Intermediary network service providers must adopt a proactive and cooperative conduct with IGAC: (i) immediately inform IGAC when they become aware of illegal activities taking place via the services they provide (in case of obvious illegality) and (ii) comply with IGAC's requests to identify the recipients of the services with whom they have storage agreements.

Without prejudice to other sanctions, the illicit sharing of IP protecting content is an administrative offense punishable by a fine between €5,000 (five thousand euros) and €100,000 (one hundred thousand euros).

IGAC’s final decision must be notified to the complainant, the person responsible for the website or service and the intermediary provider of hosting services, being subject to appeal, in first instance, to the Intellectual Property Court, and in second instance, to the Court of Appeal.

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Following the declaration of state of calamity in the entire Portuguese continental territory until March 20, 2022, a new law (Resolution of the Council of Ministers) was published establishing exceptional and temporary measures, applicable to the entire continental territory, to contain the COVID-19 pandemic.

Here are the main measures with labor impact that come into effect as of December 1:

Remote Working

Telework is again recommended whenever the worker’s duties allow it, maintaining in force the rules regarding schedule mismatch for in-person work situations.

Teleworking is still compulsory, without the need for a written agreement between the employer and the employee, in the following situations:

• The worker, upon medical certification, is covered by the exceptional regime of protection for people with immunosuppression conditions, pursuant to article 25-A of Decree-Law no. 10-A/2020, of March 13, as amended;
• The employee has a disability, with a degree of incapacity equal to or greater than 60%;
• The employee has a dependent child or other people dependent on them, regardless of age, with a disability or chronic illness, who, according to the guidelines of the health authority, is a patient at risk and is unable to attend classroom or group teaching and training activities.

Between January 2 and January 9, 2022, it is mandatory to telework, if possible, depending on the worker’s type of work, and if the employee has the adequate conditions to perform them. The obligation applies to all municipalities in mainland Portugal, with extension, with the necessary adaptations, to the Direct and Indirect Administration of the Portuguese State and the recommendation of its application to other public entities. In these situations, there is no need for a written agreement.

Exceptionally, the employer may refuse to implement remote working. In such situations, they must communicate their decision to the employee in writing and in a reasoned manner.

The employer can only refuse to implement telework in the event of: (i) Incompatibility between the employee's duties and remote work; (ii) Lack of adequate technical conditions for the implementation of remote working.

If the Employer refuses to implement telework, the employee may, in the three subsequent working days, ask ACT to verify the requirements set out in the written justification submitted by the employer.

ACT submits its decision within five working days, considering the following factors: (i) the duties for which the worker was hired; (ii) Previous performance of the duties remotely; (iii) Previous performance of the activity through other means of providing remote work.

The employee may refuse to telecommute, if he/ she considers that he/ she does not have the adequate conditions to perform their duties remotely, namely technical or housing conditions. The employee must inform the employer in writing, stating the reasons for his/ her impediment.

Teleworkers have the same rights and duties as other employees under the terms of the Labor Code or applicable Collective Regulatory Labor Instrument (IRCT).

The worker is also entitled to the necessary work equipment for the provision of telework. Even so, when such availability is not possible, with the consent of the worker, his/ her duties can be performed remotely through the worker's personal equipment. In these situations, the employer is responsible for programming and adapting the equipment.

Diagnostic tests

Workers at healthcare facilities, educational, vocational training and higher education institutions, therapeutic communities and social integration communities, temporary shelter centers and emergency accommodation centers may be tested for SARS-CoV-2. Tests may also be carried out on other workers to be defined by the Portuguese Health Authority (DGS).

The employer is prohibited from recording or storing test results, including proof of testing, associated with the person's identity, except with the person's express consent.

In situations where the test results make access to the workplace impossible, absence is considered justified.

Body temperature measuring

Workers may be subjected to body temperature measurement; no physical contact is allowed.

Temperature measurement must be performed through non-invasive means, at the access control to the workplace. Recording body temperature linked to the worker's identity is not allowed, unless expressly authorized.

Access to the workplace may be prevented whenever the worker: (i) refuses to take body temperature; (ii) has a result above normal body temperature (a temperature of 38ºC or more).

In cases in which the result of the measurement determines that it is impossible for an employee to access the respective workplace, the absence is considered justified.

A new Decree-Law that extends the deadline for several exceptional measures was also published:

• Exceptional and transitional work organization legal framework (Decree-Law 79-A/2020, as amended) until March 31, 2022, regardless of the possibility of extension after consultation with social partners; and
• Extraordinary income support for workers (Law 75-B/2020, of December 31, in its current wording) created to compensate losses caused by the pandemic, until the last day of February 2022.

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After a public announcement session held on November 24, the first Portuguese Floating Solar Auction launched last Friday and includes 7 lots with capacity from 8 MVA (Salamonde) to 100 MVA (Alqueva), in a total of 263 MVA. The auction is two folded as it comprises the allocation of:

• Reserve capacity for injection into the grid; and
• Private use titles over public water domain of the seven reservoirs dams that make up the auction lots.

This auction is organized in three phases:

• Eligibility phase: From January 29, 2022 until March 2, Promoters shall first register in the online platform https://leiloes-renovaveis.gov.pt/ and provide basic corporate information regarding to the company bidding for the auction and its legal representative, as well as a provisional deposit in the amount of 10.000€/MW calculated in accordance with their bidding intentions;
• Bidding phase: Following the admission and exclusion of applications, the jury will notify Promoters with a prior notice of 5 days from the start date of the bidding phase. In this phase, Promoters submit a bid through the online platform applying for one of the following remuneration schemes that will remain valid for a period of 15 years from the entry into operation of the project: (i) a fixed compensation where promoters bid for a contribution to be paid to the National Electric System (SEN) in €/MWh, or (ii) a variable fee, where promoters will be entitled to receive a variable fee equal to the auction closing price in €/MWh.
• Allocation phase: Within 5 days from the closing of the bidding phase, the winning bidders will be awarded with the reserve capacity title by the Portuguese energy authority, Direção-Geral de Energia e Geologia (DGEG), with the right to use public water resources of the relevant reservoir, on a provisional basis, by the Portuguese environmental agency, Agência Portuguesa do Ambiente (APA). Then, those promoters must provide two performance bonds: (i) one in the amount of €20,000/MVA to DGEG upon the award of the reserve capacity titles, and (ii) another in the amount of €40,000/MVA to APA upon execution of the concession contract of the reservoir dam and the granting of the production license by DGEG.

After the awarding of the bids, promoters must meet a strict deadline regarding licensing obligation, under penalty of execution of the performance bond and expiration of the titles. Counted as of the allocation of the reserve capacity title, promoters shall:

• Obtain the production license and the approval of the execution project of the project within a period of 18 months, or 24 months (if the plant requires environmental analysis);
• Obtain the operation license within a period of 42, or 48 months, as applicable; and
• Start operation of the power 30 days after the award of the operation license.

Auction rules and specifications are available on the online platform and requests for clarifications may be submitted by Promoters through the email address jurisolar@dgeg.gov.pt until 1:00 p.m. (GMT+1) of January 10, 2022.

Launching this auction under the present market circumstances is a challenge to the outgoing Portuguese government energy price strategy, where the auctions of capacity have been used as an instrument to lower the energy prices to end-consumers.

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The Portuguese Competition Authority (AdC) once again sanctioned three of the biggest supermarket chains in Portugal – Auchan, Modelo Continente and Pingo Doce – for a ‘hub-and-spoke’ arrangement, this time with the common food supplier Bimbo Donuts of packaged bread, Donuts, Bollycao or Manhãzitos.

‘Hub-and-spoke’ arrangements are horizontal restrictions on the supplier or retailer level (the ‘spokes’), which are carried out through vertically related players that serve as a common ‘hub’ (e.g., a common retailer or service provider). The hub enables the coordination of competition between the spokes without direct contacts between the spokes.

The three largest food retailers, Auchan, Modelo Continente and Pingo Doce, established the alignment of retail prices in their supermarkets through contracts entered upon with Bimbo Donuts. The AdC investigation determined that the practice lasted for at least eleven years - between 2005 and 2016.

Although ‘hub-and-spoke’ arrangements differ from traditional horizontal cartels in the lack of direct communication between the horizontal competitors, the adverse market effects may be similar – both may result in a hard-core price-fixing cartel, through a common supplier, thus restricting price competition between players and depriving consumers from price differentiation.

AdC considered these practices to be highly damaging to consumers since the chains involved represent a large part of the Portuguese food retail distribution market, affecting the generality of the Portuguese population. Such a practice jeopardizes competition, depriving consumers from opting for better prices, while generating profit for the entire distribution chain, including supplier and supermarket chains.

For competition authorities, it could be however challenging to prove a ‘hub-and-spoke’ arrangement. The strategic nature of information exchanged between suppliers and retailers (which could be a necessary pro-competitive practice) cannot be the ultimate criterion for an unlawful ‘hub-and-spoke’ arrangement.

It can be tricky to set boundaries between legitimate exchanges and indirect horizontal collusion and be necessary to go beyond the exchange of forward-looking pricing information and try to demonstrate that the operators’ goal was to carry out indirect horizontal collusion.

The following potential issues could arise: (i) the ‘hub-and-spoke’ evidence (e.g., retail price setting/alignment, control and monitoring of retail prices, retail price deviation corrections); (ii) the legal framework of the arrangement, depending on either it is an horizontal or vertical arrangement; (iii) the means used to carry out the anticompetitive practice, e.g. Resale Price Maintenance agreements (RPM); and (iv) the purpose and awareness of the involved players.

Considering this, it is apparently justified that AdC has provided evidence for the allegedly eleven year arrangement available at its website.

Bimbo Donuts will have to pay the largest fine amount, € 7.353 million, followed by Pingo Doce, with € 7.196 million, Modelo Continente, with € 7.161 million and Auchan with € 2.981 million, in a total of € 24.691 million. The fines imposed were determined by the sales volume of the four undertakings in the affected markets during the duration of the arrangement.

Under Portuguese Competition Law, these fines are limited up to 10% of the overall annual turnover of the involved undertaking(s). The 10% maximum limit may be based on the turnover of the group to which the undertaking belongs if the parent company of that group exercised decisive influence over the operations of the subsidiary during the infringement period.

The starting point to determine the fine is the percentage of the undertaking’s annual sales regarding product related to the infringement during the last full year of the violation. The fine is also linked to the duration of the infringement. For instance, an infringement that lasts for eleven years is assumed to be eleven times more damaging than an offense that lasts for three years.

All the undertakings involved said to reject AdC’s decision and that they were going to appeal. Appealing will not, however, suspend the execution of the fines. Undertakings may however request the appeal court to suspend the enforcement of the decisions if (i) they demonstrate that it causes them considerable prejudice and (ii) they provide an effective guarantee in its place.

In December 2020 and recently, on November 2, 2021, AdC had already sentenced these and three other supermarket chains and three beverage suppliers, Sociedade Central de Cervejas, Primedrinks and Super Bock, for the same type of practice.
‘Hub-and-spoke’ arrangements in the large retail chains sector are in the loop of AdC and it is likely that new developments are expecting in a near future.

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The Portuguese government published yesterday the bases of the new solar energy auction dedicated to floating solar.

The new legislation unifies tender procedures for the simultaneous allocation:

• Of reservation of capacity titles for the injection into the Public Service Electricity Network of electricity from floating photovoltaic plants to be installed in water dams; and
• Of titles for the private use public domain for such purpose.

Unlike the 2019 and 2020 auctions, this auction will focus exclusively on water reservoirs. Promoters will make not one, but two bids:

• One bid for the price to produce electricity through solar energy; and
• Another for the occupation of the public water domain.

In any case, the bidding will again follow the two already available modalities: remuneration to the network and fixed tariff, for a period of 15 years.

This solar energy auction will include the Paradela, Alto Rabagão, Vilar Tabuaço, Salamonde, Alqueva, Cabril and Castelo de Bode reservoirs, with a total maximum implementation area of 445 hectares and an estimated total connection power of 362.5 MVA.

The procedure details for the new auction will be published in the next few days.

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The Portuguese government wants to leave its mark on the sector with a new regulatory framework for the National Electrical System (NES), which is under public consultation since November 10 and until November 24. Here is a list of the main points of the draft regulation to be submitted to the Portuguese Parliament by the end of November.

Prior control of NES’ activities and network planning

The differentiation between Ordinary Regime Generation (ORG) and Special Regime Generation (SRG) and the different procedures for licensing the activity of electricity generation will be extinguished.

The activities of generation, self-consumption and storage will be covered by a single regime of prior control which may take the form of prior notification, prior registration and operating certificate, or production and operating license.

The draft Decree-Law makes new investments in network infrastructures dependent on a cost and benefit analysis in relation to other alternatives, such as storage.

Tender mechanisms for the exercise of NES activities

The awarding of (i) Last Resort Supplier, (ii) Last Resort Aggregator, (iii) issuer of guarantees of origin and (iv) Logistics Operator for Switching Suppliers and Aggregators licenses will be subject to a prior public tender procedure.

The draft decree-law creates a new market agent: the integrated operator of the high-voltage, medium-voltage and low-voltage distribution networks, which will exercise the activity under a concession scheme, awarded after a prior public tender procedure.

Electricity generation and storage activities will be remunerated exclusively at market price or through bilateral contracts, eliminating once and for all the guaranteed remuneration regime. This notwithstanding the possibility of granting by public tender specific support schemes for production from renewable energy.

Active participation of consumers in electricity generation and in the markets

Passive consumers are to become active agents producing electricity for self-consumption or for the sale of surpluses and storage with:

• The installation of smart grid infrastructures, which include communications and energy data processing systems and technologies and smart meters;
• Consumer participation in electricity markets through the creation of the aggregator;
• New schemes for collective self-consumption and energy sharing through the establishment of energy communities.

The duties of the suppliers have been strengthened since they must offer electricity contracts at dynamic prices when they have more than 200,000 customers, provided the respective consumption facilities have a smart meter.

If the customer has a smart meter, the supplier is now also required to include in the bill a breakdown of average energy consumption by day of the week and time of day.

If the consumer has a smart meter, he shall be entitled, upon request, to access to the actual electricity consumption and the actual period of use, and this data shall be easily accessible and free of charge. The consumer is also entitled to additional information related to consumption history and detailed data regarding periods of use.

The draft Decree-Law also provides a scheme for the unlawful appropriation of energy.

New realities: re-equipment, hybrids or hybridization, and storage

Three Technological Free Zones (ZLT) are planned to facilitate development in new realities:

• The first intended for research and development pilot projects in the scope of offshore electricity generation, from renewable energies of oceanic source or location;
• The second to be developed under the decommissioning process of the Pego coal-fired thermoelectric power plant; and
• The last one, to be located in Perímetro de Rega do Mira, intended for the establishment of innovation and development projects in the scope of compatibility of land use for agricultural activities and electricity generation.

The draft also provides that the re-equipment of a solar or wind power plant will not subject to the environmental impact assessment procedure. Additionally, upon total re-equipment of the generating station, the connection power is increased up to a maximum of 20% of the connection power initially allocated, subject to a simple prior control procedure of mere amendment to the production license or prior notification only.

The first challenge to the market has been set: to respond within 15 days to such a broad project to change the legal framework of the Portuguese electrical system.

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MACEDO VITORINO released today the new edition of its report WHYPORTUGAL.

WHYPORTUGAL 2021 provides entrepreneurs considering investing in Portugal essential information on the creation and organisation of companies, partnership contracts, employment law, tax law, intellectual property, real estate and litigation.

After more than a year of pandemic with successive confinements, the second half of 2021 has been a time of recovery.

As part of the European response to the pandemic crisis, gave the Member States a total amount of €806.9 billion, Portugal adopted a Recovery and Resilience Plan (RRP), to be implemented until 2026, which seeks, among other things, to promote climate transition and digital transition, strengthen the National Health System, and invest in infrastructure and business capitalisation and innovation. By 2026, the government plans to invest around EUR 50 billion.

Since 2013, MACEDO VITORINO publishes the WHYPORTUGALreport annually, having created in 2018 electronic platform where the report is available, along with essential legal and economic information, including: legislation, official forms, international and national reports.

“The WHYPORTUGAL 2021 report reflects a country heavily scarred by the pandemic still and a chronic lack of improvement in key sectors as well, notably justice, public administration and taxation. The RRP promises significant investments in public administration and the public sector in general. Let us hope that they happen” said António de Macedo Vitorino, the partner responsible for the project.

“The main goal of the report is to provide an objective view of reality and, because of that, we cannot fail to point out that we are far from the countries of reference. But even so Portugal has shown that it has the capacity to attract international investors. Security, social consensus around the values of openness and freedom of European society, which are so important today, as well as the qualifications of our workforce are today the essential factors in attracting investors in all sectors, namely tourism and real estate, industry and technology” added António Vitorino.

WHYPORTUGAL 2021reviews the main aspects to be considered by foreign investors looking at Portugal as a country worth investing in: such as how to set up a business, government incentives, employment, tax system, intellectual property protection and judicial system.

Visit us at https://www.macedovitorino.com/en/why-portugal/.