Currently, the existing rules in the context of COVID-19 pandemic and related to the electronic communications sector are regulated by Decree-Law No. 56/2021, of 7 July (which refers to the guaranteed provision of essential services), as amended by Decree-Law No. 70-A/2021, of 6 August and Decree-Law nr. 119-B/2021, and the Council of Ministers Resolution nr. 181-A/2021.

Under these rules, the following applies: 

  • Prohibition to suspend the provision of essential services - including electronic communications services;
  • Until 31 March 2022, consumers who are unemployed or who have suffered a loss of income within their family unit that is equal to or exceeds 20% when compared to the previous month’s income may: (i) unilaterally terminate electronic communications service agreements (this does not give rise to a right to compensation of the supplier of the service); (ii) temporarily suspend electronic communications service agreements (without penalties or additional clauses), resuming on 1 April 2022 or any other date to be agreed between supplier and customer.
  • The guaranteed provision of electronic communications is assured even in the event of unemployment, reduction of income in the family unit that is equal to or exceeds 20 %, or due to COVID-19 infection, until 31 March, 2022;

If payments are owed by the client, the provider and the client should draw up a payment plan, which must be appropriate in light of the client’s current income.

 

How is the exceptional and temporary suspension of contracts for the provision of essential services being processed?

Law No. 29/2021, of 20 May 2021, foresees that micro and small companies, sole proprietors and any other companies whose facilities are subject to closure by legal or administrative determination adopted within the scope of the control measures of Covid-19, may request the suspension of water, gas, energy and electronic communications contracts, regardless of binding obligation clauses or other applicable ones, without the payment of new charges and fees.

Only companies in a business crisis can resort to this mechanism. The situation of business crisis, is defined under the terms of the diploma, as those who have had a break in their billing amount equal to or greater than 25% in a calendar month immediately preceding the calendar month to which the suspension request refers to (i) compared to the same month of the previous year or of the year of 2019; or (ii) compared to the monthly average of the six months prior to that period. For those who started their business activity less than 24 months ago, the calculation of the break in billing is carried out in the average monthly billing ratio between the beginning of the activity and the penultimate full month preceding the calendar month to which the suspension request refers to.

The suspension cannot exceed the period of 60 days (non-renewable). However, for companies whose facilities are subject to closure due to legal or administrative order adopted as part of Covid-19 control measures, the suspension period may last as long as such measure remains in effect. In any case, the required suspension period will be added to the contractual term.

The suspension request must be submitted 15 days in advance and the suspension shall commence on the first day of the month following the request. The suspension will have two main effects:

(i) Both parties are released from the obligations arising from the service provision contract concluded (with the exception of the supplier’s obligation to carry any urgent action to ensure the equipment’s safety);

(ii) The time during which the suspension lasts shall not be considered as a period of performance of the contract for the purposes of the loyalty period foreseen.

ANACOM should approve within 5 working days after the entry into force of the diploma (i.e., May 21, 2021) the model for the formal suspension request. After this approval, the service companies have 5 working days to make it available electronically and at their service stations.

The approval of this legal regime does not prejudice the rights foreseen in Article 361 of Law No. 75-B/2020, of 31 December 2020, as the possibility of opting for the maintenance of supply services contracts, without resorting to their suspension, remains in force.

In the event of a breach of the established obligations, ANACOM may issue an order or warrant, setting a period of time for compliance or for the ending of the illegal action. Continued non-compliance constitutes, under the terms of the Portuguese Electronic Communications Act (Law No. 5/2004, of 10 February 2004), a very serious administrative offence, punishable with a fine of up to 5 million euros (under the regime applicable to large companies).

The above-mentioned legal regime entered into force on the day following its publication (i.e., May 21, 2021) and will remain in force until the end of the year in which exceptional and temporary measures to respond to the COVID-19 pandemic disease is terminated. 

 

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This information is being updated on a regular basis.

All information contained herein and all opinions expressed are of a general nature and are not intended to substitute recourse to expert legal advice for the resolution of real cases.