Highlighting some of the main rules on administrative offences contained in the New Electronic Communications Act, as provided, in particular, in its Articles 178 et seq., as well as in the Framework Scheme of Administrative Offences in the Communications Sector (“Framework Scheme”), enacted by Law 99/2009, of 4 September 1999.

What are the penalties applicable in respect of electronic communications?

The New Electronic Communications Act still provides for a set of administrative offences, divided into three levels of seriousness (light, serious and very serious), punishable according to their seriousness and the dimension of the offender.

The Framework Scheme, which was also amended upon the enactment of Law 16/2002, of 16 August 2002, applies to the proceedings related to these offences.

What has the New Electronic Communications Act added to the list of existing administrative offences?

The penalties applicable for failure to comply with the obligations imposed on operators did not undergo any relevant changes with the New Electronic Communications Act, particularly regarding the classification of administrative offences according to their seriousness.

The most significant changes relate to offences that, as a result of the revision of the Act, no longer have a purpose (such as the obligations of the universal service provider with respect to public payphones or telephone directories). Consequently, their violation is no longer considered an administrative offence. The new obligations arising from the New Electronic Communications Act have, however, been associated to a type of administrative offence.

What are the amounts of the administrative fines applicable in the event of an offence?

The New Electronic Communications Act did not change the amounts established under its predecessor's framework. The administrative fines vary according to the level of seriousness of the offence and the dimension of the agent (individual, micro, small or medium-sized enterprise, or major enterprise).

Thus, depending on the seriousness of the offence, administrative fines can range, for major enterprises, between € 2,000 and € 100,000 (light offences), between € 10,000 and € 1,000,000 (serious offences) and between € 20,000 and € 5,000,000 (very serious offences).

What are the criteria to establish the dimension of the enterprise?

Besides approving the New Electronic Communications Act, Law 16/2002, of 16 August 2002, also amended the Framework Scheme. New rules were defined to classify the dimension of offenders (Article 7(6)(a) of the Framework Scheme):

a)    Micro-enterprise (i) has fewer than 10 employees, (ii) has an annual turnover or total annual balance sheet not exceeding 2 million euros, and (iii) its share capital or voting rights are not directly or indirectly held by an enterprise or group of enterprises in any of the other categories;

b)    Small enterprise has (i) fewer than 50 employees, and (ii) an annual turnover or total annual balance sheet not exceeding 10 million euros. Also includes micro-enterprises that have 20% or more of their share capital or voting rights directly or indirectly held by a small enterprise or set of small enterprises;

c)    Medium-sized enterprise has (i) fewer than 250 employees, and (ii) an annual turnover not exceeding 50 million euros or a total annual balance sheet not exceeding 43 million euros. Also includes enterprises that may not meet these requirements, but which have 20% or more of their share capital or voting rights directly or indirectly held by a medium-sized enterprise or group of medium-sized enterprises;

d)    Major enterprise has (i) more than 250 employees, and (ii) an annual turnover exceeding 50 million euros or a total annual balance sheet exceeding 43 million euros. Also includes enterprises that, while meeting the economic requirements and the average number of employees foreseen for micro, small and medium-sized enterprises, have 20% or more of their share capital or voting rights directly or indirectly held by a major enterprise or set of major enterprises.

This classification is established based on the financial data of the year prior to the year of prosecution, without prejudice to the possibility of justifiably challenging the assigned classification by submitting new facts.

If ANACOM is unable to determine the dimension of the offending enterprise, the administrative offence framework foreseen for medium-sized enterprises will apply, without prejudice to the possibility of subsequently providing proof of the true dimension of the enterprise (Article 7(10) of the Framework Scheme).

Can penalties other than administrative fines apply?

The New Electronic Communications Act also provides that ancillary penalties may be applied for certain types of offences (Article 179 of the New Electronic Communications Act), with no changes from the previous framework. Such ancillary penalties may include:

(i)    forfeiture of objects to the benefit of the State;

(ii)   prohibition to engage in the business for up to 2 (two) years; and

(iii)  debarment from comparative or competitive selection procedures for up to 2 (two) years.

Can directors and officers be held liable for administrative offences committed by corporate persons?

Any natural person can be held liable for the administrative offences foreseen in the New Electronic Communications Act, provided that they participated in the commission of the offence, in which case they will be charged the administrative fines foreseen for natural persons. This possibility already existed in the previous Electronic Communications Act since individuals may exercise, when duly authorised, the activity of network provider and electronic communications service provider.

A distinct new issue is the possible liability of members of governing bodies and those who hold management positions, as well as those responsible for the management or supervision of the areas of activity of legal entities in which an administrative offence is committed, in cases where they were aware (or should have been aware) of the unlawful practice and failed to take appropriate measures to prevent or stop it (Article 3(4) of the Framework). This is one of the most striking aspects, in terms of administrative offences, introduced by the new framework.

The legislator is now thus allowed to foresee, in any statute containing a list of administrative offences in the communications sector, the possibility of applying to members of governing bodies and those who hold management positions, as well as those responsible for the management or supervision of the areas of activity of the legal entity in which an administrative offence is committed, the fine applicable to the legal entity for the violation (by omission) of their duties, even if they did not directly take part in the commission of the offence.

Does this framework already apply to the list of administrative offences set forth in the New Electronic Communications Act?

Despite the introduction of the enabling provision in the Framework Scheme and the fact that this possibility was discussed during the preparatory work of the new framework, the legislator did not determine which offences under the New Electronic Communications Act members of the governing bodies and those who hold management positions, as well as those responsible for the management or supervision of the areas of activity of the legal entity in which an offence is committed, can be held liable for in these terms.

This will require an amendment to the New Electronic Communications Act to establish which administrative offences can generate liability for members of governing bodies and those who hold management positions, as well as for those responsible for the relevant areas of management or supervision.

Do all administrative offences follow the same proceedings?

ANACOM typically initiates common administrative offence proceedings by issuing charges, which are notified to the defendant so that it can submit its written response and request additional evidence prior to the Regulator issuing a decision.

With the changes introduced in the Framework Scheme, the legislator has facilitated the use of other forms of proceedings, in simpler and less serious cases, to bring the proceedings to a faster conclusion.

The possibility of resorting to the warning procedure (Article 15 of the Framework Scheme) is introduced, regardless of the seriousness of the offence in question (not just for light offences), provided that the offence is remediable and has not resulted in significant injury, and it is clarified that the final decision is not a conviction.

The restriction on summary proceedings (Article 21 of the Framework Scheme) for light or serious administrative offences is also lifted, giving ANACOM the discretion to assess the seriousness and specific unlawfulness of the offence or the degree of guilt, and to decide whether to resort to this type of proceedings.

When can the administrative fine be paid voluntarily?

The changes to Article 23(1) of the Framework Scheme restrict the situations in which voluntary payment of the administrative fine is admissible to minor offences and serious offences committed with negligence (it previously covered minor, serious and also very serious offences committed with negligence).

Voluntary payment entails the dismissal of the proceedings, but still counts as a conviction, for the purposes of verifying the requirements of a repeat offence.

How are notices served in administrative offence proceedings?

The amendments to the Framework Scheme show an intention to dematerialise the administrative offence proceedings by extending the forms of notification, innovatively providing for the possibility of notification through (i) the Public Electronic Notification Service (SPNE) or an electronic service to be provided by ANACOM; and (ii) email, in addition to the traditional forms of notification.

Notification by email is only valid with the express consent of the notified party. Express consent is defined as the use of email, in the context of the proceedings in question, either by the notified party itself or by its attorney, as a means of contacting ANACOM.

Can appeals be filed against ANACOM’s decisions?

The amendments to the Framework Scheme clarify that decisions, orders and other measures adopted by ANACOM in the context of administrative offence proceedings (and not only decisions imposing a fine) may be challenged before the Competition, Regulation and Supervision Court (Article 32(3) of the Framework Scheme).

The appeal only has suspensive effect regarding decisions that determine the application of administrative fines or ancillary penalties or that concern matters subject to court secrecy (Article 32/4 of the Framework Scheme).

Can ANACOM file appeals against court decisions and orders?

As a result of the legislative changes, ANACOM may now appeal against judgments and orders issued by the court, including on nullity and other preliminary or incidental matters or the application of interim measures (Article 32(8) of the Framework Scheme).

Key Takeaways

The New Electronic Communications Act does not significantly change the existing penalty framework.

Breach of the duties set forth in the New Electronic Communications Act remains an administrative offence, and this breach is escalated, as is the corresponding penalty, according to the seriousness of the offence and the dimension of the offender. The criteria for classifying enterprises have, however, been amended.

The Framework Scheme now foresees the possibility of creating, in specific regimes, a type of administrative offence concerning the violation of supervisory duties by members of governing bodies and those who hold management positions, as well as those responsible for the management or supervision of the areas of activity of the legal entity in which an administrative offence is committed. If such individuals know of the offence and fail to prevent or put an end to it, they may be subject to the same fine as the legal entity to which the offence is attributed, especially reduced. No such type of offence has, however, been established in the New Electronic Communications Act for the time being.

Regarding forms of proceedings, ANACOM is now given greater freedom to apply special forms of proceedings to promote speedy resolution, but the possibility of voluntary payment of the administrative fine is restricted to light and serious offences committed with negligence.