The enforcement of competition law in Spain has experienced important changes during the last two and a half years. A new Act (Act 15/2007, on Defence of Competition, ADC) entered into force, creating a new Competition Administrative Authority (Comision Nacional de la Competencia, CNC). In line with the EU experience, a leniency programme has been enacted. This programme foresees immunity or the reduction of fines to those companies collaborating with the CNC in order to detect and repress a cartel in breach of competition rules.
The results at present are well known: there has been a significant increase in both the number of cartel proceedings initiated by the CNC ex officio and the amount of Spanish companies dawn raided by surprise by officials of the CNC.
One may wonder what is next to come in the competition regime in Spain in the short and medium term. In my opinion, first of all we may expect an important number of decisions of the CNC resolving the cases initiated after the Spanish leniency programme entered into force.
The judicial review of those decisions by the competent Judicial Courts (Audiencia Nacional and, ultimately, Tribunal Supremo) will finally establish the case law applicable to the new legal framework set up by the ADC. There are topics such as dawn raids, the standard of proof or the applicability of the new CNC’s criteria for the calculation of fines for which these decisions and their eventual judicial review are especially anticipated.
Moreover, attention should be paid to the amendments of the current competition regime that are currently proposed in the draft Act on Sustainable Economy (the draft ASE), recently sent to the Spanish Parliament by the Government.
These amendments are aimed, on the one hand, to apply to the functioning of the CNC most of the regulation improvements foreseen draft for Spanish regulators in the energy, telecom and postal sectors. That will entail, for instance, that the number of members of the Consejo of the CNC (the decision-making body of the CNC) will be reduced to five (including its President), instead of the seven currently foreseen in the ADC.
Moreover, the draft ASE also foresees a relevant material amendment of the ADC in the field of concentrations. In Spain, concentrations must be notified to the CNC, prior to execution, when the transaction meets either a turnover threshold (based on the turnover of the merged companies) or a 30% market share threshold (ie when the transaction gives rise to an acquisition or increase of market share over 30% in any of the affected markets). Failure to file in these cases may entail high fines.
In most cases, filings are required because the transaction meets the referred 30% market share threshold. In fact, according to the CNC’s own statistics, during the first two years of application of the ADC, 129 out of 175 transactions of which the CNC was notified met the 30% market share threshold.
The draft ASE pretends to reduce this high ratio by including a de minimis exception to the 30% market share threshold. If finally passed, the transactions that meet that 30% market share threshold will not have to be notified if two cumulative conditions are met: (i) the target company’s turnover in Spain is below €10 million; and (ii) the aggregate market share of the merged companies in the affected markets is below 50%.
It remains to be seen whether this proposed amendment will effectively reduce the number of transactions notified to the CNC for meeting the 30% market threshold. In any event, this proposal must be welcomed as long as it contributes to the set up in Spain of a modern system of enforceability of competition rules of which all companies – irrespective of their size, turnover or sector of activity – should be aware.