This country-specific Q&A provides an overview to cartels laws and regulations that may occur in Spain.
This Q&A is part of the global guide to Cartels. For a full list of jurisdictional Q&As visit http://www.inhouselawyer.co.uk/practice-areas/cartels/
What is the relevant legislative framework?
The relevant legislative framework in Spain governing illegal agreements between undertakings, including cartels, is contained in the Competition Act 2007 [3 July 2007]. The Competition Regulations 2008 [27 February 2008] implement specific sections of the Competition Act 2007, including, inter alia, procedural questions related to the leniency programme. Spanish competition authorities must also apply Article 101 of the Treaty on the Functioning of the European Union (“TFEU”) in cases where restrictive practices potentially affect trade between EU Member States.
In particular, Article 1 of the Competition Act 2007 sets out a general prohibition on all agreements between undertakings, decisions by associations of undertakings and concerted practices which either have the object of, or which may lead to the effect of, restricting competition in all or part of the Spanish market. Agreements, decisions or concerted practices falling under the scope of such provision are illegal and void unless an exemption applies to them. That may be the case if they are deemed to improve the production or distribution of goods, or to promote technical or economic progress, subject to stringent requirements. Furthermore, according to Article 4 of the Competition Act 2007, the prohibition under Article 1 does not apply to agreements, decisions or concerted practices that result from the application of rules that have been enacted and have the force of law.
Additional Provision 4 of the Competition Act 2007 defines a cartel as any agreement or concerted practice between two or more competitors which has the aim of coordinating their conduct in the market or influencing competition by means of practices such as fixing or coordinating prices, allocating quantities, sharing markets or customers, including bid-rigging, restricting imports or exports or taking actions against other competitors. As a result of a recent modification of the Competition Act 2007, the concept of ‘cartel’ does not contain a condition that the agreement was kept secret.
Concerning the leniency programme, which is only available for cartels, although it was in place since 2008, the Leniency Notice 2013 was published by the former competition authority in order to enhance its transparency and predictability. Mere exchanges of sensitive commercial information referring to future parameters are usually considered by Spanish competition authorities as showing that there is a cartel.
To establish an infringement, does there need to have been an effect on the market?
Article 1 of the Competition Act 2007 is breached by agreements between undertakings, decisions by associations of undertakings, concerted practices and consciously parallel practices which either produce an actual or potential anticompetitive effect on the relevant Spanish market or have an anticompetitive object. Therefore, certain agreements, decisions and concerted practices, namely those whose purpose is price-fixing, quantity restriction, market or customer allocation or competitor foreclosure, are deemed to be inherent restrictions of competition and, thus, infringements of Article 1 of the Competition Act 2007 and, where applicable, Article 101 TFEU, there being no need to prove any actual or potential anticompetitive effect.
Does the law apply to conduct that occurs outside the jurisdiction?
The reference in Article 1 of the Competition Act 2007 to agreements, decisions and concerted practices that restrict competition ‘in all or part of the Spanish market’ is interpreted according to the general principle of the place of implementation, developed by the Court of Justice of the EU (“CJEU”) (see, for instance, judgment of 20 January 1994 in joined cases 89/85, 104/85, 114/85, 116/85, 117/85 and 125/85 to 129/85, A. Ahlström Osakeyhtiö and Others v Commission, paragraphs 16 to 18). That principle is an expression of the international public law principle of territoriality and determines that the agreement, decision or concerted practice in question must be intended to be implemented in Spain for Article 1 of the Competition Act 2007 to apply. Whether Article 101 TFEU also applies depends on whether it considered that trade between Member States may be affected.
Which authorities can investigate cartels?
Competition rules in Spain are enforced by the National Markets and Competition Commission (CNMC), whose statute is laid down in the Act of 2013 on the Spanish Markets and Competition Commission [4 June 2013]. The CNMC also has powers regarding the supervision and regulation over certain strategic sectors such as energy, telecommunications, railway and postal services.
Certain regional governments (Comunidades Autónomas) have also established a regional competition authority for the enforcement of the Competition Act 2007 within their jurisdictions. Regional competition authorities may have either full investigative and decision-making powers or only investigative powers, in which case the Board of the CNMC (that is, the decision-making body of the CNMC) adopts a decision on the basis of the enquiry conducted by the regional competition authority.
Therefore, the power to investigate cartel infringements, as well as other breaches of competition rules, is shared between the CNMC and the regional competition authorities. The latter may be competent provided that the scope of the investigated conduct does not exceed the territory of the corresponding region and does not otherwise affect market unity, economic balance among regions or constitutional rights, in accordance with the Act of 2002 on the Coordination between the State and the Regions in Competition Matters [21 February 2002]. In practice, regional competition authorities (whether they have investigative and decision-making powers or only investigative powers) inform the CNMC of every report filed with them and every procedure that they decide to open ex officio, so that the CNMC may present its opposition. If there is a conflict, a decision is made by an advisory committee(see below).
What are the key steps in a cartel investigation?
Competition investigations may be opened by the Directorate for Competition (the investigative body of the CNMC), either as a result of information provided by any person, or ex officio of its own motion, or on the motion of the Board. Recently, a whistle-blower letterbox has been added to the CNMC’s webpage for the public to report competition infringements. In cartel cases, the enquiry may be initiated by the Directorate for Competition further to a leniency application.
Before the formal procedure commences, preliminary proceedings are conducted in order to confirm that there are sufficient indicia pointing to an infringement. Such preliminary proceedings are not subject to any deadline and may consist in sending requests for information or conducting unannounced inspections at the premises of the investigated undertakings or the domiciles of their employees (see below). Given that the formal procedure has not been initiated yet at this stage, procedural guarantees in preliminary proceedings have not yet been fully recognised for the parties, although the information gathered by such means would be included in the file once it is open and a decision on confidentiality is adopted.
Should preliminary proceedings not result in the closing of the investigation by the Board, the formal procedure would be opened. From that moment, the parties enjoy full procedural rights, which include, inter alia, temporally unlimited access to the file and the possibility to request the confidential treatment of certain information provided by, or seized from, them in the course of proceedings. The deadline for the Board to adopt and notify a decision is 18 months under pain of expiry of the procedure. Within that timeframe, the Directorate for Competition is supposed to complete the investigation within 12 months, although non-compliance with this deadline does not entail the expiry of the procedure.
Regarding procedural milestones, the Directorate for Competition usually issues the statement of facts between the eighth and tenth month, for the parties to react within 15 working days, which may be extended for an additional seven working days, although observations may be made at any previous moment. Then, between one or two months later, a proposal for the decision is sent to the parties for comments within 15 working days, which may be extended for an additional seven working days. Subsequently, the decision proposal, together with the observations of the parties, is referred to the Board, which may ex officio or at the parties’ request order additional investigation proceedings, to which the parties may submit additional observations within seven working days; convene a hearing, which has been extremely unusual in practice until very recently (see below); or even undertake the legal requalification of facts, in which case the parties may submit observations within 15 working days. An early termination procedure is not available for cartel infringements.
What are the key investigative powers that are available to the relevant authorities?
In accordance with Article 27 of the Act of 2013 on the creation of the National Markets and Competition Commission, the CNMC is entitled to conduct unannounced inspections at the premises of undertakings on the grounds of an order signed by the Director for Competition. In this context, the CNMC have the following powers:
(i) entering any premises, facilities or means of transport of undertakings or associations of undertakings, as well as the domicile of their directors or employees, provided that either the affected party consents or the competent administrative court authorises it;
(ii) accessing any books, records or other documents in any format, which are accessible from those premises and related to the subject-matter of the inspection;
(iii) seizing copies of such documents in any format;
(iv) retaining such documents for a maximum of ten days;
(v) sealing any premises, documents or assets of the undertaking for the time and to the extent necessary for the inspection, providing that either the affected party consents or the competent administrative court authorises it; and
(vi) requesting and recording explanations on facts and documents related to the subject-matter of the inspection from representatives or employees of the undertaking.
According to Article 28 of the Act of 2013 on the National Markets and Competition Commission and Article 39 of the Competition Act 2007, the CNMC is also vested with the power to address requests to any natural or legal person or public body in order to obtain any information that is deemed necessary for the enforcement of competition rules, provided that sufficient reasons are stated and the request is proportionate to the aim pursued. The deadline to respond is ten working days unless otherwise provided - by stating reasons - and an extension for an additional five working days may be granted.
On what grounds can legal privilege be invoked to withhold the production of certain documents in the context of a request by the relevant authorities?
The privilege of communication between client and external lawyer may be invoked in the context of an investigation by the Spanish competition authorities. The grounds are that only those powers expressly conferred in the abovementioned legal provisions may interfere with the rights of the investigated parties proclaimed in Article 18 of the Spanish Constitution, which guarantees respect for the home and communications, and that the exercise of such powers may not affect other fundamental rights. Therefore, given that the legal privilege stems from the fundamental right of defence under Article 24(2) of the Spanish Constitution, it may not be impaired by the exercise of the investigative powers vested in competition authorities.
Nonetheless, the practice of the CNMC is to recognise legal privilege only in relation to communications with external counsel, while exercising its powers in relation to documents produced or exchanged with internal lawyers (see, for instance, decision of the Board of the CNMC in case R/AJ/060/17  Altadis 2). That practice is based on the case law of the CJEU (see judgment of 14 September 2010, C‑550/07 P, Akzo Nobel Chemicals and Akcros Chemicals v Commission, and of 18 May 1992, 155/79, AM & S Europe v Commission). On the contrary, in principle no distinction is made in relation to external lawyers qualified outside Spain. Furthermore, it is to be noted that the Spanish Supreme Court interprets legal privilege as a right that must be actively exercised by the parties by showing that the specific communications are protected (see appeal 6552/2009  STANPA, legal ground 2), and thus by identifying protected documents.
What are the conditions for a granting of full immunity? What evidence does the applicant need to provide? Is a formal admission required?
Only the first leniency applicant to provide the CNMC with sufficient evidence to either order an inspection or prove a cartel infringement is eligible for full immunity, provided that it meets certain substantive conditions and cooperates with the CNMC. Therefore, the CNMC will not grant full immunity if, at the time of the application, (i) it already has enough information to conduct the inspection, and, thus, it does not need to rely on the leniency submission, or (ii) it has already conducted the inspection.
Immunity from fines and any reduction in fines are subject to the fulfilment of the following requirements in Articles 65 and 66 of the Competition Act 2007:
(i) full, continuous and diligent cooperation with the CNMC throughout the investigation;
(ii) immediate cessation of participation in the infringement, unless the CNMC considers that participation to be necessary to preserve the effectiveness of an investigation;
(iii) no destruction of evidence relating to the leniency application;
(iv) no direct or indirect disclosure to third parties, other than competition authorities, of the submission of the leniency application or its content; and
(v) only in the case of full immunity applicants, no measures having been adopted to coerce other undertakings into participating in the infringement, i.e. the full immunity applicant not being the ringleader.
The applicant should provide the competition authority with the relevant information for identifying the applicant and other participants in the cartel, a description of the cartel and a list of the leniency applications that have been submitted before other competition authorities in relation to the same cartel, in accordance with Articles 46 and following of the Competition Regulations 2008. It should do so on the date it first submitted its application. The application must be submitted prior to the issuing of the statement of facts, and will be deemed complete once all the supporting evidence has been submitted. Deadlines for completion of the submission are discretionary for the CNMC, but the average time period for doing so is approximately 15 days.
The applicant must provide the CNMC with all relevant evidence at its disposal or information on the proof that might be obtained through an investigation. This includes, at least, all contemporaneous evidence in the applicant’s possession, such as minutes, annotations, emails or any other document that refers to the cartel. In theory, statements by employees could be sufficient in the absence of any other evidence. However, the CNMC may reject the application if its content is considered to be insufficient or incomplete.
The Leniency Notice 2013 sets out the specific information and documents to be included in the leniency application. At the applicant’s request, oral leniency applications may be accepted. In the event of acceptance, a meeting will be arranged at the premises of the CNMC, during which the oral statement is recorded and transcribed, and the date and time of registration of the transcript determines the order of receipt of the leniency application. Although the Spanish leniency programme does not provide for a marker system, if the applicant has made a reasoned request, the CNMC may grant additional time for submitting evidence about the cartel (see below).
The fact of the submission of a leniency application, as well as all the information and documents summited along with it, are kept confidential until the statement of facts is issued. Interested parties will then have access to the leniency information that is deemed necessary to submit observations in response to the statement of facts. Claimants in actions for damages resulting from the cartel may not request that competition authorities disclose information submitted within the scope of the leniency programme. In particular, Article 283 bis(i) of the Civil Procedure Act 2000 [7 January 2000] provides for complete protection of the leniency statements and settlement submissions, which may not be disclosed under any circumstances. National courts may order the disclosure of other evidence available in the file only after proceedings are brought to a close by the competition authority.
Once the application is filed and all evidence has been provided, the Director for Competition of the CNMC will decide whether to grant conditional immunity or a reduction of the fine to the applicant before the inspection is carried out, if the application contributes to its conduct, or before the statement of objections is served, if the application aims at enabling the finding of an infringement. If the conditions for the granting of leniency benefits are maintained during the course of the procedure, the Directorate for Competition would propose their recognition in the final decision to the Board of the CNMC. However, the Board might reject the application even when conditional immunity or a reduction of the fine has been granted by the Directorate for Competition, by giving the applicant the opportunity to submit written observations.
What level of leniency, if any, is available to subsequent applicants and what are the eligibility conditions?
Only the first undertaking to provide the CNMC with sufficient information to establish the existence of a cartel or to enable an inspection is eligible for full immunity. Moreover, applicants which have coerced other undertakings into joining the cartel, i.e. ringleaders, are not eligible for full immunity from fines either, but only for reductions of fines. Nonetheless, applicants which have just implemented the cartel scheme, for instance, by inviting other undertakings to join, coordinating the functioning or even assuming the leadership, can still qualify for full immunity.
The second applicant, or the first applicant if the inspection has already been conducted or it is considered to be a ringleader, may still benefit from a reduction of between 30% and 50% of the fine, provided that their application adds significant value. Evidence is deemed to add significant value where it makes a conclusive contribution to the investigation as compared to the information already in the competition authority’s possession, and makes it significantly easier to prove the existence and scope of the cartel or extends the duration or scope of the investigated conduct.
The extent of the reduction available for further applicants depends on the order of receipt of the applications. However, if an applicant does not contribute significant added value, its position remains open for subsequent submissions. In particular, the third applicant may benefit from a reduction ranging from 20% to 30% of the fine, while all subsequent applicants may obtain a reduction of up to 20%. The Spanish leniency programme does not provide for additional benefits for leniency applicants.
Are markers available and, if so, in what circumstances?
The Spanish leniency programme does not provide for a stricto sensu marker system, but undertakings may submit an application and request additional time to provide evidence or statements in support thereof. In this case, the CNMC will issue a receipt certifying the date and time of submission, so that once the additional information has been provided, the date of the initial submission will be deemed the date it has been received. If the evidence is not submitted within the deadline granted by the CNMC, the date of the application will be deemed the date on which all the evidence is submitted. The order of receipt of the applications is set according to the date and time of submission both for the purposes of immunity and reductions of the amount of the fine.
What is required of immunity/leniency applicants in terms of ongoing cooperation with the relevant authorities?
According to Articles 65 and 66 of the Competition Act 2007 and Article 52 of the Competition Regulations 2007, leniency applicants must cooperate fully, continuously and diligently with the CNMC until the conclusion of proceedings in order to maintain the conditional immunity or reduction. The duty to cooperate, which is the main condition for leniency benefits to be granted entails the following obligations:
(i) providing the CNMC, without delay, with all relevant information and evidence relating to the presumed cartel that is either in the applicant’s possession or available to them;
(ii) remaining available to respond, without delay, to all requests for information by the CNMC that could contribute to establishing the underlying facts;
(iii) arranging for interviews with the undertaking’s employees and current directors and, if applicable, former directors;
(iv) refraining from destroying, forging or concealing relevant information or evidence in relation to the presumed cartel; and
(v) abstaining from disclosing the fact of the submission or the content of the application for immunity or reduction prior to the notification of the statement of fact or during the timeline set by the CNMC.
In practice, the CNMC applies a high standard for determining whether undertakings have fully and continuously cooperated. If the Directorate for Competition comes to the conclusion that the applicant has not fulfilled their duty of cooperation, it will propose to the Board of the CNMC that no immunity or reduction in fine is granted in the final decision. The Board may also refuse to grant the leniency benefits proposed by the Directorate for Competition. In fact, the former competition authority has withheld the leniency benefits despite the fact that the information furnished by the applicant provided added value on account of non-compliance with its duty of cooperation under the leniency programme (see decision of the Board in case S/0086/08  Peluquería Profesional –professional hairdressing). On appeal, the National Court of Appeal (Audiencia Nacional) considered that the Board should have previously informed the leniency applicant of its intention to reject the conditional reduction of the amount of the fine in order to allow for the submission of written observations (see appeal 1/2011  Wella).
A particular expression of the duty of cooperation, in cases where the cartel is still underway at the time of submission of the application, is the requirement for the applicant to state its intention to cease participating in the cartel. In such a scenario, the CNMC may authorise the applicant to continue holding indispensable contacts and performing such other actions as are necessary to avoid the other participants becoming aware of the leniency application and, thus, impairing the effectiveness of the investigation.
Does the grant of immunity/leniency extend to immunity from criminal prosecution (if any) for current/former employees and directors?
In accordance with Article 63(2) of the Competition Act 2007, fines up to EUR 60,000 may be imposed on the legal representatives, managers and members of the executive bodies of infringing entities who have played a role in the cartel. The leniency applicant may extend the leniency application to these individuals and the CNMC will extend the immunity or reductions in fine to such individuals provided that they cooperate with the investigation. However, the Spanish leniency programme only covers liability in relation to the administrative fines imposed by the CNMC and does not extend to any criminal prosecution that may result from the infringement.
Is there an ‘amnesty plus’ programme?
There is no ‘immunity plus’ or ‘amnesty plus’ option under the Spanish leniency programme. It does not provide for any additional reduction of the sanction for a cartel infringement to be granted to leniency applicants on the basis that they have disclosed separate cartel infringements.
Does the investigating authority have the ability to enter into a settlement agreement or plea bargain and, if so, what is the process for doing so?
Spanish competition rules do not provide for a stricto sensu settlement procedure equivalent to that set up at EU level, in which a reduction of fines is available to investigated undertakings on the condition that they acknowledge liability for an infringement. Nonetheless, the CNMC has announced its intention to introduce a settlement procedure in line with that of the European Commission, which would provide significant reductions of fines that have been imposed on cooperating undertakings which do not oppose the existence of an infringement (see below).
Article 52 of the Competition Act 2007 also sets up an early termination procedure for infringements (terminación convencional), which may be opened before the proposal for a decision is referred by the Directorate for Competition to the Board. The early termination procedure allows the Board of the CNMC to put an end to sanction proceedings upon the commitment to implement remedies that are deemed sufficient to address the competition concerns raised and to guarantee public interest. However, that procedure is not available for cartel infringements.
Notwithstanding the above, in certain cartel cases, the CNMC has granted reductions of up to 15 per cent of the fine to undertakings that have been investigated. It has done so on the basis that they did not contest the statement of facts or that they cooperated during the investigation, under the mitigating circumstances rule in Article 64(3)(d) of the Competition Act 2007, which is available for cases where the undertakings do not qualify for leniency benefits. That mechanism has been applied to undertakings that admitted their participation in a cartel in their response to the statement of objections (see decisions by the Board of the CNMC in case S/0226/10  Licitaciones de Carreteras - public tenders for roadway maintenance works - and case S/0380/11  Coches de Alquiler - car rental) and even to undertakings that had not complied with its cooperation obligations under the leniency programme (decisions by the Board in cases S/0086/08  Peluquería Profesional - professional hairdressing, and in case S/0244/10  Navieras Baleares - Balearic ship operators).
What are the key pros and cons for a party that is considering entering into settlement?
What is the nature and extent of any cooperation with other investigating authorities, including from other jurisdictions?
The CNMC liaises with the European Commission and the other EU national competition authorities in the context of the European Competition Network (ECN). The ECN is a forum for discussion and cooperation among national competition authorities of Member States of the EU in cases involving the application of Articles 101 and 102 TFEU, which aims to ensure the efficient allocation of tasks and the effective and consistent enforcement of EU competition rules. In particular, the ECN competition authorities cooperate by means of: (i) mutual communication exchanges in relation to new cases and upcoming decisions; (ii) coordination of investigations where necessary; (iii) mutual assistance in investigations; (iv) exchanges of evidence and information; and (v) discussions of issues of common interest.
As for the weight attached to leniency applications filed in other jurisdictions, the ECN Model Leniency Programme 2012 sets out the treatment that national competition authorities should apply to leniency submissions in all Member States of the EU, including Spain. It also provides for a uniform template of short-form application that can be used by leniency applicants in cases of multiple leniency submissions in different Member States to ensure the marker if a leniency application is filed with the European Commission. Furthermore, as there is no settlement regime in Spain, there is no recognition of foreign settlement submissions, apart from the confidential treatment in actions for damages.
International cooperation with authorities in third-country jurisdictions is usually carried out on the EU level by means of agreements entered into by the European Commission. Nonetheless, the CNMC has recently entered into memoranda of understanding with the Ministry of Commerce of the People’s Republic of China on 6 November 2017, the Commission for the Defence and Promotion of Competition of Honduras on 3 May 2016 and the Competition Board of Morocco on 29 January 2019. Additionally, given that Spanish competition rules only provide for criminal sanctions in certain particular cases (see below) extradition requests from foreign jurisdictions are unlikely to be accepted by Spanish courts. Finally, no inter-jurisdictional discovery mechanisms are in place to the extent that such a system is not provided for under the new rules on claims for damages for competition infringements (see below).
The legislative framework for the exercise of powers of national and regional governments in relation to competition infringements is contained in an Act of 2002 on the Coordination between the State and the Regions in Competition Matters (see above). On this basis, cooperation between the CNMC and the various regional competition authorities is ensured with the purpose of guaranteeing effective enforcement through the ability to better focus of their actions, as well as avoidance of duplicity and divergent positions. National and regional powers to conduct enforcement proceedings are exclusive and determined on the basis of the scope and nature of the conduct (see above). Therefore, in the event of a discrepancy on the competence in relation to a particular case, any of the authorities involved in the conflict may request that an advisory committee be convened to issue a non-binding report within 15 days. A preliminary ruling on competence may also be requested from the Constitutional Court.
What are the potential civil and criminal sanctions if cartel activity is established?
Article 62 of the Competition Act 2007 distinguishes between ‘minor’, ‘serious’, and ‘very serious’ infringements for administrative sanctions. Cartels qualify as very serious infringements under Article 62(4)(a) of the Competition Act 2007, which refers to agreements between competitors. They are sanctioned with fines of up to 10% of the infringer’s ‘total turnover’ in the year prior to the decision, in accordance with Article 63(1)(c) of the Competition Act 2007. In turn, Article 63(3) of the Competition Act 2007 establishes that, where it is not possible to calculate the turnover of the undertakings, a fine of over EUR 10 million may be imposed for very serious infringements, such as cartels.
The legal criteria in Article 64 of the Competition Act 2007 for the calculation of the specific fine within that range are fairly general: (i) size and features of the affected market; (ii) market share of the infringer; (iii) scope of the infringement; (iv) duration of the infringement; (v) effects upon consumers and other economic agents; (vi) the illicit gain obtained by the infringer; and (vi) aggravating circumstances (recidivism, instigation, monitoring, and lack of cooperation with the authority are examples) and mitigating circumstances (such as cessation of the infringement, non-implementation, reparation of damage and cooperation with the authority where the leniency programme is not applicable).
Turning to administrative sanctions on natural persons, the CNMC has the power to impose fines of up to EUR 60,000 on legal representatives and managers of infringing undertakings who have taken part in the infringement, on the grounds of Article 63(2) of the Competition Act 2007. The names of the sanctioned natural persons are published in the final decision. Traditionally, fines have seldom been imposed on natural persons, but this trend has recently reversed and is expected to continue evolving in that direction in the future (see below). Nonetheless, concerns raised by practitioners and scholars over, for instance, proportionality of fines, or objective and subjective limits have to be addressed.
A third administrative consequence that may derive from competition infringements is the ineligibility of natural or legal persons to submit a bid for public contracts for up to 3 years where a serious (or very serious) infringement of, inter alia, competition rules is declared by final decision, on the basis of Article 71(1)(b) of the Public Procurement Act 2017 [8 November 2017]. According to Article 72(5) of the Public Procurement Act 2017, leniency beneficiaries are excluded from this ineligibility sanction. Recently, this provision was applied for the first time (case S/0598/16  Electrificación y Electromecánicas Ferroviarias rail electrification). Although the Board of the CNMC has decided that the scope and duration of the prohibition should be decided by a different entity responsible for public procurement, it has expressly excluded leniency applicants (both the immunity recipient and the beneficiary of the reduction).
As far as criminal law is concerned, Articles 262, 281 and 284 of the Criminal Code 1995 [25 November 1995] proscribe, respectively: (i) bid-rigging in public tendering, which may entail a prison term from 1 to 3 years, a fine, and prohibition on participation in public tenders from 3 to 5 years; (ii) removing necessity-goods from the market in order to cause shortages, distort prices or seriously harm consumers, which may entail a prison term from 1 to 5 years and a fine; and (iii) distorting prices resulting from free competition by means of violence, threat or deceit, which may entail prison from 6 months to 6 years, a fine, and prohibition from participating in the financial market as an agent. However, the CNMC is not entitled to impose criminal penalties, and these provisions have rarely been applied by criminal courts.
Finally, the civil consequences of competition infringements include the nullity of the illegal conduct or agreement, in accordance with Article 1(2) of the Competition Act 2007 and Article 101(2) TFEU, as well as the possibility for parties that suffered harm as a consequence thereof to obtain redress by bringing an action for damages according to Articles 71 to 81 of the Competition Act 2007 (see below).
What factors are taken into account when the fine is set? In practice, what is the maximum level of fines that has been imposed in the case of recent domestic and international cartels?
Given the breadth of the legal criteria, the former competition authority issued guidelines on the methodology for calculating fines along the lines of that adopted by the European Commission. However, the Spanish Supreme Court annulled them by judgment dated 29 January 2015 (see appeal 2872/2013  Transitarios 2). In that judgment it was clarified that the notion of ‘total turnover’ includes all sales made by the infringer in Spain in the year prior to the decision, thus including sales in markets and sectors unaffected by the infringement. The Supreme Court also interpreted that the relevant percentage (10% for very serious infringements such as cartels) is the maximum scale applicable in order to impose a fine, but that each actual fine must be individually calculated. Additionally, it must be noted that, in the CNMC’s practice, ‘infringer’ means the legal entity subject to the infringement proceedings and its consolidated subsidiaries and controlled entities, but not its parent companies.
The current situation is thus characterised by legal uncertainty as to the methodology actually used to calculate fines because the CNMC is developing a new fining practice on a case-by-case basis, which has not yielded any clear principles yet, despite the attempt at systematisation in the Provisional CNMC Fining Guidelines 2018 [10 October 2018]. At any rate, it may be inferred from precedents that the following three successive steps are taken by the CNMC to calculate fines.
Firstly, the overall seriousness of the conduct is considered. This first step consists of determining the basic percentage of the fine within the legal range ( 10% for cartels), which constitutes approximately 60% of the overall percentage, on account of: (a) the features of the affected market in terms of transparency and concentration; (b) the market share of the infringers; (c) the duration and scope of the infringement (namely portion of the national market affected by the conduct); (d) the effects on the legal interests of consumers or other economic operators (for example, the fact that the affected products are medicines, especially where financed through the public budget, or an indispensable input for other economic sectors); (e) the illicit gain obtained; or (f) the adoption of monitoring and implementing measures.
Secondly, the seriousness of the individual participation of each company is assessed. This second step aims at increasing (not decreasing) the basic percentage within the legal range (10% for cartels). Approximately 40% of the overall percentage is accounted for by individual participation. The main criterion, up to approximately two thirds of the percentage to be added under this second step, is the participation share of the individual infringer (that is, as a coefficient of the combined turnover achieved in the relevant product and geographic market by all the infringers participating in the conduct for the duration of their participation). Other parameters factored in at this stage are the legal ‘aggravating’ and ‘mitigating’ circumstances (see above).
Thirdly, a proportionality check is applied. Once the overall percentage is obtained as a result of the first and second steps and applied to the previous year’s turnover, the illicit gain obtained by the infringer as a result of the infringement is calculated and used as a cap to the fine. The CNMC has thus far not explained the exact methodology to estimate the illicit gain, but has vaguely referred to applying a certain percentage to the turnover achieved in the relevant product and geographic market by the individual infringer over the duration of its participation. This percentage might result from various economic parameters (for example, the contribution margin of the undertakings on competitive conditions, price increase due to the infringement and price-elasticity of demand in the relevant market), based on data provided by the infringers or public databases such as the Bank of Spain’s sectoral ratios for non-financial companies, or, where that does not exist, on forecasts from the economic literature. Then, the illicit gain is multiplied by a factor that ranges from 1 to 4 depending on the duration of the infringement and the size of the infringer to ensure deterrence.
Although the percentage resulting from this exercise has traditionally been applied on the Spanish turnover of the infringing entity, there is no certainty on whether the implementation of the Directive (EU) 2019/1 of the European Parliament and of the Council of 11 December 2018 to empower the competition authorities of Member States to be more effective enforcers and to ensure the proper functioning on the internal market (“ECN+ Directive”) would imply that the CNMC will calculate fines on the basis of the worldwide turnover.
This methodology, which is yet to be tested by the Spanish Supreme Court, has been subject to criticism for, inter alia, lack of proportionality, discrimination among infringers and, above all, lack of clarity. In practice, the four decisions of the CNMC adopted during 2018 on cartel cases imposed sanctions of between 0.6% and 8% (before the proportionality check, which is conducted on the amount of the fine once the overall percentage is applied) of the infringers’ turnover achieved during the previous year to the decision.
Additionally, the Competition Act 2007 does not provide for specific reductions of fines on account of implementation of compliance programmes by infringers. Nonetheless, the CNMC seemed to have recently opened the door to considering the effective implementation of compliance programmes for the purposes of modulating fines (see decision of the Board in case S/DC/0544/14  Mudanzas Internacionales - international movers). The basis seems to be an analogy with criminal rules on legal persons’ liability, which allow for account to be taken of the setting up of this sort of measure before the hearing as an mitigating circumstance. In casu, the existence of a robust compliance programme before the infringement was not proven but its application at a later point appeared to have been valued positively by the CNMC for the purposes of calculating a fine.
Finally, regarding infringements by association, Article 63(1) of the Competition Act 2007 allows the CNMC to take into account the turnover of their members for the purposes of calculation of the fine. This has been interpreted by the CNMC as permitting the imposition of fines of up to 10% of the turnover of the members of the infringing association earned during the year prior to the decision. In practice, the CNMC has tended to impose lump-sum fines on associations in cases where the members were also sanctioned in order for the burden of the fine on them not to be disproportionate (see, for instance, decision by the Board of the CNMC in case S/DC/0596/16  Estibadores de Vigo - stevedores in Vigo).
Are parent companies presumed to be jointly and severally liable with an infringing subsidiary?
Article 61(2) of the Competition Act 2007 sets out that an undertaking’s conduct is equally imputable to any persons controlling it, unless its economic behaviour is not determined by the latter. Article 71(2)(b) of the Competition Act 2007 extends this provision to actions for damages (see below).
On these grounds, the parental liability doctrine under Spanish competition law mirrors that in CJEU case law, i.e. the concept of an undertaking as an economic unit under competition rules allows for the dissociation of liability for the conduct from commission thereof and, thus, for the rebuttable presumption that controlling entities are jointly and severally liable for infringements committed by their subsidiaries (see judgment by the Administrative Chamber of the Supreme Court in appeal 7/2015  Repsol, S.A., which refers to the CJEU’s judgment of 19 September 2009,C-97/08, Akzo Nobel NV and Others v Commission). Therefore, unless the parent company is considered to be the infringer (and not just liable for its subsidiary’s conduct) its turnover will not be taken into account for the calculation of the fines.
Are private actions and/or class actions available for infringement of the cartel rules?
Private claims for damages resulting from competition infringements have always been available in Spain on the grounds of general civil rules and the effectiveness of Articles 101 and 102 TFEU. However, in practice, few actions were brought until the implementation of Directive 2014/104/EU of the European Parliament and of the Council of 26 November 2014 on certain rules governing actions for damages under national law for infringements of the competition law provisions of the Member States and of the European Union (the “Damages Directive”). Its implementation was effected by means of Royal Legislative Decree 9/2017 [26 May 2017], which amended the Competition Act 2007 and the Civil Procedure Act 2000 in order to include the provisions described in the following paragraphs.
Firstly, the limitation period during which actions may be brought is set at five years under Article 74 of Competition Act 2007, in line with Article 10 of the Damages Directive. It is triggered when, the infringement having ceased, the claimant knows, or may reasonably be expected to know: (i) of the conduct and the fact that it constitutes a competition infringement; (ii) of the harm caused to them as a consequence thereof; and (iii) of the identity of the infringer. The limitation period is suspended when a competition authority initiates proceedings until at least one year after the decision on an alleged infringement is made final.
Secondly, as required by Article 9 of the Damages Directive, Article 75 of the Competition Act 2007 provides that final decisions by Spanish competition authorities and courts constitute irrefutable presumptions in actions for damages. In contrast, final decisions by competition authorities and courts from other Member States of the EU only provide rebuttable proof of the existence of an infringement.
Thirdly, Article 73 of the Competition Act 2007, implementing Article 11 of the Damages Directive, sets out the principle of joint and several liability of co-infringers except for both small and medium-sized enterprises which are not ringleaders or recidivists, and leniency applicants which have been granted immunity. Additionally, Article 71 of the Competition Act 2007 extends to actions for damages the liability of the parent company for the conduct of subsidiaries, unless the lack of influence in their economic behaviour is proven.
Fourthly, in accordance with Article 76(3) of the Competition Act 2007, harm is presumed to have been sustained in cartel cases, as an exception to the rule that claimants must prove: (i) the existence of an infringement, (ii) that harm was suffered, (iii) the causal link between infringement and harm and (iv) the cost of the harm.
Fifthly, Article 79 of the Competition Act 2007, implementing Article 14 of the Damages Directive reverses, when it comes to indirect purchasers, the general principle under Spanish civil law that the burden of proving harm lies with the party invoking it. Therefore, indirect purchasers who purchased goods or services from the infringer’s customers only bear the onus of proving: (i) the infringement, (ii) the causal link to harm and (iii) the cost of that harm, without having to demonstrate that an overcharge was passed onto them through direct purchasers.
Conversely, it is for defendants to prove that their direct purchasers actually passed the overcharge resulting from the infringement onto their own customers where putting forward such defence, in accordance with Article 78(3) of the Competition Act, which implements Article 13 of the Damages Directive. It must be noted that the Spanish Supreme Court has accepted that kind of passing-on defence in the past (see, for instance, judgments of the Civil Chamber of the Supreme Court in appeal 2472/2011  Nestlé España/Ebro Foods and in appeal 1743/2012  Endesa/Enérgya-VM).
Sixthly, Article 283 bis has been included in the Civil Procedure Act 2000 in order to open up access for claimants to documents in the possession of other parties that may be relevant to subsequently commence a legal action. Access to documents is subject to the claimant providing reasonable evidence in support of their action for damages, identifying specific items or categories of documents and justifying the relevance thereof for the claim. The claimant is also required to provide security to guarantee that the expenses incurred by the defendant in producing the documents and any potential harm suffered for misuse thereof are covered. Moreover, leniency statements and settlement submissions are protected (see above) and confidentiality rules are laid down to safeguard business secrets.
Other amendments operated by means of Royal Legislative Decree 9/2017 include the possibility of declaring the effective compensation of the damages caused before the adoption of a decision by the CNMC as an attenuating factor for the purposes of calculating the fine.
As for the possibility of bringing collective actions, the Civil Procedure Act 2000 provides several avenues. Firstly, actions by a number of claimants may be joined provided that they are linked by means of the same grounds or cause of action, in accordance with Articles 12 and 72 of the Civil Procedure Act 2000. The joining of cases is presumed to occur where the actions are based on the same underlying facts. Secondly, although stricto sensu class actions are not permitted under Spanish law, Article 11 of the Civil Procedure Act 2000 includes certain rules, in cases concerning the defence of consumers and users, that provide consumer associations with legal standing to protect not only the interests of their associates but also the general rights of all consumers and users. Article 15 of the Civil Procedure Act 2000 requires publication of the admission of the claim in media.
Collective actions for the defence of the interest of consumers and end-users provide for an opt-in system in which consumers and users whose interests may be affected must be informed by the claimant in order for them to be able to appear in proceedings where a particular group is identifiable as affected by specific harm. Where such identification is not possible, only consumer associations have standing to represent the interests of consumers and users. In this scenario, publication is considered sufficient for all the interested consumers and users to be able to identify themselves as such, and a deadline of two months is granted by Article 15(3) of the Civil Procedure Act 2007 for them to appear before the court. They may not join the action later on, although the judgment gives rise to effects on all affected consumers and users, and not only on those who have appeared in the proceedings.
What type of damages can be recovered by claimants and how are they quantified?
In compliance with Article 3 of the Damages Directive, Article 72 of the Competition Act 2007 provides for full compensation, that places the person who has suffered harm in the position in which they would have been in the absence of a competition infringement. Therefore, the right to compensation covers actual loss (damnun emegerns), loss of profit (lucrum cessans) and interest accrued on such amount.
On what grounds can a decision of the relevant authority be appealed?
Decisions by the Board of the CNMC may be appealed before the Administrative Chamber of the National Court of Appeal, in accordance with Additional Provision 4 of the Administrative Judicial Procedure Act 1998 [13 July 1998]. Together with the appeal, the parties may request the suspension of the execution of the decision as interim relief if periculum in mora and fumus boni iuris are sufficiently demonstrated and payment of the fine is guaranteed, on the basis of Articles 129 of the Administrative Judicial Procedure Act 1998.
Specifically for cartels, once the investigation is concluded and the CNMC has adopted a final decision, leniency beneficiaries are no longer bound by the cooperation duty and are, therefore, free to appeal the decision before the National Court of Appeal.
Decisions by regional competition authorities may be appealed before the corresponding Regional High Court. Against judgments by both the National Court of Appeal and the Regional High Courts and a cassation appeal, namely an appeal limited to points of law, may be brought before the Administrative Chamber of the Supreme Court.
Certain appeals against fines imposed by the competition authority have been successful in recent years because the National Court of Appeal has systematically annulled those decisions, calculating them on the basis of the former methodology, which was set aside by the judgment of the Supreme Court dated 29 January 2015 (see above). Those cases have been referred to the CNMC to recalculate the fine in accordance with the judgment of the Supreme Court.
Appeals on substantive matters in cartel cases have been much less successful, as the National Court of Appeal usually endorses the CNMC’s analysis, particularly when leniency applications have already been submitted (see below). However, a number of fines imposed by the CNMC have been annulled on the basis of procedural irregularities in the investigation. The more relevant cases referred to the incorrect definition of the scope of the dawn raids (which were annulled), or the notification of the final decision once the maximum deadline had expired (due to an incorrect counting of the suspension).
What is the process for filing an appeal?
The appeal procedure is governed by the provisions in Articles 46 and following of the Administrative Judicial Procedure Act 1998. Firstly, the notice of appeal must be submitted to the National Court of Appeal within two months from notification of the decision by the Board of the CNMC. Then, the clerk of the court would request the referral of the administrative file from the Board of the CNMC, which must be sent within 20 days from receipt of the request by the Board. By this request the CNMC is summoned to appear before the court, and it would notify the decision to remit the file to the interested parties so that they may appear as defendants within nine days. Once the file has been received, the National Court of Appeal decides on the admissibility of the appeal and, if considered admissible, the appellant would be requested to file the appeal brief within 20 days.
Once the brief has been filed, the clerk of the court communicates it to the interested parties so that they may present their opposition within 20 days. Subsequently, the holding of an oral hearing or the submission of written conclusions may be decided by the National Court of Appeal at the request of the parties or, exceptionally, on its own motion. The parties may also request the taking of evidence. In practice, given the complexity of competition law cases, the taking of evidence is often requested and admitted, particularly in the form of expert’s reports. Hearings are usually held for the ratification of the expert’s reports and written conclusions are common practice.
On average, the National Court of Appeal may adopt its judgments on competition law matters in most cases of cartel infringements in two or three years, although it may take longer to rule on complex cartel cases in which there are a number of parties. In these cases, the National Court of Appeal may not deliver a judgment until it has made a decision in relation to all the parties in order to ensure consistency across its rulings. If the decision is confirmed by the National Court of Appeal, a cassation appeal against the judgment of the National Court of Appeal may be filed with the Administrative Chamber of the Supreme Court. The CNMC, represented by the State Attorney, may also challenge the judgment if the decision is set aside.
Concerning the procedure before the Supreme Court, according to Articles 86 and following of the Administrative Judicial Procedure Act 1998, the notice of appeal must be submitted within 30 days following notification of the judgment of the National Court of Appeal, although the parties may request provisional execution of it by providing a guarantee for any damage that may occur. If the appeal is admitted, which depends on whether the Admissibility Section of the Administrative Chamber of the Supreme Court considers that it has sufficient interest at the cassation level, the clerk of the court would order the appellant to file the brief within 30 days. Once the brief has been admitted by the Administrative Chamber, a copy of it is notified to the defendants, including the CNMC as represented by the State Attorney, for them to present their opposition in writing within 30 days. Once the defendants have opposed the brief, or the deadline has expired without them filing any opposition, the proceedings are ready for judgment.
The average duration of proceedings before the Administrative Chamber of the Supreme Court is two years, but some complex competition cases have taken as long as three or even four years. No ordinary appeal lies against the ruling of the Supreme Court, which is the last instance of the Spanish judicial system. An extraordinary appeal is available before the Constitutional Court within 30 days from the notification of the judgment of the Supreme Court on the grounds of the violation of a fundamental right of the party by the judiciary during proceedings (typically the right to obtain effective protection from the judges and the courts, as enshrined in Article 24(1) of the Spanish Constitution). However, the likelihood that it would be admitted is extremely low.
What are some recent notable cartel cases (limited to one or two key examples, with a very short summary of the facts, decision and sanctions/level of fine)?
Firstly, the decision of the CNMC in case S/DC/0578/16  Paquetería y Mensajería Empresarial (corporate courier and parcel delivery services) is worth mentioning. The reason is the approach followed by the authority in order to shoehorn a complex network of bilateral agreements into the concept of a cartel following a leniency application. The CNMC noted that the corporate courier and parcel delivery service was characterised by frequent commercial relations between providers because individually they lack the resources to render the entire range of services that they offer. Then, it went on to find that some operators availed of such relations to reach verbal reciprocal non-aggression agreements not to approach any customers of the counterparty, whether covered by the subcontracting agreement with the latter or not. In the CNMC’s view, such absolute protection of customers could not be seen as an ancillary restraint to the lawful main commercial relationship between providers, but an unjustified customer allocation agreement alien to such commercial relationship. As a result, nine separate cartel infringements were declared and an overall sanction of over EUR 70 million was imposed on ten undertakings, full immunity being granted to the leniency applicant, that had only participated in one of the agreements.
Secondly, the decision of the CNMC in case S/DC/0562/15  Cables BT/MT (medium-voltage and low-voltage cables) also stands out for the breadth of its scope. As a result of the leniency application filed by a manufacturer, the CNMC declared three sets of cartel infringements: (i) a price-fixing and market-allocation cartel among seven manufacturers on the wholesale level, where distributors source cables at the prices set in manufacturers’ lists, with the necessary cooperation of the sectoral association; (ii) three cartels for the allocation of projects in relation to key accounts, which constitute direct clients for which both manufacturers and distributors are supposed to compete, each of the three cartels entered into with one distributor and several manufacturers which had also participated in the manufacturers’ cartel; and (iii) a cartel between two distributors consisting of one of them systematically submitting covering bids for the other one to be awarded the projects at stake. Overall, sanctions of over EUR 43 million were imposed on the 11 undertakings involved.
Thirdly, the CNMC has been very active in the prosecution of bid-rigging infringements involving joint bidding unions (Uniones Temporales de Empresas). The CNMC has applied a high standard regarding the necessity of the participation in a consortium and the ability of undertakings to submit individual bids or to participate in other consortia (see decision of the Board in case S/0519/14  Infraestructuras Ferroviarias –rail infrastructure). In case S/0598/16  Electrificación y Electromecánicas Ferroviarias - rail electrification–, also concerning bid-rigging and joint bidding unions, the CNMC imposed sanctions totalling over EUR 118 million and declared that those infringing entities not covered by leniency applications should be ineligible to submit a tender for public contracts.
What are the key recent trends (e.g. in terms of fines, sectors under investigation, applications for leniency, approach to settlement, number of appeals, etc.)?
As far as the conduct of the administrative procedure in general is concerned, aside from the Provisional CNMC Fining Guidelines 2018 (see above), the Directorate for Competition has changed its previous practice and started to include the amount of the fine to be imposed in the proposal for decision for the Board. This means that the parties have the opportunity to submit observations before a final decision is adopted. Furthermore, contrary to a long-drawn tendency, the Board has held several oral hearings in 2018 (see, for instance, in case S/DC/0584/16 Agencias de Medios –media agencies), which had not been occurred since 2010.
Concerning specifically cartel enforcement, the number of cartels identified has risen in recent years, culminating in the tendency that started with the adoption of the Competition Act 2007 and the implementation of the Spanish leniency programme in February 2008. Up until 2007, only ten cartels were detected, whereas 40 cartels were sanctioned between 2007 and 2014. There was a peak in 2015, when 14 decisions were adopted on cartel cases. In 2017, three cartels, and in 2018, four cartels were found. The leniency programme has played an important role in this regard, having been applied in 25 cases since its entry into force in Spain in 2008. As a matter of fact, two out of the four cartel decisions taken in 2018 and two of the three cartel decisions adopted in 2017 were prompted by leniency applications.
Finally, it is noteworthy that the CNMC is now exercising its power to impose sanctions on natural persons in cartel cases. In the last three years, fines have been imposed on a number of legal representatives and directors in the context of six decisions: (i) between EUR 4,000 and EUR 15,000 on four natural persons in the adult incontinence product cartel (see case S/DC/0504/14  AIO); (ii) between EUR 5,000 and EUR 12,000 on nine natural persons in the railway infrastructure cartel (see case S/DC/0519/14  Infraestructuras Ferroviarias); (iii) EUR 16,600 and EUR 36,000 on two legal persons in the market-allocation agreement between two cash-in-transit service companies (see case S/DC/0555/15  Prosegur-Loomis); (iv) EUR 12,000 on one natural person in the Asturias concrete cartel (see case S/DC/0545/15  Hormigones de Asturias); (v) between EUR 32,000 and EUR 40,000 on three natural persons in the media agency cartel (see case S/DC/0584/16  Agencias de Medios); and (vi) between EUR 23,000 and EUR 60,000 on 14 individuals in the rail electrification cartel (case S/0598/16  Electrificación y Electromecánicas Ferroviarias).
What are the key expected developments over the next 12 months (e.g. imminent statutory changes, procedural changes, upcoming decisions, etc.)?
Concerning public enforcement, bid-rigging in public procurement will continue to be in the spotlight. In this respect, the CNMC is setting up an Economic Intelligence Unit composed of data analysts and economists to conduct screening of bids submitted in public tenders in order to open ex officio investigations to detect irregularities. Also with a view to fighting the distortion of public procurement, the CNMC seems to be willing to render undertakings ineligible to submit tenders, an enforcement tool which has not been used so far because of its potentially far-reaching consequences on the economy. Press releases of the inspections conducted in November 2018 in the radiopharmaceutical sector, in December 2018 in relation to contracts for road maintenance, and in February 2019 in relation to contracts for public transportation in Cantabria seem to point in this direction.
Regarding private enforcement trends, actions for damages resulting from competition infringements, which have increased significantly since the entry into force of the amendments operated in the Competition Act 2007 and the Civil Procedure Act 2000 by Royal Legislative Decree 9/2017, are expected to soar dramatically in the coming years, especially in relation to broad cartels sanctioned by the European Commission or the CNMC. Particularly noteworthy is the litigation stirred by the truck cartel found by the European Commission (see decision of the European Commission in case AT.39824  Trucks).
The CNMC has announced that it is considering implementing a settlement procedure equivalent to that of the European Commission, in the context of which undertakings may benefit from significant reductions of the amount of the fine if they confess to their participation in an infringement.
Certain additional measures are also expected to be introduced in Spain as a result of the implementation of the ECN+ Directive regarding cooperation with other authorities. The CNMC may take this opportunity to introduce other amendments to the Competition Act 2007, such as: (i) the ability of the CNMC to set priorities, as an obligation to investigate all complaints currently applies, (ii) the specific regulation of the powers of the CNMC regarding exclusion from being able to submit a tender in public contracts, (iii) clarifications on the extension of the leniency benefits and to infringements other than cartels, and (iv) the centralisation of requests for search warrants regarding dawn raids, which are currently granted by local judges.