Article 1 of the Competition Act 2007 [3 July 2007] as a general rule forbids agreements between undertakings, decisions by associations of undertakings and concerted practices that have either the object or the effect of impeding, restricting or distorting competition in all or part of the Spanish market. This provision mirrors Article 101 of the Treaty on the Functioning of the European Union (TFEU), which must be applied concurrently by Spanish competition authorities where trade between member states is deemed to be potentially affected by the conduct in question. The Competition Regulations 2008 [27 February 2008] supplement the provisions of the Competition Act 2007 in relation to areas such as the infringement procedure, including the leniency regime.
Both Article 1 of the Competition Act 2007 and Article 101 of the TFEU provide for the nullity of any agreements, decisions, or concerted practices that run counter to the general prohibition contained therein and set out an exception that applies where the conduct is deemed to improve the production or distribution of goods, or to promote technical or economic progress, subject to stringent requirements, including benefit for consumers, indispensability of restriction and not elimination of competition. Additionally, Article 4 of the Competition Act 2007 exempts infringements of Article 1 that stem from the application of statutes having the force of law.
In Spain, the main responsibility for public enforcement of competition rules is shared between the National Markets and Competition Commission (CNMC), instituted by the National Markets and Competition Commission Act 2013 [4 June 2013], and the regional competition authorities that have been set up by certain regional governments to apply the Competition Act 2007 in their territories. Some of the regional authorities that have been established only have investigative powers, and the competence to adopt a decision in relation to their enquiries is retained by the decision-making body of the CNMC (the Board). The Co-ordination between State and Regions in Competition Matters Act 2002 [21 February 2002] governs relations between the national and regional competition authorities. The basic allocation criterion is that regional authorities, where they have been set up, are competent if the scope of the investigated conduct does not exceed the territory in which they have jurisdiction and does not otherwise affect market unity, economic balance among regions or constitutional rights. The CNMC also has supervisory powers concerning regulated sectors.
Cartel infringements may result in administrative liability, as well as sanctions under civil and criminal law. These are addressed in 4.4 Sanctions and Penalties Available in Criminal Proceedings and 4.5 Sanctions and Penalties Available in Civil Proceedings.
Administrative sanctions for cartels include fines of up to 10% of the infringer’s total turnover in the year prior to the decision (or a fine of over EUR10 million where it is not possible to calculate the infringer’s turnover), according to Articles 62 and 63 of the Competition Act 2007, given that agreements between competitors amount to very serious infringements. The exact amount within the 10% range is calculated on the basis of the fairly general legal criteria in Article 64 of the Competition Act 2007:
However, application of sanctions has in practice been affected by a fair degree of uncertainty since the CNMC’s Fining Guidelines were annulled by the Supreme Court in January 2015 (see appeal 2872/2013 ). In this ruling, the court interpreted that 10% is the maximum percentage to be imposed for a very serious infringement. That percentage is to be applied to the total turnover composed of all sales made by the infringer (ie, the legal entity subject to the infringement proceedings and its consolidated subsidiaries and controlled entities, but not its parent companies) in Spain in the year before the decision was taken (including in markets and sectors unaffected by the infringement). However, there is no certainty on whether the implementation of 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 lead the CNMC to take into account the infringer’s worldwide turnover.
The CNMC is developing a new practice of imposing fines, which has not yet translated into a clear-cut methodology, with the exception of the high-level guidance provided in the Provisional Fining Indications 2018 [10 October 2018]. Under that guidance, administrative fines are to be calculated in three steps:
Administrative sanctions may also be imposed on natural persons in the form of fines totalling up to EUR60,000 on legal representatives and managers of infringing companies who are deemed to have taken an active part in the infringement, and who have a certain degree of autonomy, in accordance with Article 63 of the Competition Act 2007. The CNMC has recently shown a growing tendency towards imposing fines on natural persons despite its traditional reluctance to use this device and includes the names of individuals who have been fined in the public versions of the decisions.
Administrative consequences may also include the ineligibility of natural or legal persons participating in the infringement to tender for public contracts for up to three years if a serious (or very serious) infringement of, among others, competition rules is declared by final decision, under Article 71 of the Public Procurement Act 2017 [8 November 2017]. Article 72 of the Public Procurement Act 2017 exempts leniency beneficiaries from this sanction. Ineligibility for public contracts was imposed for the first time in the recent case S/0598/16 Electrificación y Electromecánicas Ferroviarias , in which the Board of the CNMC referred to public procurement enforcement bodies to decide on the scope and duration of the prohibition, but declared both the immunity recipient and the beneficiary of the reduction exempt.
Civil actions may be brought to claim redress for damage caused, or the declaration of nullity of an agreement or conduct concluded in breach of competition rules (see 5.1 Private Right of Action). Recently, 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 EU (Damages Directive), by means of Royal Legislative Decree 9/2017 [26 May 2017], entailed the amendment of the Competition Act 2007 and the Civil Procedure Act 2000 [7 January 2000] in order to establish a specific regime for actions for damages resulting from competition infringements.
Regarding standing to bring an action, any person with a relevant legal interest may request the nullity of an agreement or conduct contrary to Article 1(1) of the Competition Act 2007 or Article 101(1) of the TFEU – and not only the parties to the agreement or conduct. This is in line with the case law of the Court of Justice of the European Union (CJEU) (see case C-453/99 Courage and Crehan , point 24). The same applies to actions for damages, which under Spanish law may be initiated by any individual who has suffered harm as a consequence of the breach of competition rules as well as, under certain conditions, by associations representing the collective interests of consumers.
As for limitation periods, actions for a declaration of nullity of a contract in breach of competition rules may be brought within four years under Article 1301 of the Civil Code 1889. In the case of claims for damages, Article 74 of Competition Act 2007 establishes an exception to the general one-year limitation period under Article 1968 of the Civil Code 1889 and brings it to the five years imposed by the Damages Directive (see 1.5 Limitation Periods).
Cartel infringements are caught by the general prohibition under Article 1 of the Competition Act 2007 as agreements or concerted practices between companies having the object of impeding, restricting or distorting competition. Nevertheless, the concept of cartel, which is more restrictive, is provided for in statute by Additional Provision 4 of the Competition Act 2007 for the purposes of the leniency programme, which is only available for this type of breach.
The definition of cartel under Additional Provision 4 of the Competition Act 2007 refers to any agreement or concerted practice between two or more competitors with the aim of co-ordinating their conduct in the market or influencing competition by means of practices such as fixing or co-ordinating prices; allocating quantities; sharing markets or customers, including bid-rigging; restricting imports or exports; or taking actions against other competitors. This provision was amended in the context of the implementation of the Damages Directive and brought in line with the Commission Notice on immunity from fines and reduction of fines in cartel cases of 2006, by, for instance, removing the requirement that the agreement be kept secret. In this regard, concerted practices may include pure exchanges of information on the future price and quantities, and thus be considered as covered by the definition of cartel.
Any person engaged in economic activity in any sector may be held liable for their participation in a cartel infringement. This includes public bodies provided that their intervention does not take place through a formal administrative decision or a measure of general application (which is subject to a specific remedy) and the specific conduct is not expressly authorised by a statute having the force of law, in accordance with Article 4 of the Competition Act 2007. In practice, a regional government was found to be responsible for facilitating a price-fixing cartel by organising and monitoring the implementation of an agreement among sherry wine producers (see judgment of the Supreme Court in appeal 2946/2013 ).
Article 68 of the Competition Act 2007 sets a limitation period of four years for Spanish competition authorities to enforce very serious infringements, such as cartels. This limitation period is counted from the date on which the infringement is committed or, in the case of continuous infringements (as cartels usually are), from the date on which they cease. It is interrupted by any enforcement action taken either by the authorities with the formal knowledge of the parties concerned or by the parties concerned in order to comply with the decisions in question.
Concerning private enforcement, Article 74 of the Competition Act 2007 sets a specific five-year limitation period for actions for damages resulting from competition infringements, along the lines of the Damages Directive. The limitation period is counted from the point when, the infringement having ceased, the claimant knows, or may reasonably be expected to know, of the following circumstances:
It is interrupted when a competition authority initiates proceedings, until at least one year after the decision on an alleged infringement is made final or, only in relation to the settling parties, when there has been an attempt at settlement.
Article 1 of the Competition Act 2007 is expressly applicable to agreements, decisions and concerted practices that restrict competition “in all or part of the Spanish market.” Therefore, Spanish legislation adheres to the principle of the place of implementation as ruled by the CJEU in the context of EU competition rules (see, for instance, 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, points 16 to 18) and the broader principle of territoriality under international public law. Consequently, the jurisdiction of Spanish authorities to pursue competition infringements, including cartels, requires that the conduct produce actual or potential effects in Spain. As mentioned in 1.1 Statutory Bases for Challenging Cartel Behaviour/Effects, Article 101 of the TFEU is concurrently applicable if it is considered that trade between member states is potentially affected.
Co-operation between the CNMC and enforcement agencies from other member states of the EU and the European Commission takes place within the framework of the European Competition Network (ECN), which, among other functions, ensures co-ordination of investigations where necessary and mutual assistance in investigations (see 3.4 Inter-Agency Co-operation/Co-ordination). Concerning jurisdictions outside the EU, competition enforcement is usually co-ordinated at the EU level (see, for instance, the Decision of the Council and of the Commission of 29 May 1998 concerning the conclusion of the Agreement between the European Communities and the Government of the United States of America on the application of positive comity principles in the enforcement of their competition laws or the Decision of the Council and of the Commission of 29 April 1999 concerning the Agreement between the European Communities and the Government of Canada regarding the application of their competition laws).
Formal inquiries are initiated by the investigative body of the CNMC (the Directorate for Competition) or the equivalent regional body in cases affecting its jurisdiction (if a regional competition authority has been established). The Directorate for Competition may act on its own motion, on the motion of the Board or following a report filed by any person. In cartel cases, proceedings may result from a leniency application as well. An online whistle-blower letterbox has recently been set up by the CNMC for any person to provide information on competition infringements.
Informal preliminary proceedings are carried out prior to the formal opening of the investigation for an indeterminate period. They include the sending of requests for information or the carrying out of dawn raids at the premises of the investigated undertakings or the domiciles of their employees. Full procedural guarantees are not granted during preliminary proceedings but confidential treatment of any sensitive information that has been seized may be requested before it is included in the file.
Formal procedures are opened where the Directorate for Competition considers that there are sufficient indications that an infringement has occurred. The Board may decide not to open the formal procedure on the proposal of the Directorate for Competition if it finds that such indications do not exist. The Board may also reject the proposal by the Directorate for Competition and require it to initiate formal proceedings. The opening of the formal procedure involves full recognition of procedural guarantees – including access to the file and requests for confidentiality of information gathered – and triggers the 18-month deadline for the Board to adopt and notify a decision under pain of expiry.
Dawn raids by the CNMC and the regional authorities in their jurisdictions are common practice, especially in cartel cases. To that end, Article 27 of the National Markets and Competition Commission Act 2013 allows the Director for Competition to order surprise inspections at the premises of companies suspected of infringements of the Competition Act 2007. Companies faced with an inspection, and their employees, are under a duty to co-operate. Obstruction of an inspection will be sanctioned by fines of up to 1% of the company’s total turnover in the previous year, as well as be seen as an aggravating circumstance when determining the fine to be imposed for the conduct. Not providing the requested documents or providing them in a misleading manner, not responding to the questions asked or responding in an incomplete, inaccurate or misleading way, or breaking affixed seals are examples of obstruction.
Although the inspection is mandatory for the addressees of the order, access to the premises and the sealing of any assets on those premises requires the company’s consent or, in its absence, a judicial warrant. The courts in Spain have confirmed that, if the company does not grant consent to access the premises and there is no judicial warrant, opposing entry shall not be considered an obstruction, given the fundamental right of the investigated natural and legal persons to the inviolability of their domicile.
Aside from being limited to the exercise of the broad powers listed in 2.2 Dawn Raids, any action undertaken by the inspectors is restricted to the scope of the investigation as defined in the order issued by the Director for Competition. Such an order must identify precisely the date of the dawn raid, the name of the inspected entities, the intervening officials and the subject matter of the inspection. In practice, the scope of the inspections is limited by the judicial warrant if it is more restrictive than the order. Recently, the Supreme Court has ruled that inspectors may not conceal the fact that the judicial warrant has been rejected (see appeal 2922/2016 ).
As explained above, destroying, concealing or altering documents or information during an inspection, as well as manipulating seals (affixed by inspectors to secure the process of seizing information during the hours that they are not physically in the premises) is considered an obstruction that will be sanctioned with fines of up to 1% of the company’s total turnover in the previous year. It will also be seen as an aggravating circumstance in the determination of the fine imposed for the conduct. The broad powers of the CNMC include access to back-ups and any other storage systems of the investigated entities, which may identify information that has been deleted.
In the context of an investigation, inspectors have the following powers:
Employees and representatives of the investigated entities are obliged to respond to questions asked by the inspectors of the CNMC provided that the questions are within the scope of the dawn raid and do not require self-incriminating answers. All information provided by such individuals shall be reflected in the minutes of the dawn raid that are shared with the company at the end of the inspection.
The assistance of external lawyers is not mandatory but inspectors customarily allow the company to contact their outside counsel and usually give some courtesy time for them to arrive at the premises before the inspection starts. External lawyers usually play an active role in shadowing and liaising with inspectors, as well as ensuring that the company fully co-operates and officials do not exceed the limits of the order. Leeway for external lawyers to advise companies during the course of an inspection is usually large and they are present at all times, even to assist employees during interviews.
See 2.6 Role of Counsel.
Defence counsel can play an active role during dawn raids but also afterwards in relation to the legality of the inspections. In particular, they should analyse whether the dawn raid complied with all procedural requirements so as to verify whether the inspection should be challenged before the courts.
After the inspection, defence counsel should review, together with the company, all information gathered by the CNMC – a copy remains with the company – to identify potential risks and to determine the strategy (eg, whether a leniency application would be an option). Once a formal procedure has been initiated, documents gathered at the premises of other companies and submissions of third parties (such as complaints) should be reviewed.
The main tools used by Spanish competition authorities to obtain information in the context of cartel investigations are leniency applications (see 2.17 Leniency, Immunity and/or Amnesty Regime), dawn raids and requests for information (see 3.1 Obtaining Information Directly from Employees).
Both in the context of the leniency applicant’s duty to co-operate and in the course of inspections, employees of the investigated company may be required to give testimony. Additionally, in cartel cases affecting highly technical sectors, expert reports may be requested by the competition authorities or submitted by the parties during the investigation. In recent years, the CNMC has also been in close contact with other governmental agencies in charge of public procurement in order to obtain any information of signs of bid-rigging. In this regard, the CNMC has created an economic intelligence unit that analyses vast sets of data to identify abnormal behaviour in public tenders.
As mentioned above, Spanish competition authorities have the power to access any books, records or other documents in any format, which are accessible from the premises or by the directors and employees of the investigated entity, and which are related to the subject matter of the inspection. This includes any information stored in remote servers or in the cloud. Although, in the course of an inspection, inspectors tend to be understanding about technical difficulties that may delay or hinder access to remote information, the CNMC considers that any piece of information that is accessible for the investigated entity is within the scope of the investigation.
The legal privilege protecting communications between external counsel and clients in Spain is based on the right to a defence and assistance by a lawyer under Article 24(2) of the Spanish Constitution. However, along the lines of EU case law (see, for instance, case C‑550/07 P Akzo Nobel v Commission ), the CNMC does not consider communications to or from in-house counsel as privileged (see, for instance, case R/AJ/060/17 Altadis 2 ). Moreover, the legal privilege must be invoked by identifying the specific documents (see judgment of the Supreme Court in appeal 6552/2009 STANPA ). In practice, investigated companies should identify specific folders or documents that contain privileged information and may provide the inspectors with a list of lawyers that assist them in competition law matters so they are excluded from the information finally gathered.
Aside from legal privilege, any other information beyond the scope of the investigation or of a personal nature must be ignored by competition authorities. However, if during an inspection a cursory review of personal devices or webmail accounts reveals that they have been used for professional purposes, they may be searched by inspectors. Furthermore, employees of the investigated companies are not required to provide self-incriminating answers to questions by officials.
Not providing the information requested by competition authorities or furnishing incomplete, incorrect, misleading or false information in response to a request, whether in the context of an inspection or not, may be sanctioned as a minor infringement with fines of up to 1% of the company’s total turnover in the previous year. In the context of an inspection, it would constitute an obstruction and thus be seen as an aggravating circumstance in the determination of the fine imposed for the conduct. In practice, companies comply with requests for information served by the CNMC to the extent that information is available.
Before any information gathered from a party to sanctioning proceedings is included in the file, the party concerned is granted the opportunity to request that any sensitive or proprietary information that may cause it harm if it was known by other parties be treated confidentially. The competition authority then adopts a decision on the pieces of information that should be redacted on the basis of the party’s request. If rejected, such decisions may be challenged before the Board of the CNMC.
Once formal proceedings have been initiated, the parties have the right to lodge their submissions and additional information at any time. Based on the information gathered during the dawn raids, it may be sensible to explore the possibility to lodge preliminary submissions in order to clarify any issues in doubt. In some cases, the CNMC even invites the parties to do so.
Notwithstanding the possibility to lodge submissions at any time, the parties will be granted the opportunity to respond to the findings of the CNMC in the statement of objections and the proposed decision. However, given the 18-month deadline, at that time it may be difficult for the CNMC properly to analyse new evidence or arguments submitted by the parties (especially economic reports).
Articles 65 and 66 of the Competition Act 2007 establish the Spanish leniency regime, which is regulated in further detail in Articles 46 to 53 of the Competition Regulations 2008 and the Leniency Notice 2013. Under these provisions, companies that have participated in a cartel (which is the only infringement that qualifies a party to apply) may apply for leniency before the CNMC or the regional authorities. The Spanish leniency programme does not extend beyond immunity from or reduction of administrative fines and does not cover criminal liability. Nevertheless, the leniency application may extend the request for such benefits to potential fines on natural persons involved in the cartel and to the prohibition to participate in public tenders.
The legal conditions to qualify for immunity from fines and a reduction in fines are that there is:
Only the first applicant who has provided sufficient evidence to order an inspection or prove a cartel infringement is eligible for immunity from fines deriving from a finding of such infringement. If the competition authority has already conducted an inspection at the time of the application, in practice, the CNMC will find that full immunity is not available. Furthermore, applicants that have coerced other companies to participate in the cartel are not eligible for full immunity from fines, either, but only for reductions in fines. However, full immunity remains available for applicants that have had an active role in the cartel by, for instance, inviting other undertakings to join, co-ordinating how the cartel functions, or even assuming leadership of it.
The second applicant (or the first applicant that has filed its submission once inspections have already been carried out or that has coerced others into joining the cartel) may still benefit from a reduction of between 30% and 50% of the fine. The condition is that their application adds significant value (ie, it contributes conclusively to the investigation compared to the information that the competition authority has already obtained, facilitates the demonstration of the existence and scope of the cartel to a significant extent, or allows for the extension of the duration or scope of the conduct). Additionally, the third applicant may benefit from a reduction ranging from between 20% and 30% of the fine, while all subsequent applicants may obtain a reduction of up to 20%.
On the date of the first submission, which must be prior to the issuing of the statement of objections, the application must include the information that is relevant to identify the applicant and other participants in the cartel, a description of the conduct and a list of the leniency applications submitted to other competition authorities in relation to the same cartel. Oral leniency applications may be accepted if the applicant so requests. The Leniency Notice 2013 describes the specific documents to be submitted in more detail. It does not establish a marker system, but upon reasoned request the CNMC may grant additional time for submitting evidence about the cartel.
The circumstance of the submission of a leniency application and all information and documents submitted are kept confidential until the statement of objections is issued. At this stage, access to leniency information that is deemed necessary to respond to the statement of objections is granted to the parties concerned. Claimants in private actions may not obtain disclosure of information submitted within the scope of the leniency programme (see 5.4 Admissibility of Evidence Obtained from Governmental Investigations/Proceedings).
It is for the Director for Competition to decide on conditional immunity or reduction before inspections, if the application is aimed at allowing them to be conducted, or before the statement of objections, if the application contributes to proving the infringement. Eventually, the Board must adopt a final decision on immunity and reduction on the proposal of the Director for Competition, allowing the applicant to make observations if it intends to withdraw the conditional benefits granted by the latter.
As a matter of principle, Spanish competition authorities may send requests to any natural or legal person or public body to obtain any information that is deemed necessary for the enforcement of competition rules provided that they are sufficiently reasoned and proportionate to their objective, in accordance with Article 28 of the National Markets and Competition Commission Act 2013 and Article 39 of the Competition Act 2007. A deadline of ten working days, which can be extended for five additional working days, is granted to respond, unless the competition authority sets a different timeline, stating reasons for doing so. In practice, requests for information by competition authorities are addressed to companies that will in turn gather any requested information from employees. However, employees that are parties to proceedings will also receive separate requests for information.
Spanish competition authorities may in principle request information from any entity provided that they state sufficient reasons for doing so and the request is proportionate. In any event, competition authorities may address requests for information that include questions about other companies of the addressee’s group or, if the target is an association, the members thereof.
As explained in 1.6 Extent of Jurisdiction, the jurisdiction of Spanish competition authorities is determined by the actual or potential effects on the conduct. Therefore, when investigating a conduct that may give rise to effects in Spain, Spanish competition authorities are able to request information from companies located abroad. In most cases, the CNMC would directly serve the request for information on the foreign entity (sometimes including a translation of the document) but if the addressee rejects service, the CNMC may use co-operation mechanisms with third countries to ensure the legality of service. However, in case S/DC/0607/17 Tabacos  the CNMC was not able to serve certain documents on a Swiss entity and had to drop the case in relation to that party.
Co-ordination and allocation of responsibilities between national and regional competition authorities is based on the Co-ordination between State and Regions in Competition Matters Act 2002. In this context, the regional authorities have exclusive enforcement powers in relation to infringements that do not have an effect extending beyond the territory over which they have jurisdiction and do not otherwise affect market unity, economic balance among regions, or constitutional rights. Additionally, regional competition authorities inform the CNMC of every report that they receive and every procedure that they decide to open on their own motion, and the latter may oppose. If there is a conflict over a particular case, any of the authorities concerned may request that an advisory committee be convened to issue a non-binding report within 15 days. A preliminary reference on competence may also be submitted to the Constitutional Court.
In addition, the different units of the CNMC also co-operate closely. As the CNMC also has supervisory powers regarding certain sectors (telecommunications, energy, transport, and so on) competition cases affecting companies active in those markets require co-ordination with the supervision bodies. In fact, the Board of the CNMC is split into two different chambers, one for competition and the other one for regulation. Matters affecting both chambers may be decided at plenary sessions.
Within the EU, comity among national competition authorities and the European Commission occurs in the context of co-operation within the ECN, which is a forum for co-ordination of the enforcement of Articles 101 and 102 of the TFEU that aims to ensure efficient allocation of tasks and effective and consistent application of EU competition rules. The means of co-operation include mutual exchange of communications regarding new cases and upcoming decisions, co-ordination of investigations where necessary, mutual assistance in investigations, exchanges of evidence and information, and discussions of issues of common interest.
At the international level, co-operation with non-EU authorities is usually led by the EU institutions. However, the CNMC has recently entered into memoranda of understanding with the Commission for the Defence and Promotion of Competition of Honduras on 3 May 2016, the Ministry of Commerce of the People’s Republic of China on 6 November 2017 and the Competition Board of Morocco on 29 January 2019. In any event, given that criminal sanctions for competition infringements are limited in Spain to particular cases (see 1.2 Public Enforcement Agencies and Scope of Liabilities, Penalties and Awards), extradition requests from foreign jurisdictions are unlikely to be accepted by Spanish courts.
Spanish competition authorities are administrative bodies lacking criminal enforcement powers, but which are entitled to impose administrative sanctions directly, without the intervention of courts. However, there are specific practices that might be caught both by competition rules and criminal law. This is the case for bid-rigging in public tendering; removal of necessity goods from the market in order to cause shortages, distort prices or seriously harm consumers; and distortion of prices resulting from free competition by means of violence, threat or deceit, banned, respectively, under Articles 262, 281 and 284 of the Criminal Code 1995 [25 November 1995].
Competent criminal courts have jurisdiction in relation to the application of those provisions, which is fairly uncommon. In this context, the general rules under the Criminal Procedural Act 1882 [14 September 1882] apply. In general, the procedure is based on the accusatory principle, whereby the investigating judge is not part of the judicial body adopting a ruling. Hence, during the investigative phase, the investigating judge is responsible for taking the necessary steps to gather the relevant facts by means of law enforcement, if necessary. When the case starts with a report being filed with the public prosecutor, such a body is also entitled to take the necessary actions to check the veracity of the report. Then, the trial stage is characterised by an adversary procedure.
Civil actions for damages or declaration of nullity on the grounds of breaches of competition rules may be brought before commercial courts, under Article 86 ter of the Judiciary Organic Act 1985 [1 July 1985]. However, ordinary civil courts are generally competent to hear indirect claims based on competition rules that arise and are under their jurisdiction (eg, competition-based opposition to a claim that does not amount to a genuine counterclaim). Civil claims in relation to competition infringements are governed by general civil procedural rules in the Civil Procedure Act 2000, which, for instance, as a matter of principle do not provide for pre-trial discovery. In fact, pre-trial requests are limited to restricted types of information and to securing the prospective production of evidence. Additionally, the duty to exhibit documents, which allows each party to require that the others exhibit any documents that relate to the matter in dispute, takes place after the initiation of proceedings and is restricted to documents known to the claimant.
Nevertheless, specific rules on access to evidence are applicable to actions for damages arising from breaches of competition law, which were included by Royal Legislative Decree 9/2017 as Article 283 bis, letters (a) to (k), in transposition of the Damages Directive. Such rules aim to facilitate access for plaintiffs to documents in the possession of other parties that may be relevant to bring a legal action subsequently.
Access to documents is conditional on the claimant providing reasonable evidence in support of their claim, identifying specific items or categories of documents and justifying their relevance for the action. The plaintiff is also required to guarantee that the expenses incurred by the defendant in producing the documents and any potential harm suffered for misuse thereof are covered. Additionally, leniency statements and settlement submissions are not to be disclosed and confidentiality rules apply to business secrets.
Under Spanish competition rules, one and the same procedure is usually opened for each potential infringement even where several companies are intended to be caught under a mechanism of grouping infringements into a single and continuous infringement (see 3.9 Burden of Proof). However, the National Court of Appeal is adopting a more rigid stance towards the possibility for the CNMC to resort to single and continuous infringements affecting several markets (see appeal 103/2015 ). In any event, several cartel agreements have been treated separately under the same proceedings by the CNMC where a single and continuous infringement could not be proven in the same market (see, for instance, case S/DC/0578/16 Mensajería y paquetería empresarial ).
The burden of proof lies with the party invoking the infringement and, thus, with the competition authorities in administrative proceedings, in the context of the fundamental right to a defence enshrined in Article 24 of the Spanish Constitution. The onus is reversed when a party invokes the exemption in Article 1(3) of the Competition Act 2007 and Article 101(3) of the TFEU. As for the standard of proof, indirect evidence has been admitted in sanctioning proceedings by the Constitutional Court where (i) the basic facts have been fully proven, (ii) the causal link has been established and (iii) there is no alternative explanation. In this respect, Spanish competition rules go further than EU law in sanctioning consciously parallel conduct even where no contact between competitors has been demonstrated.
Additionally, the mechanism of grouping infringements into a single and continuous infringement allows the scope of a breach to be defined without demonstrating every single element thereof. The conditions are the same as those defined in EU case law:
In administrative proceedings, the Directorate for Competition of the CNMC investigates the conduct, while the Competition Chamber of the Board of the CNMC adopts a decision. Separation of inquiry and decision-making is also guaranteed in regional competition authorities (the Board of the CNMC adopting a decision if the regional competition authority only has an investigative body). In criminal proceedings, inquiry and trial are allocated to different judicial bodies as well. Regarding civil proceedings, evidence is examined at the request of a party, although the court may order that certain evidence be given where stipulated by law.
For the use of evidence from the administrative file in civil proceedings, see 5.4 Admissibility of Evidence Obtained from Governmental Investigations/Proceedings. Additionally, the CNMC is supposed to co-ordinate the enforcement of competition rules with other administrative bodies and courts in accordance with Article 4 of the National Markets and Competition Commission Act 2013. Therefore, enforcers may be expected to exchange information on proceedings conducted before them. The CNMC may also use the information obtained in one case in order to initiate a separate investigation, provided that the evidence was legally obtained.
See 2.2 Dawn Raids, 3.1 Obtaining Information Directly from Employees, 3.6 Procedure for Issuing Complaints/Indictments in Criminal Cases and 3.7 Procedure for Issuing Complaints/Indictments in Civil Cases.
Experts play a crucial role in cartel enforcement, especially in technically complex areas. Expert reports are used both by the parties and the authority in sanctioning proceedings. The role of economist has emerged, after the implementation of the Damages Directive, as critical for the calculation of damages in civil proceedings.
For legal privilege, see 2.12 Attorney-client Privilege and for protection of certain information in the file, see 5.4 Admissibility of Evidence Obtained from Governmental Investigations/Proceedings.
The non bis in idem principle is recognised under Spanish law and, thus, the same conduct cannot be sanctioned more than once. That principle applies to the concurrence of enforcement actions by different authorities applying homogeneous provisions (for example, the CNMC and European Commission applying Article 1 of the Competition Act 2007 and Article 101 of the TFEU).
In Spain, the CNMC and those regional competition authorities that have a decision-making body are entitled to impose the administrative sanctions directly, as described in 1.2 Public Enforcement Agencies and Scope of Liabilities, Penalties and Awards.
No plea bargaining or settlement procedures are provided for under Spanish competition rules, whereas the European Commission offers reductions of fines to companies acknowledging their liability for cartel infringements. However, the CNMC has decided to establish this procedural possibility along the lines of EU competition rules, in order to apply reductions in fines when there is co-operation by companies in the form of not opposing the existence of an infringement. Moreover, cartel infringements are not eligible for early termination under Article 52 of the Competition Act 2007.
In practice, the CNMC has availed of the mitigating circumstance of co-operation to grant reductions in fines of up to 15% in certain cartel cases, in favour of companies that have admitted to participation in a cartel in the response to the statement of objections (see case S/0226/10 Licitaciones de Carreteras ) and even for companies that had not complied with their co-operation obligations as leniency applicants (see case S/0086/08 Peluquería Profesional ).
Aside from other administrative consequences, as described in 1.2 Public Enforcement Agencies and Scope of Liabilities, Penalties and Awards, the finding of liability in administrative proceedings facilitates the bringing of follow-on actions for damages before civil courts. This is given that Article 75 of the Competition Act 2007, implementing the Damages Directive, provides that final decisions by Spanish competition authorities and courts are irrebuttable presumptions of the existence of an infringement. However, final decisions of competition authorities and courts from other member states of the EU only provide rebuttable proof. Decisions by competition authorities may be used as prima facie evidence in criminal prosecution as well, although it is rare to see this type of proceedings in Spain.
Criminal liability arising from cartels may include a prison term of one to three years, a fine from 12 to 24 months and prohibition from participating in public tenders from three to five years in cases of bid-rigging in public tendering, under Article 262 of the Criminal Code 1995; a prison term of one to five years and a fine from 12 to 24 months in cases of the removal of necessity goods from the market in order to cause shortages, distort prices or seriously harm consumers, under Article 281 of the Criminal Code 1995; or a prison term of six months to six years, a fine from two to five years, or three times the amount of the illicit gain if higher, and prohibition from participating in the financial market as an agent in cases of distortion of prices resulting from free competition by means of violence, threat or deceit, under Article 284 of the Criminal Code 1995.
Considering the civil consequences, cartels result in the nullity of the agreement or conduct in question, as provided for in Article 1(2) of the Competition Act 2007 and Article 101(2) of the TFEU. Furthermore, those having suffered damages as a result of competition infringements have standing to bring an action for redress before the civil courts, in accordance with Articles 71 to 81 of the Competition Act 2007. In the case of cartels, claims for damages are facilitated by means of presumptions, such as the exemption from proving that such infringements actually caused harm.
No reductions of fines on account of implementation of compliance programmes by infringers are specifically available under the Competition Act 2007. However, the CNMC has recently considered applying the criminal regime for legal persons’ liability by analogy, which allows the establishment of such measures before the hearing to be considered an attenuating circumstance (see case S/DC/0544/14 Mudanzas Internacionales ). Although the existence of a robust compliance mechanism was not supported by evidence in the case in question, its later implementation could have been relevant for fine calculation.
No mandatory consumer redress is available in competition administrative proceedings. Nevertheless, actions undertaken with a view to repairing the harm caused may be considered as an attenuating circumstance.
Additional Provision 4 of the Administrative Judicial Procedure Act 1998 [13 July 1998] sets out that appeals against decisions of the CNMC may be filed before the Administrative Chamber of the National Court of Appeal. Additionally, the suspension of the execution of the decision may be requested as interim relief. In cartel cases, the final decision of the CNMC relieves leniency applicants from their co-operation duty so that they may challenge it. Decisions of regional competition authorities may be challenged before the corresponding Regional High Court. Finally, cassation appeals (ie, challenges limited to points of law) are possible against judgments of both the National Court of Appeal and the Regional High Courts before the Administrative Chamber of the Supreme Court.
In practice, decisions of the CNMC are very frequently challenged but the success of substantive means tends to be limited in cartel cases. Indeed, the National Court of Appeal often endorses the assessment by the CNMC especially where leniency applications were filed. On the contrary, the National Court of Appeal has been systematically quashing decisions of the CNMC on the grounds of fine calculation following the judgment of the Supreme Court that annulled the fining methodology. Additionally, procedural irregularities in the investigation have also led administrative courts to set aside decisions by Spanish competition authorities.
As mentioned in 3.7 Procedure for Issuing Complaints/Indictments in Civil Cases, civil actions arising from breaches of competition rules, including cartel infringements, whether seeking redress for damages or declaration of nullity of the agreement or conduct concluded in breach of such rules, may be brought before commercial courts, under Article 86 ter of the Judiciary Organic Act 1985. Nevertheless, ordinary civil courts remain competent in relation to indirect claims based on competition rules that may arise in proceedings that they are hearing.
The legal grounds for such actions are Article 1(2) of the Competition Act 2007 and Article 101(2) of the TFEU, as well as the general rule in Article 6(3) of the Civil Code 1889, which provide for the sanction of nullity, and Articles 1303 and 1902 of the Civil Code 1889, which constitute the basis for, respectively, the reciprocal restitution of contribution where a transaction is null and void, and compensation for damage caused through fault or negligence (extra-contractual liability). In 2017, the amendment of the Competition Act 2007 and the Civil Procedure Act 2000 in implementation of the Damages Directive brought about a specific regime for actions for damages resulting from competition infringements.
No class action mechanism as such is available under Spanish law, but two main regimes allow for collective actions to be brought. Firstly, the joining of claims by a number of plaintiffs is possible under Articles 12 and 72 of the Civil Procedure Act 2000 where they are linked by means of the same grounds or cause of action. Secondly, in the case of consumer litigation, Article 11 of the Civil Procedure Act 2000 provides consumer associations with standing to bring action in support of not only the interests of their associates but also the general rights of all consumers.
Passing-on is governed by Articles 78 and 79 of the Competition Act 2007 and has been accepted as a defence by the Supreme Court (see, for instance, appeal 2472/2011 ). In particular, the general principle that the burden of proving harm is borne by the invoking party is reversed for indirect purchasers, who would thus only have to prove (i) the infringement, (ii) the causal link to harm and (iii) the value of that harm, but not the fact that an overcharge was passed on to them through direct purchasers. In contrast, it is for defendants to demonstrate that direct purchasers actually passed the overcharge resulting from the infringement onto their own customers if they intend to avail of such a defence.
The general principle in civil procedure is full disclosure. Hence, civil courts may order the disclosure of evidence available in the administrative file once a final decision has been adopted by the competition authority. However, Article 283 bis (i) of the Civil Procedure Act 2000 provides for complete protection of the leniency statements and settlement submissions. Business secrets also benefit from confidentiality mechanisms such as access by a restricted number of people bound by a secrecy obligation or in data rooms at court premises. Moreover, Article 43 of the Competition Act 2007 imposes a strict duty of secrecy on all parties to sanctioning proceedings.
The average duration of one to two years of judicial proceedings, as well as difficulties in estimating damages or the presumption of harm in cartel cases, encourage settlement before trial. However, the tendency towards extrajudicial settlement largely depends on whether the particular forum is more prone to rule in favour of the plaintiff or the defendant. If the paper envelope cartel is taken as an example, out of the seven judgments pronounced in 2018, the five rulings by commercial courts in Barcelona granted redress for between 47% and 100% of the damages requested by the plaintiff, while the two judgments by commercial courts in Madrid ruled in favour of the defendant. Litigation related to the EU truck cartel case has resulted in a number of judgments.
Success fees are permitted under Spanish deontological rules (see Article 44(3) of the General Statute of Spanish Lawyers and judgment of the Supreme Court in appeal 5837/2005 ). This sort of arrangement was not originally used widely in Spain but it is becoming increasingly common due to the rise of consumer litigation in recent years, fostered by investor protection rules and, more recently, implementation of the Damages Directive.
The general principle under Article 394 of the Civil Procedure Act 2000 is that the losing party must satisfy all litigation costs, limited to one third of the claim value for each of the successful parties, unless the court has reasons to consider that the case involves serious legal or factual doubts in light of precedents in similar cases. Where the rejection is only partial, each party is to bear their own litigation costs and the corresponding proportion of common costs, unless the court considers that one of the parties should bear all the costs because it acted recklessly.
Remedies against first-instance rulings on private actions for damages are governed by general civil procedure rules, which provide for the possibility to appeal before the Provincial Court and, where available under 477 of the Civil Procedure Act 2000, cassation before the Civil Chamber of the Supreme Court, in accordance with Articles of 56 and 82 of the Judiciary Organic Act.
Regarding enforcement trends, the CNMC’s focus is expected to continue to be on bid-rigging cartels in public procurement. Under this concern, the use of ineligibility sanctions for the first time this year seems to be the beginning of a trend, as inferred from 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. As for private enforcement, the dramatic widening of actions for damages that started with the implementation of the Damages Directive is expected to continue, especially around the paper envelope and truck cartels.
An overview of the CNMC’s activity is available at: www.cnmc.es/sites/default/files/editor_contenidos/Competencia/2017/CNMC%20competition%20web.pdf.
The Leniency Notice 2013 is available at: www.cnmc.es/en/ambitos-de-actuacion/competencia/programa-de-clemencia.