NEW SPANISH COMPETITION ACT

Five are the basic principles of this new act:

• to warranty the legal security of the economic undertakings
• the independence in the taking of the decisions
• transparency and liability before the society of the administrative bodies enforcing competition rules
• efficiency in the fighting against the anticompetitive behaviours, and
• coherence of the system, particularly at the institutional levels.

The Act is divided in Five Titles.

I. The First Title contains substantive aspects of the competition politics.

• Concerning the restrictive behaviours, the Act includes some modifications in three main lines:

1. the different kind of infractions are clarified and simplified maintaining the prohibition of agreements between undertakings and the abuse of a dominant position;
2. the old system of the singular authorisation is substituted by a general system of exemption following the EU model, permitting the auto-evaluation by the undertakings;
3. the ‘de minimis’ rule and its effects are clarified leaving to a following Regulation to specify the criteria according to the market share.

• Concerning Mergers control, the Act includes some new aspects:

1. It clarifies and enlarges the notion of Merger (the existence of an stable change in the structure control in an undertaking either ‘de iure’ or ‘de facto’), highs up the thresholds (30% of the relevant market share and 240M Euro of global business in Spain for all the participants with at least 60M Euro done in Spain by at least two of the participants) with a mechanism for its updating and introduces a simplified procedure for those mergers with less impact on competition;
2. It maintains the compulsory previous notification with delayed effect but by softening it and with the possibility of cancelling the suspension of its enforcement at any moment during the procedure;
3. (c) It reinforces the participation of the National Commission for Competition in the Merger Control procedure limiting the role of the Government. It also specifies the substantive criteria for their decision separating those governing the decision of the National Commission than those of the Government, including a non-exhaustive list of concrete criteria for each body.

• A third Chapter concerns the State Aids. The National Commission for Competition is authorised to analyse the criteria for the granting of those aids, producing reports and addressing recommendations in this field with the possibility of the different Autonomous Regions to intervene on a complementary basis.

II. The Second Title includes the institutional schema. The newly created National Commission for Competition, as a Central State administrative body, includes the olds Service and Court for the Defence of Competition.

III. The composition, functions, and economic resources of the National Commission are developed in the Third Title of the Act. The scheme includes the necessary coordination between this body and the other administrative bodies enforcing this Act, as well as the coordination with the Jurisdictional Courts.

IV. Fourth Title deals with the different procedures either for prohibited practices than for merger control, based on the principles of legal security and administrative efficiency, simplifying the procedures and separating the preliminary steps and the final decision. Also the penalties procedure is considered in this Title with some flexibility and a conventional termination with the possibility of some compromises assumed by the presumed infringer as well as some flexibility in the preliminary measures.Merger control procedure has the same two steps and the reduced delays of the previous Act. In the first step, which will last a maximum of one month, mergers having no problems on competition will be analyzed and approved. In a second step, a further exam on the operation will be made with the possibility for third parties to participate. In case the National Commission decides to prohibit the Merger or to condition it to some compromises, the Finance Ministry has fifteen days to ask the Government for a Decision. If it was the case, the Government has to decide on the Merger in no more than one month.

V. Fifth Title deals with the penalties regime with important progress in legal security because it contains a graduation of the different penalties clarifying maximum ones for each case according to the volume of sales of the infringers, fixing the criteria for the concrete fines according to the trends in the European market and with the necessity of publicity for all the imposed ones.The Act also introduces a clemency procedure similar to the EU one, with the exoneration of fines for those undertakings that not having been investigated, have participated in a cartel but have denounced its existence, granted evidences and renounced to continue with the previous conduct.

VI. Finally, in some additional dispositions, and as one of the main new elements of the Act, it is also included some jurisdictional and procedural legal modifications in order to permit the private application of the competition rules by the Commercial Courts.

The Act derogates the old one (Act 16/1989 of July 17th) and comes into force in September, 1st 2007.

Ignacio Alonso, IDI Country Expert for Spain.

The text of this Act can be found in the Legislation Section of the IDI website.