The European Antitrust Review 2015 Section 4: Country chapters

Spain: National Commission for Markets and Competition

José María Marín Quemada

Chairman of the National Commission for Markets and Competition

2013 has been a critically important year for competition in Spain. The National Commission for Markets and Competition (CNMC) was born from a merger of the regulatory and competition agencies; and the enforcement results of the Competition Authority reached its peak in terms of fights against cartels, with record fines and dawn raids.

The new authority merges the competition body with several sectorial regulators (energy, telecommunications, audio-visual, transport and postal), with the aim of guaranteeing, preserving and fostering the correct operation, transparency and effective competition in all sectors and markets.

The new regulator and antitrust authority acts independently from the government and companies, and it is only subject to parliamentary oversight.

It aims at the efficient economic regulation of network sectors such as telecoms, energy, postal or transport, while at the same time ensuring effective competition in the markets preventing private and public operators from hindering the development of competition.

The new agency was launched in October 2013, and during its first months of operation it has had the challenging task of organising the merger of different agencies with different cultures and backgrounds while at the same time performing its daily work as sectorial regulator and competition enforcer.

This new model, integrating competition and regulatory authorities, can surely improve competition in regulated sectors by reducing the risk of conflicting resolutions, but it surely also needs time to coordinate and integrate different ways of looking at problems and accommodate different cultures under the same organisation. Establishing the flow of information between directorates, determining mechanisms to ensure the early detection and discussion of potential disagreements, deciding which tool should tackle a specific case or ensure effective coordination between regulation and competition at a Council level are all tasks and challenges that the new CNMC must address to fully obtain the benefits that an integrated action can deliver.

On 13 May 2014, the CNMC’s Strategic Plan was presented to parliament after being approved by the Council. Previously, the Plan had been improved through a public consultation process. The Plan sets out three critical elements (mission, vision and values) and three main objectives to be achieved through 16 strategic actions. The CNMC’s Mission is to ‘promote and defend the proper and correct operation of all markets in the interests of citizens and commercial businesses’.

To join the different agencies and create a single Authority, the CNMC has started to deliver taking advantage of the successful experience at the former CNC. During 2013 and the beginning of 2014, 18 dawn raids were launched and 70 companies were dawn raided, 23 decisions on cartel issues (12 of them hard-core cartels) concluded with total fines totalling €227 million (of which €193.3 million was imposed on hard-core cartels). The average fine per cartel was €16.1 million and the average length of a cartel investigation was 21 months. Most of the cartel cases were initiated by leniency applications, which celebrated its fifth anniversary in 2013. To enhance transparency and predictability, a set of Leniency Guidelines were published in the summer. Most important cartels where discovered in the manufacture of paper stationery; the manufacture of polyurethane foam (€26 million fine); roads and railways construction; car rental (€35 million); and container freight transport (€43 million fine in the port of Valencia or €20 million fine in the port of Barcelona).

As for mergers, 59 merger fillings were submitted in 2013, of which four were authorised with commitments offered by the parties in the first phase and 48 straight. Four went to second-phase proceedings (in-depth analysis), three were resolved with remedies or commitments in the second phase, and one was abandoned.

With respect to advocacy, some of the milestones during this period included studies on the Spanish land market, wholesale markets for food products, railway transport or public tenders in the health sector. Furthermore, the Spanish Authority approved a series of more than 30 reports on legislative proposals related to practically all economic sectors. Those reports were all made publicly available and are helping to promote and advocate for the structural changes underway in the Spanish economy.

As for the challenges ahead, the CNMC is a very new type of competition authority without many international references to build on, but with a clear heritage and purpose. We are still in our first year of existence and synergies will take time to be fully realised. Regarding the fight against cartels, we remain fully committed to maintain, and if possible, improve, with time and effort, the previous levels of excellence.

The integration into a single body of competition and regulation will allow us to exploit the benefits deriving from the existence of comparable supervision duties, similar methodologies and procedures and, above all, knowledge, expertise and experience that are pooled together. Coordination between the different departments (telecoms, energy, postal services and competition) prior to taking decisions on how to tackle a competition or regulatory problem is a great opportunity for achieving optimal solutions to difficult problems. Introducing ex ante regulation lessons derived from ex post competition experiences should allow us to improve regulation quality. Competition cases and regulatory design benefit from having a multidisciplinary team working together in regulated sector files and a sole decision body which overlooks the work of the different departments, reinforcing coherence and sound decisions. The new CNMC is therefore more capable of preserving and promoting effective competition in all markets and productive industries. In fact, the model of mixing competition and regulation authorities could increase competition in regulated sectors (furthering liberalisation) and reduce the risk of diverging opinions and resolutions (due to lack of coordination) from separate agencies when dealing with competition conflicts at regulated industries.

Aside from improving decision-making on network industries and contributing to deepening the liberalisation of regulated markets, the new CNMC remains fully committed to strengthening the persecution of harmful practices for competition, particularly cartels. Investigations in the milk sector, fuels, electricity, car manufacturing and distribution, paper board, fire extinguishers or modular buildings are underway and ex officio work will continue to be developed in sectors such as public procurement, waste management, the telecoms and audio-visual industry, distribution, pharmaceuticals, health services and liberal professions. Improvement of procedural issues such as confidentiality, access to file at the decision stage or improvement of the statement of objections will also be pursued in the coming months.

In the advocacy field, the CNMC has followed the same active posture as its predecessor, the CNC. The number of reports on the government’s draft regulations has increased, and the intention is to focus on the upcoming reforms of the Public Procurement Act, the Commercial Code or the Subsidies Act, and on specific fields such as education, professional services and the food chain. In some areas where the CNC had previously issued several reports and recommendations to improve legislation, the government returned to the CNMC to seek advice on how to draft new rules. The CNMC will soon announce its Planning on Market Studies in order to improve transparency and stakeholder’s participation.

Advocacy, as with the rest of the CNMC tools, will benefit significantly from the integration with sectorial regulators. In this regard, the CNMC will play a relevant role in shaping all the relevant regulatory reforms, underway or planned, as is the case of rail passenger transportation, airports, urban water provision or the energy reform.

Chairman of the National Commission for Markets and Competition

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