Reporting to the CNMC: unfair market competition and administrative barriers

Ley 15/2007 (the Spanish Competition Act, LDC) prohibits 3 main blocks of conduct: agreements between companies that restrict competition (art. 1: cartels, market sharing, price fixing, rigged bids in public tenders), abuse of a dominant position (art. 2: predatory pricing, refusal to supply, discriminatory conditions) and the distortion of free competition through unfair acts affecting the public interest (art. 3). Any natural or legal person, whether an interested party or not, can report this conduct to the Competition Directorate of the CNMC (art. 49.1 LDC). The report does not accrue a tasa (official fee).

Be careful with the "unfair competition" label: if the conflict is purely private between 2 companies (imitation, denigration, poaching clients) and does not affect the functioning of the market, the CNMC will shelve the report. This conduct is fought through Ley 3/1991 (the Spanish Unfair Competition Act) in court. Managora analyses how your case fits before submitting anything, so as not to waste the wrong option.

The penalties are serious: fines of up to 10% of the total worldwide turnover of the infringing company for very serious infringements, and up to €60,000 for each manager who has intervened (art. 63 LDC). Very serious infringements become time-barred after 4 years: the period is counted from the day the infringement was committed or, in continuous infringements, from when the conduct ceased (art. 68 LDC), so it is advisable to make a move before they expire.

The report is submitted with the content of Annex I of the Competition Defence Regulations (Real Decreto 261/2008): identification of the complainant, description of the facts, affected market (products, geographical scope and quotas if you know them), companies involved and evidence. Emails, contracts, price lists, suspiciously identical quotes or coordinated offers in public tenders are useful. The more specific, the better: the CNMC can agree not to initiate proceedings when the report provides weak indications or the potential damage is low (prioritisation criteria of art. 49.4 LDC).

Be realistic about the result: the CNMC penalises, it does not compensate. The fine is paid into the Public Treasury. Your direct benefit is that the conduct ceases; the indirect one is that a final sanctioning resolution opens the door for you to claim your damages in civil courts (arts. 71 and following LDC) with the infringement already declared.

Do not expect speed either: after the report there is a reserved information phase with no legal deadline and, if a file is opened, the sanctioning procedure can last up to 24 months (art. 36.1 LDC). You can request confidentiality for the data and documents you provide.

It is the other side of the coin: if your company participates or has participated in a cartel, being the first to provide the CNMC with evidence that allows inspecting or proving the infringement means total exemption from the fine (art. 65 LDC). The exemption also covers the prohibition to contract with the public sector and benefits the managers who collaborate. There is a marker system that reserves your place while the evidence is gathered.

Whoever arrives later can still reduce their fine if they provide elements with significant added value: between 30% and 50% for the first, between 20% and 30% for the second and up to 20% for successive ones (art. 66 LDC). In exchange, full and continuous cooperation is required, as well as ceasing the conduct and not destroying evidence or revealing the application. It is processed through a specific procedure on the CNMC electronic headquarters and the order of arrival is everything: only the first is exempt.

It is the fast, and almost unknown, route against the barriers of the administrations themselves. If a town hall or an autonomous community demands a licence, a guarantee, a course or a physical establishment in a disproportionate manner, or duplicates requirements that you already meet as an established operator in another part of Spain, you can claim before the Secretariat of the Council for Market Unity (SECUM) under art. 26 of Ley 20/2013 (the Spanish Market Unity Guarantee Act, LGUM). Any natural or legal person can claim, as well as business associations and chambers of commerce in defence of collective interests (art. 26.2).

It is free and very fast: the SECUM prepares an assessment report in 10 days, the CNMC and the rest of the contact points can provide theirs, and the claimed authority must pronounce itself in 15 days from the presentation; if it remains silent, the claim is understood to be dismissed by negative silence and the conclusion of the procedure puts an end to the administrative route (arts. 26.5, 26.7 and 26.11 LGUM). It is submitted through the electronic registry of the Ministry of Economy, Trade and Enterprise using a standardised form.

The Achilles heel is the deadlines and the exclusion: you have 1 month from the notification of the act or the publication of the rule (20 days if it is a de facto action) and the route is alternative: if you have already filed an administrative or judicial appeal, or expressed agreement with a sanctioning resolution (for example, by paying the fine with the early payment reduction), this door is closed (arts. 26.1 and 26.3 LGUM). That is why Managora first checks that your case is still open and only then quotes you for the assignment.

If the authority dismisses your claim (or remains silent), you have 5 days from the notification of the SECUM to ask the CNMC to file the contentious-administrative appeal itself (arts. 26.9 and 27 LGUM). The CNMC decides in 20 days whether to appeal, assessing the SECUM report, the viability of the action and its special significance: it is a discretionary power and no one can guarantee that it will exercise it.

If the CNMC appeals, it handles the lawsuit through the special procedure of arts. 127 bis and following of Ley 29/1998 (the Spanish Contentious-Administrative Jurisdiction Act, LJCA), at no cost to you, and a favourable ruling implies the correction of the infringing conduct and compensation for the damages caused, including lost profits (art. 127 ter.6 LJCA). You can also appear as a party in that process to defend your claims.

If the CNMC declines, you are not left without a defence: you can file your own contentious-administrative appeal, the deadline for which starts counting from the notification of the SECUM. Managora guides you on the next step depending on the response obtained.

For the report to the CNMC, you tell us the facts and provide us with the indications; we draft the report with the structure of Annex I of RD 261/2008 (facts, affected market, legal classification and evidence) and submit it to the CNMC electronic headquarters. You can see the updated amount on the procedure page.

The market unity claim is quoted according to the case: before charging you anything, we check that you have not appealed the act or accepted the penalty, that you are within the 1-month deadline and that the requirement fits into the LGUM. If the route is closed, we tell you and study the alternative; if it is open, we prepare the claim, submit it to the SECUM and, if applicable, the subsequent application to the CNMC. Start whenever you want from the page of each procedure.