Spain: Year-in-review – Spanish competition law in 2022 and what to expect for the new year
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In 2022, the Spanish Competition Authority (“CNMC”) was very active in competition law enforcement. It imposed several fines, particularly for abuse of dominant position and bid-rigging practices.
The CNMC has also played an essential role in merger control, public consultation procedures, and promotion of competition in highly regulated sectors, such as telecommunications, audio-visual rights and transport sectors.
For this new year 2023, we can expect significant changes for the digital sector and a continuation of the actions initiated by the CNMC this past year in accordance with its 5-year Strategic Plan, which sets its objectives until 2026.
Abuse of dominance
During 2022, the CNMC put considerable efforts into investigating alleged abuses of a dominant position, which has led to the imposition of heavy fines on several companies in different sectors.
- In February, the CNMC imposed a fine of 32.6 million EUR against the Spanish National Postal Company, Correos, for the application of certain discounts that would have had a foreclosing effect on the retail market in respect of the provision of traditional letter mail services to mass mailers from at least 2015 until 2019.
- In May, the CNMC fined the Royal Canine Society of Spain (“RCSA”) nearly 143,000 EUR for exclusionary abuse in different markets related to purebred dogs.
- In June, the CNMC imposed a fine of 4.9 million EUR to a major company in the energy sector in Spain for abusing its position of “Sole Node Interlocutor” in two access nodes to the power transmission network to ensure greater access capacity to nodes.
- In October, the Spanish authority imposed a fine of 39 million EUR on a pharmaceutical company active in the market for contraceptive rings for taking unjustified legal action against its new competitor with an anti-competitive purpose under the pretext of protecting its patent.
- In November, the CNMC fined a multinational pharmaceutical company 10.25 million EUR for excluding competitors and imposing excessive prices in relation to its orphan drug for the treatment of an ultra-rare hereditary metabolic disease.
Bid-rigging practices
Over the course of the past year, the CNMC has also been focused on investigating possible irregularities regarding competition in public tenders. Some of these investigations have led to the imposition of significant fines on several companies for their participation in bid-rigging cartels.
Particularly, in July, the CNMC imposed a fine of up to 203.6 million EUR on the six main construction companies in Spain for altering the competitive process in infrastructure construction tenders for more than 25 years.
Moreover, other investigations into the alleged manipulation of tender procedures are currently ongoing:
- For instance, some companies are being investigated for their participation in tenders for the supply of basic foodstuffs to communities dependent on public bodies.
- Another investigation is being carried out in relation to military equipment. The proceedings were initiated in 2021, but in 2022 the proceedings were extended to include a parent company and six individuals allegedly involved in the conduct under investigation.
Other highlights in Spanish Competition Law enforcement
Although the CNMC has concentrated a large share of its resources on investigating potential abuse of dominance and bid-rigging practices, it has also imposed some other fines as a result of different conduct considered to be contrary to competition rules:
- In March, three companies active in the steel industry were fined 24 million EUR for exchanging pricing information regarding the ferrous scrap purchasing market.
- In July, two companies in the Spanish funeral sector were fined for failing to notify the CNMC of a merger between them prior to its execution. Failure to comply with the duty of prior notification - commonly known as “gun jumping”- constitutes a serious infringement under the Spanish Competition Act.
- In October, the CNMC imposed a fine of 9,2 million EUR on a company for distorting free competition by engaging in unfair acts prohibited by the Spanish Competition Act. The practices consisted of attracting electricity and gas customers from other companies through acts of confusion and deception.
Merger control
During the past year, the CNMC also played an important role in merger control, resulting in more than 90 mergers being authorised in 2022. Most of the operations were approved in Phase I without commitments, except for four transactions which required specific commitments from the participating companies in order for the transactions to be approved.
The CNMC considered it necessary to open the second phase in only three cases, where certain competition concerns were identified.
Public consultations
In relation to its duty to promote competition in the market, the CNMC has opened several public consultations, aimed at gathering market operators' opinions on different issues and sectors with the main purpose of ensuring a healthy competitive environment.
Among all the public consultations opened in 2022, those launched within the last quarter of the year should be highlighted:
- In September, the CNMC launched a public consultation procedure aiming to remove all the regulatory obligations imposed on operators active in the mobile termination market.
- Also in September, the CNMC opened a procedure to receive contributions to its latest draft of a Guidance on the quantification of damages for antitrust infringements.
- In November, the CNMC opened a public consultation on its draft Communication on the criteria that should be followed when imposing the prohibition to contract with the Public Administration due to an infringement of competition rules.
CNMC’s position regarding potential market failures in regulated markets
Also as part of its role of promoting competition, the CNMC has published different reports and statements on the regulation applicable to some highly regulated sectors, including telecommunications, audio-visual rights and transport sectors.
- Telecommunications sector
The CNMC released a report on the draft order that regulated the 26 GHz band, which would be key for the deployment of 5G technologies (please refer to our article in Competitive Edge from November 2022 for more information).
The CNMC considers the draft order to be positive, although it has made some suggestions to promote competition.
- Audio-visual sector
The CNMC has made numerous proposals throughout 2022 to guarantee effective competition in the marketing of audio-visual rights in football competitions. Usually, one of the main aspects that the CNMC addresses is the imposition of a maximum duration of these type agreements which, according to the CNMC, should be limited to three years in order to avoid a potential anti-competitive foreclosure effect.
For further information on the commercialisation of audio-visual rights in football competitions, refer to our article in Competitive Edge from April 2022.
- Transport sector
With respect to the transport sector, it is interesting to look at the regulation of VTCs, which has been a hot topic in the past year.
Specifically, it is worth highlighting the Joint Declaration on the VTCs sector agreed by the CNMC and the regional competition authorities. It has been agreed that the Autonomous Communities shall ensure that the regulation adopted regionally for this sector should not harm consumers or reduce competition in the overall taxi and VTC market.
What to expect for 2023
Some of the actions initiated by the CNMC in 2022 should continue to be developed throughout 2023. Most of the CNMC's actions can be framed within its 2021-2026 Strategic Plan, and it is expected for the CNMC to continue acting in accordance with this plan during the year 2023.
In particular, competition policies are expected to be significantly affected by regulatory changes, among which we can highlight the entry into force of the Digital Markets Act and the Digital Services Act. It is expected that this will play a very important role in competition law from this year onwards, being particularly relevant for companies in the digital sector.
For more information, please contact Candela Sotes.
