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THE SPANISH COMPETITION
AUTHORITY PUBLISHES A REPORT ON COMPETITION IN THE FUEL SECTOR IN SPAIN
On 15 October
2012, the Spanish Competition Authority (“CNC”)
published a report on competition in the motor fuel market in Spain.
analyses the competitive situation of the fuel markets in Spain to
highlight the fact that the gross distribution margin of oil companies
is one of the highest in the European Union. On the basis of this
analysis, the CNC proposed a number of measures to increase competition
at all levels, including among others:
a. Concerning logistics and the activity of
Compañía Logísitca de Hidrocarburos
the monopolist company in charge of managing the national oil pipeline
network, the CNC suggested:
1. Increasing the independence of
CLH in relation to companies active in the fuel refining and fuel
marketing segments in Spain. At present, all the national operators
are shareholders of CLH and exert a certain degree of influence
without being subject to any exception or incompatibility.
2. Increasing the regulations on
the monopolistic activity of fuel transport, in particular in relation
to access to network tariffs. The CNC intends to limit the freedom
enjoyed by CLH when fixing the network tariffs.
3. Reinforcing the control
exercised over the storage activity thereby ensuring access to it and
facilitating the installation of alternative storage systems.
b. In the context of wholesale distribution, the opening of new
fuel refining facilities was proposed in order to increase the offer
available to current operators.
c. As regards retail distribution, the CNC proposed:
1. Facilitating the opening of new
petrol stations. It was suggested to limit the number of concessions
to companies that control or have the capacity to decisively influence
the management of a substantial part of the petrol stations in a given
geographic area (similar to the control of radio stations).
2. Reducing the duration of
exclusive supply agreements and in particular, regulating the maximum
duration of such contracts where the supplier is an operator with
significant power in the distribution of motor fuels to petrol
3. Banning resale price
recommendations to petrol stations made by suppliers with significant
power in the distribution of motor fuels to petrol stations and
limiting the exercise of voting rights and presence in governing
bodies of competing companies.
4. Fostering transparency to
reduce search costs for consumers and to reinforce their capability to
compare prices between petrol stations.
This is the third
report published by the CNC on the fuel sector in recent years (it
published another in June this year and another in 2009). As with the
previous ones, the latest report has been strongly criticised.
It is particularly
relevant that the CNC drafted this report in response to an express
request from the State Secretariat of Economy and Assistance to
Companies. This request was made in the context of a study that is being
conducted by the Ministry of Economy on competition in the motor fuel
sector, especially in the light of the recent price variations. The
Ministry of Industry, Tourism and Trade has already announced its
willingness to follow these recommendations. Although the CNC publishes
business sector reports from time to time, it is rare to issue reports
at the request of a public body in the context of a potential amendment
of the regulations on the business sector.
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SPANISH COMPETITION AUTHORITY FINES THE REPRESENTATIVE OF A TRADE
ASSOCIATION FOR STATEMENTS MADE ON PRICE INCREASES
On 19 January 2011,
the President of the Tourist Council of the Spanish Confederation of
Trade Organisations (“CEOE”)
made some statements in the context of the International Spanish Tourism
Fair (“FITUR”) in which he
suggested increasing prices in Spanish hotels to bring them in line with
other European markets. These statements were followed by an interview
in the digital edition of the financial newspaper “Cinco Días” in which
the representative suggested a price increase of 6% or 7%.
Competition Authority (“CNC”)
considered that these statements constituted a collective price
recommendation because they proposed a joint course of action among
competitors. This would be contrary to article 1.1.a of the Spanish
Competition Law (Ley de Defensa de la Competencia, “LDC”).
The competition authority followed the criteria of previous decisions
and took into account (i) the content of the statements (with a direct
message to prompt a joint response); (ii) their level of coverage (it
was made in the context of a specialised forum attended by
businesspeople and professionals alert to any professional
recommendations); and (iii) the position and responsibility of their
author. Consequently, the CNC imposed a fine of EUR 150,000 to the CEOE
and EUR 50,000 to the author of the statements.
This is the first
time since the entry into force of the LDC that the CNC has imposed a
sanction on an individual for a breach of competition law. However, it
is not the first time the CNC imposes a penalty on the representatives
of infringing companies. The first case of this kind dates back to 1993
(Case 322/92). Since then, at least five decisions have been issued in
the same vein. In all those cases, the penalty was imposed on the
director, as well as on the company, when the director had an active
role in the conduct under investigation.
In this case, in
addition to starting the first precedent under the current regulatory
framework, the CNC incorporated two novelties in relation to the way in
which this power was exercised under the regime established by the
a. For the first time, the penalty imposed on the representative
of a company was based on his own statements. In previous cases, the
statements were made in the context of previous actions carried out by
the association or undertaking he/she represented.
b. This decision also introduced the possibility of imposing a
penalty on an association for an omission. This omission would include
the failure to publicly distance oneself from the statements made by the
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SPANISH GOVERNMENT SUBMITS A PROJECT TO SET UP A NATIONAL COMMISSION FOR
MARKETS AND COMPETITION
On 19 October 2012,
the Official Gazette of the Spanish Parliament published the legislative
bill to set up the national commission for markets and competition (the
“Project”). The law
intends to create a single body in Spain to carry out the duties of
seven business sector regulators (airports, energy, telecommunications,
postal communications, rail transportation and audiovisual media).
According to the
Project, the purpose of the reform would be the institutional
rationalisation of the Spanish public authorities, saving costs and
creating synergies derived from the coordinated action of the different
regulators. The Project is controversial and seems to have raised some
concerns in the European Commission. The CNC itself has published a
report recommending certain amendments.
The new body would
have supervision, arbitration and consultation powers. Its role in the
context of competition law would be particularly relevant. Although the
reform does not amend competition laws significantly, it substantially
modifies the institutional scenario for their enforcement and introduces
some fields in the procedure and duties that may be relevant in applying
competition law. For instance, it increases the inspection powers of all
the officials in the institution.
The publication in
the Official Gazette of the Parliament initiates the legislative process
to pass the law. As no particular difficulties or significant amendments
are expected before its approval, the new body is expected to be
operative sometime in 2013.
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