NATIONAL MARKETS AND COMPETITION COMMISSION FINES SEVERAL DAIRY COMPANIES FOR EXCHANGING SENSITIVE INFORMATION
The National Markets and Competition Commission (“NMCC”) has fined nine companies and two dairy industry associations a total of EUR 88.2 million for anti-competitive practices.
The anti-competitive practices involved exchanging commercially sensitive information which was part of a common strategy aimed at sharing the market for the supply of raw cow’s milk. In addition, the parties had occasionally entered into agreements on purchase prices and to divide-up the supply sources between them.
This is one of the first resolutions in which the NMCC has applied the recent case law of the Supreme Court (“SC”) on calculating fines, which establishes that the NMCC can no longer apply its own criteria to calculate fines envisaged in its Notice on Fines. Consequently, the fine in this case was calculated on the basis of a percentage of each infringing party’s total turnover in the previous year. This percentage was calculated according to different criteria, such as each party’s market share in the market affected by the infringement, duration of the anti-competitive practices, seriousness of the infringement or the illicit profit obtained.
NATIONAL MARKETS AND COMPETITION COMMISSION FINES CAR DEALERS OF SEVERAL BRANDS FOR PARTICIPATING IN A CARTEL
The National Markets and Competition Commission (“NMCC”) has fined forty-five multi-brand car dealers a total of EUR 9 million for their participation in a cartel.
The resolution holds that the dealers exchanged commercially sensitive information and reached agreements to fix final sale prices.
The NMCC has also fined two external consulting firms for their involvement. The two consulting firms made regular visits to the dealers to gather information that was subsequently made available to the rest of the entities participating in the agreement. The resolution states that the role performed by these two firms was essential to guarantee the effectiveness of the agreements.
COURT CLARIFIES RULES TO CALCULATE DEADLINES FOR SANCTIONING PROCEEDINGS INITIATED BY THE COMPETITION AUTHORITIES
In several judgments dated March 2015, the Spanish National Court (“NC”) held that the method followed by the former National Competition Commission (“NCC”) to calculate the suspension of deadlines to issue a decision was erroneous, and as a result declared that various sanctioning proceedings were time-barred.
Article 12 of the Competition Regulation (“CR”) establishes that if the time frame to issue a resolution in sanctioning proceedings is suspended, the new deadline will be determined by adding the number of calendar days during which the time frame was suspended. If the last day of the new deadline was a non-working day, the NCC would push back the deadline to the next working day. For subsequent suspensions, the last day of the deadline from previous suspensions was used as a reference to calculate the new deadline.
The NC held that this calculation method was incorrect because the CR only refers to calendar days and not working days for the purpose of recalculating the new deadline following a suspension in the proceedings. This way the deadline may be only pushed back to the next working day when the last day of the suspension period is a public holiday. Public holidays cannot be excluded for interim suspensions.
The NC also recalled that the competition authority must notify the interested parties of the suspension of the proceedings and the new deadline each time a suspension is declared. The failure to do so means that the suspension will not be taken into account for the parties who do not receive the notification.
COURT DECLARES THAT THE NATIONAL COMPETITION COMMISSION EXCEEDED ITS POWER TO ENFORCE A JUDGMENT
The Spanish National Court (“NC”) has held that the National Competition Commission (“NCC”) cannot recalculate a fine that had been imposed on a company, by applying the leniency policy which the NC had wrongfully denied in the first place.
The NCC exceeded its power when it modified with retroactive effects a sanctioning decision which had been overturned, with the alleged aim of enforcing the NC’s judgment annulling the NCC’s decision.
The NC had annulled the NCC’s decision because the appellant had not had the opportunity to submit allegations against the NCC Council’s decision to withdraw a reduction on the fine for having cooperated under the leniency programme. The NCC Council’s decision was contrary to the opinion of the Investigations Directorate, which had argued during the entire proceedings that the company met the legal requirements to benefit from the reduction. The judgment of the NC declared that the NCC’s decision was null and cancelled the fine imposed. Following this, the NCC issued a new resolution to enforce the decision, in which it recalculated the fine to be imposed on the company and applied a reduction for its cooperation.
In a subsequent judgment, the NC considered that the NCC’s actions exceeded what had been established in the wording of the NC’s judgment annulling the decision, as they modified the content of the decision and therefore violated article 24 of the Spanish Constitution. The NC therefore annulled the NCC’s decision to enforce the judgment, which meant that no sanction could be imposed.
SUPREME COURT ANNULS SANCTIONS IMPOSED BY NATIONAL COMPETITION AUTHORITY
The Supreme Court (“SC”) has rendered several judgments that confirm its judgment of 29 January 2015 concerning the unsuitability of the method used by the National Markets and Competition Commission (“NMCC”) to calculate the sanctions for the infringement of competition rules.
In these judgments, the SC confirms that the sanction limits that the Competition Authority can impose pursuant to the Spanish Competition Law refer to a company’s total turnover and not the turnover generated in the market affected by the infringing conduct. As a result, the SC declared that the NMCC cannot use the calculation method that was used by the former National Competition Commission to calculate fines.
As a result, both the Spanish National Court and the SC have annulled several decisions in which the NMCC had sanctioned infringing companies and have returned the files to the NMCC so that it can recalculate the fines accordingly.