On 31 March, 2023, the Spanish Government made public the Draft Bill No. 121/000134 aiming to create the Independent Administrative Authority for the Defense of Financial Customers. This Draft Bill includes a proposal to amend the Spanish Competition Act in relation to the sanctioning proceedings before the Spanish Competition Authority (“CNMC”), the implementation of a settlement procedure in Spain, and increasing the maximum penalty of fines imposed as a consequence of an anticompetitive conduct.
Although it is not yet certain which of these amendments will be approved until the final text of the law becomes public, for now, the most relevant changes proposed to the Spanish Competition Act are the following:
Extension of the deadlines within administrative procedures
It is proposed to extend the maximum time limit for notifying decisions terminating the sanctioning procedures for anti-competitive conducts -currently set at 18 months- to 24 months.
Changes are also proposed to the deadline for issuing and notifying decisions on merger control proceedings including:
- Ensuing a period of one month for issuing a decision on the notified transaction within Phase I is maintained;
- Extending the deadline for a decision has which been proposed from two to three months in Phase II; and
- Introduction of a 15-day deadline for mergers notified using the Short Form.
Implementation of the settlement procedure in Spain
One of the major innovations of this proposal is to introduce a settlement procedure into the national legislation. The settlement procedure has been available at an EU level for cartel cases since 2008. This procedure essentially allows companies which acknowledge their responsibility in a competition law infringement to obtain a 10% reduction of their fines.
The parties must admit their participation in the anticompetitive practice under investigation, which generally leads to a shorter and quicker administrative process, and allows for a more efficient use of the resources. In fact, the good functioning of this mechanism at an EU level – and also nationally in other EU countries (e.g., France, Belgium or Portugal)- has motivated its implementation in Spain.
However, whereas the EU settlement procedure applies to cartel investigations only, the settlement procedure applied in Spain is intended to be also available to other antitrust procedures, including abuses of a dominance and acts of unfair competition that may have an impact on the public interest.
The initiation of the settlement procedure would suspend the maximum time limit for a decision and, depending on the moment in which the settlement application was submitted, the applicants could benefit from a higher reduction of:
- Up to 15% if it was submitted before the notification of the Statement of Objections; or
- Up to 10% if it was submitted afterwards, until to the closure of the investigation.
Moreover, according to the current draft proposed, it is provided that the eventual reduction obtained under the settlement procedure might be added to an eventual reduction obtained from the leniency program.
Modification of the amount of fines
Lastly, the Draft Bill also proposes to raise the amount of fines that can be imposed as a consequence of a competition law infringement.
On the one hand, fines to individuals directly involved in an anticompetitive behavior can currently reach up to EUR 60,000. However, it has been often discussed that this amount may not be enough of a deterrence and it has now been proposed to increase these fines to a maximum of EUR 400,000.
Where it is not possible to determine the turnover of the infringing undertakings (or association of undertakings), the Spanish Competition Act establishes quantitative thresholds to establish the fine to be imposed depending on whether it is a minor, serious or very serious infringement. The Draft Bills proposes to increase those thresholds as follows:
- Minor infringements shall be sanctioned with fines of up to one million euros (currently there is a maximum limit of EUR 500,000);
- Maximum fines for serious infringements are maintained at up to EUR 10 million; and
- It is proposed to set up a maximum limit for very serious infringements (which currently does not exist) of up to EUR 50 million.
However, we will have to wait to see whether the proposed changes are finally introduced into the national legislation and in what terms.
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