The CNMC closes the wood chips file

European Union
The investigation concerned five wood chip suppliers for exchanges of sensitive information. 
The CNMC closes the wood chips file
November 22, 2023

Last September, the Spanish Competition Authority (“CNMC”) decided not to initiate sanctioning proceedings and to close file S/0007/22, regarding a possible infringement of article 1(1) of Spanish Competition Act 15/2007, of July 3 (“LDC”) and article 101 of the Treaty on the Functioning of the European Union (“TFEU”) in the Spanish wood chip market. 

In July 2022, the CNMC initiated confidential proceedings after becoming aware of a possible exchange of commercially sensitive information between the competing companies Sumitomo corporation, Amapá florestal e celulose S.A., Maderas de Uruguay S.A., Forestal Atlántico Sur S.A.R.L., and Generandi S.L. At the same time, on July 5, the Portuguese Competition Authority (Autoridade da Concorrência, “AdC”) had also initiated sanctioning proceedings for the same facts. Following a request for cooperation from the Portuguese authority, the CNMC and the AdC carried out a joint inspection at Generandi’s headquarters in October 2022.

Despite the closing of the case by the CNMC, AdC’s proceedings are still ongoing

Following the inspection, the CNMC concluded that the facts mainly concerned the Portuguese territory, with residual evidence linking the alleged infringements to the Spanish territory. In this context, the CNMC decided not to initiate sanctioning proceedings, which in no way affects the outcome of the (still ongoing) proceedings before the AdC.

According to the resolution, the legal basis for not initiating proceedings is to be found in Regulation 1/2003 on the implementation of articles 101 and 102 TFEU. Thus, according to article 13 of the Regulation, “where competition authorities of two or more Member States have received a complaint or are acting on their own initiative under Article 81 [now 101] or Article 82 [now 102] of the Treaty against the same agreement, decision of an association or practice, the fact that one authority is dealing with the case shall be sufficient grounds for the others to suspend the proceedings before them or to reject the complaint.” The LDC contains a similar provision to prevent double sanctioning—or disparate decisions—by two competition authorities on the same infringement, which would be contrary to the ne bis in idem in the field of administrative sanctioning law.

Cooperation between the CNMC and the AdC

The cooperation between the CNMC and the AdC in file S/0007/22 is another example of the close relationship between both authorities since their first bilateral summit in 2004. They hold frequent meetings to share experiences and knowledge about the Spanish and Portuguese markets. The latest summit, which took place in Madrid in October 2022, focused on cartels, mergers, labor markets and digital markets. Both authorities agreed to reinforce their strategic cooperation.  Additionally, both Spain and Portugal have transposed the ECN+ Directive (see this post)—intended to harmonize articles 101 and 102 TFEU in the Member States, as well as to facilitate cooperation between national competition authorities through the European Competition Network (ECN).

In practice, this collaboration between the CNMC and the AdC has been reflected in different proceedings and actions, such as the parallel unannounced inspections that both authorities carried out in June 2021 at the headquarters of different companies located in their territories, dedicated to the commercialization of business database subscriptions.

In a context of increasingly interconnected markets, the CNMC has strengthened its international presence in recent years. Since 2019, it has signed bilateral memorandums of understanding with the competition authorities of Morocco, Italy, Paraguay and Mexico. It has also increased its participation in both the ECN and the International Competition Network (ICN), which brings together the national competition authorities of more than 120 countries and some supranational institutions. 

November 22, 2023