The CNMC sets for the first time the terms of the exclusion from participation in public tenders

The Spanish National Markets and Competition Commission (CNMC) has sanctioned Eólica del Alfoz ("Alfoz") for an abuse of a dominant position and has imposed an exclusion from participation in public tenders, specifying for the first time in the decision itself both the scope and duration of the exclusion (S/0011/23, Eólica del Alfoz).

Context

This is the first case initiated and decided after the publication, on 13 June 2023, of Communication 1/2023, on criteria for determining the ban on public procurement on grounds of distortion of competition.

Thus, the case of Alfoz is the first practical application of the aforementioned criteria and allows us to draw some initial reflections of great relevance, both for companies and for public sector entities.

Alfoz, which had been appointed Single Point of Contact for Grid Connection (IUN) in 2015 for the Villimar 220 kV node, has been sanctioned for abuse of a dominant position, as it was found that the company hindered access to the connection point of the electricity transmission network for a competitor, while favouring access to a renewable installation of its own business group.

For this conduct, the CNMC imposes a fine of 958,593 euros on Alfoz and its parent company. In addition, Alfoz is excluded from participating in public tenders, in the following terms: "throughout the national territory, with respect to all public sector entities, for contracts for works, supplies and services related to the consultancy, construction, operation, exploitation and maintenance of wind farms and their equipment with a duration of 6 months".

Criteria applied by the CNMC

In terms of geographical scope, the CNMC extends the exclusion from public procurement to the entire national territory. To this end, the CNMC takes into account that, although the geographic market where the infringement was carried out is limited to the market for access to and connection to the electricity transmission network through the 220 kV Villimar junction, the conduct affected other related markets, such as electricity generation, which has a national dimension. In addition, the CNMC considers that access to the electricity transmission network is strategic for the functioning of the national electricity market.

With regard to the subject-matter scope of the exclusion, the CNMC extends it to the entire public sector, specifically covering contracts for works, supplies and services relating to the consultancy, construction, operation, exploitation and maintenance of wind farms and their equipment. The decision bases this assessment on the activities included in the corporate purpose of Alfoz.

Thirdly, the decision establishes that the exclusion from public procurement will be extended for six months, a duration that is justified considering that, despite being a very serious infringement, the infringing rate applied for the sanction was relatively low (3.5% out of a legal maximum of 10%), and the infringement did not have a direct effect on public procurement.

In this regard, the CNMC specifically noted the fact that the exclusion was not expected to have a disproportionate effect or negatively impact the market, given that Alfoz had not recently participated in public tenders.

Assessment

The exercise undertaken by the CNMC when defining the exclusion from public procurement is a highly complex analysis, as it is necessary to balance the deterrent effect of the exclusion with the requirements of the principle of proportionality and the risk that the exclusion itself restricts, or even eliminates, competition in the market. In this regard, we highlight the following aspects of the decision.

Firstly, this case exemplifies that, as already indicated in Communication 1/2023, exclusion from public procurement may be imposed in the event of serious or very serious infringements of Law 15/2007, on the Defence of Competition (Spanish Competition Act), even if such infringements do not consist of agreements between companies to distort competition, nor are they carried out in the field of public procurement. This is, in fact, the first decision on abuse of a dominant position in which the competition authority directly determines the scope and duration of the exclusion from participating in public tenders, the matter having been referred to the Advisory Board on Public Procurement in previous cases (see, for example, S/0005/21 - Booking).

Secondly, it should be noted that Communication 1/2023 already established that, in some cases, the subject-matter and/or geographical scope of the exclusion from public procurement could be either larger or smaller than the scope of the specific market that has been affected by the infringement. In this case, the CNMC decision justifies a national scope for the exclusion due to the strategic nature of the affected market, and the impact on other related markets that do have a national dimension.

In this regard, there are several decisions of regional competition authorities in Spain that have imposed an exclusion from public procurement with a significantly broader scope than that of the market affected by the infringing conduct, such as the decisions of the Catalan Competition Authority – ACCO (for example, no. 101/2018 - L9 / L10 Metro, no. 100/2018 - Aerobús and consequent no. 102/2019 – Aerobús 2) or the Galician Competition Commission (no. 5/2021 – Licitación Suministro USC). 

Thirdly, the CNMC has considered it proportionate that the exclusion covers the entire Spanish public sector. To this end, it relies on the recent judgment of the National Court (sentencia no. 4/2025, of 5 February 2025) issued in the case known as the "cártel del fuego" (fire cartel), in which the Criminal Chamber of the National Court imposed a general exclusion from participating in public tenders on several companies, in view of the national territorial scope of the criminal activity and to ensure an effective preventive effect. Reference is also made to the judgment of the High Court of Justice of Galicia, of 3 October 2022, which confirmed the exclusion from public procurement imposed by the Galician Competition Commission with a scope much greater than the affected market.

Ultimately, however, the ruling acknowledges that it "lacks specific references" for the determination of the "product scope" test, given that the market in which the effects of the infringement occur or are projected is not linked to government procurement. These difficulties in limiting the product market led the CNMC to establish a general scope ("with respect to all public sector entities") and to take into account the activities that constituted the corporate purpose of Alfoz, which are largely captured by the exclusion imposed.

On the other hand, the duration of the exclusion from public procurement imposed on Alfoz could be considered relatively moderate, especially in the light of the maximum limit of 3 years provided for by law and the decision-making practice of other regional competition authorities, such as the aforementioned ACCO (no. 108/2020 - Contractació pública de serveis d’organització d’esdeveniments, a case in which the debarment was imposed for twenty-four months) or ACREA, in Andalusia (S/08/2023 - Conservación Carreteras 1, with an exclusion of up to two years for one of the offending parties). The CNMC has based its assessment on the duration of the infringement (slightly more than two years), the seriousness of the infringement (due to its legal classification and the turnover affected), and the effect on public procurement, which has been considered very limited in this specific case.

Finally, it is important to note that, although the parent company of Alfoz is declared jointly and severally liable for the payment of the fine, it has not been included in the exclusion from public procurement, which refers only to Alfoz. On this point, it should be recalled that the Communication 1/2023 contemplates the possibility that the exclusion also extends to the parent companies of the infringing company, when the parent company or other companies in the group are actively involved and linked to the sanctioned conduct. In this specific case, despite the responsibility of the parent company in the conduct, and contrary to what was proposed by the investigating body, this possibility has not been applied.

In short, this recent decision of the CNMC highlights the growing importance of the exclusion from public procurement as a legal consequence derived from infringements of competition law in Spain. Without prejudice to the judicial proceedings still pending on this matter, it is to be expected that both the CNMC and the regional authorities will now determine the exact terms of the exclusion from public procurement in their decisions.

Finally, reference should be made to the key role played by the development of regulatory compliance programmes in the field of antitrust, and the adoption of effective "self-cleaning" measures, as legal mechanisms that make it possible to avoid or, where appropriate, lift the exclusion from public procurement imposed by the authorities, as shown in cases S/DC/0627/18 – Consultoras,  o S/0008/21 – Licitaciones material militar.