Royal Decree-Law 5/2023 has amended Spanish Law 15/2007, of July 3, for the Defense of Competition (LDC). Some of these amendments were pending from previous reforms, particularly upon the transposition of the ECN+ Directive, as explained in this post.
Leaving aside the suitability of the legislative instrument used to reform the LDC, the modifications are mainly procedural. Other more substantive amendments—and at least as relevant—have been left out of this reform.
These are the main changes:
- Modification of certain terms in proceedings before the National Commission for Markets and Competition (Comisión Nacional de los Mercados y la Competencia, or CNMC). Specifically:
- The term for submitting allegations to the statement of objections and the proposal for a decision in sanctioning procedures has been extended from 15 days to 1 month.
Likewise, the time limit for issuing a decision is extended from 18 to 24 months after initiation of proceedings.
- Regarding merger control:
- There is a maximum period for issuing a decision concerning transactions notified by means of a short form is of 15 days, provided that a confidential draft notification form has been submitted to the Directorate for Competition of the CNMC.
- While the maximum period for deciding concentrations in Phase I remains one month from receipt of a complete notification, the term for decisions in Phase II has been extended from two to three months.
- Decisions on consultations concerning mergers under article 55(2) of the LDC must now be issued within one month from reception.
- Regulation of the CNMC’s cooperation with the European Commission and other national competition authorities (“NCAs”): both in sanctioning procedures (e.g., support and assistance in home inspections; notification of agreements, decisions and other documents in the name and on behalf of other NCAs) and in merger control (e.g., exchanges of information).
The new wording of article 18 of the Spanish Competition Act incorporates the powers of the CNMC in relation to Regulation (EU) 2022/1925 of the European Parliament and of the Council of 14 September 2022 on contestable and fair markets in the digital sector (Digital Markets Act). It also governs coordination with the European Commission and other NCAs.
Equally remarkable is that RD-L 5/2023 did not include significant amendments proposed in previous initiatives, such as the transposition of the ECN+ Directive and the Draft Bill establishing the Independent Administrative Authority for Financial Consumer Protection (the processing of which was suspended due to the call for general elections on July 23 and the consequent dissolution of the Spanish Parliament). In particular, this reform has left out the following proposed amendments:
- The much-awaited introduction of the settlement procedure, in line with the practice of the European Commission. Under this procedure, investigated companies that accept their responsibility benefit from fine reductions (10% in the case of the European Commission, which could reach 10%-15% under the proposed reform of the Spanish Competition Act).
The settlement procedure is attractive mainly for competition authorities, allowing for quicker processing of cases while requiring less time and resources. At the same time, since the companies accept their responsibility for the facts in exchange for a reduction of the fine, litigation following resolution is significantly reduced.
- An increase from €60,000 to €400,000 of the maximum fine for individuals with representative or managerial positions in the companies concerned that were involved in the infringing conduct.
Moreover, where it is not possible to determine the turnover of the offending company in the year prior to the imposition of the fine, the Financial Consumer Protection Bill increased the maximum amounts depending on the seriousness of the infringement:
- Up to €1 million for minor infringements.
- Up to €10 million for serious infringements.
- Up to €50 million for very serious infringements.
Given the relevance of these amendments, especially from the CNMC’s perspective, it is likely that they are incorporated into the LDC in the next parliamentary term.