Competing fairly - Spain
Market competition between businesses encourages innovation, competitiveness and better products and services for consumers.
Competition laws aim to establish a framework guaranteeing an adequate level of competition in the economy.
The authorities take steps to prevent businesses obtaining an unfair monopoly over a market, or carrying out acts or reaching agreements between them that may harm competition in the economy.
This explains why businesses must report certain acts or events to the competition authorities or obtain authorisation for these.
At European level, the European Commission is responsible for monitoring competition between business activities in the Community market. In Spain the National Competition Commission is responsible for ensuring competition at the national level.
The rules on competition in Spain incorporate the Community provisions in this area.
The Competition Law and its subsequent Regulation seek to safeguard and guarantee competition in the Spanish market.
Protection of competition
The Competition Law expressly prohibits a series of actions that are harmful to the exercise of free competition: collusive behaviour (anti-competitive agreements), abuse of dominant position, distortion of free competition by unfair acts, and establishment of an economic concentration without prior approval from the National Competition Commission.
The Competition Law prohibits 'any collective agreement, decision or recommendation or concerted or consciously parallel practice which has the purpose of producing or which may produce the effect of preventing, restricting or distorting competition in all or part of the domestic market'.
Specific examples of collusive behaviour include price fixing, market sharing or the application of dissimilar conditions to equivalent transactions, which place some competitors at a disadvantage in comparison to others.
Abuse of dominant position
The aforementioned Law also prohibits 'abuse by one or more undertakings of a dominant position in all or part of the domestic market'.
This abuse may consist in the imposition of unfair prices or trade terms, unjustified refusal to meet demands for the purchase of goods or services, etc.
Distortion of free competition by unfair acts
The Unfair Competition Law generally defines an unfair act as 'any behaviour that is objectively contrary to the requirements of good faith', citing, among others, deception, defamation, imitation, infringement of trade secrets and rules, and selling at a loss.
When, as a result of a merger, purchase or other permanent change of control of all or part of one or more undertakings, a new company is formed which holds a market share greater than or equal to 30% or whose turnover exceeds EUR 240 million, the merger or acquisition in question must be authorised by the National Competition Commission.
Strict rules therefore govern mergers .
Granting public aid is a form of intervention in the economy that can alter the operation of markets.
The National Competition Commission (Comisión Nacional de la Competencia – CNC) analyses state aid granted in Spain, issues reports in this respect and makes recommendations to public authorities in order to maintain effective market competition.
National competition authorities
The authority responsible for protecting competition in Spain is the National Competition Commission (CNC). This national public body ensures the consistent application of the Competition Law.
Under the aforementioned Law, the CNC’s duties include both the investigation and decision of all competition matters, as well as arbitration, consultancy and promotion of market competition.
The CNC also coordinates actions to protect competition with its counterparts in the Autonomous Communities, which can only deal with matters that do not go beyond the territory of their own Communities.
Strict provisions govern company mergers
Notification of concentrations
In Spain many administrative procedures can be easily and simply carried out online.
Economic concentrations sometimes require prior authorisation by the National Competition Commission (CNC).
Those involved must submit a notification form, together with the relevant documentation, to the CNC’s offices. Both a paper and an electronic copy must be submitted. The fees can be paid online, through the Commission's virtual office.
Reporting of infringements
Businesses wanting to report an infringement of Spanish and/or EU competition rules must contact the National Competition Commission and submit the corresponding complaint.
If the business is itself part of a cartel, it can report this and benefit from the ‘leniency programme ’, provided that it did not instigate the cartel and ends its involvement in the prohibited conduct. As a result, the business will benefit from a reduction in or even exemption from the relevant fine.
Competition and Europe
The National Competition Commission has a Practical guide for businesses on its website. This contains useful information on how to comply with and/or benefit from the principles of free competition, as well as what to do in case of irregularities.
Check also the legislation on this topic in: