Fighting cartels within the Spanish Competition Law

Competition law in the European Union and competition law in the United States and the United Kingdom appear to have the same, or similar, objectives but are very diverse in the manner in which they deal with the law and issues that arise.  The differences arise in matters such as fighting cartels, which is more common than one may think.

The Spanish Competition Act 15/2007 (Ley de Defensa de la competencia or LDC) defines a cartel as a secret agreement between two or more competitors with the object of fixing prices, production or sales quotes, allocating markets, including bid rigging, or imposing import or export restrictions.

The EU law that controls fighting cartels is in Articles 101 and 102 of the Treaty on the Functioning of the European Union (TFEU). Article 101 does not allow companies to make anti-competitive agreements and Article 102 prohibits firms from abusing their dominant marketing position. The European Commission (EC) is the investigative body and has the power to impose fines once anticompetitive behaviour has been noticed, this power comes from Regulation 1/2003. Following the conclusion of a cartel investigation the EC may offer a settlement to the participants. As motivation to get the participants to reach an agreement more rapidly, the participants receive a 10% reduction in fines to avoid exorbitant litigation. Any decisions made by the Commission may be changed or rescinded by the General Court and the Court of Justice. Regarding damages, anti-competitive behaviour victims generally have the entitlement to claim the equivalent of the damage they have suffered.

Article 1 of the Competition Act 15/2007 regulates the fighting of cartels in Spain. Additionally, the Spanish competition authority also applies Article 101 of the TFEU to practically all cartel cases, since cartels operating in or affecting Spain usually also affect trade between the Member States. The competition authority in Spain is the National Commission for Markets and Competition (Comisión Nacional de los Mercados y la Competencia). The CNMC has the power to conduct surprise visits at any company’s premises or the homes of the employees. However, this is only acceptable when there is a well-founded reason to believe that documents or other evidence relating to the relevant cartel can be found at those premises. Regarding victim damage claims, Spanish legislation does not contain any particular provision regarding these sorts of actions.

In the United States, the aims are, as previously mentioned, the same as in the U.K. but how the issues are handled, and the bodies that handle them are different. The lead agency for cases is the Department of Justice, amongst which is the Grand Jury. The Grand Jury has the authority to compel both the production of documents and testimony. Similar to the EU, the US operates on a `leniency programme’ which encourages the reporting of anticompetitive conduct in exchange for immunity from fines or convictions. Contrary to EU law, anti-competitive behaviour victims can recover three times the amount of damages they have suffered, plus the lawyer’s fees.

The United States Authority and the European Community collaborate on competition policy cases that affect both jurisdictions. This collaboration is based on the 1998 Positive Comity Agreement and the 1991 Cooperation Agreement.

In the United Kingdom, although part of the European Union, it is the Competition Act of 1998 that governs the law on cartels and cartel prohibition. A part of this Act was modelled after Article 101 of the TFEU. This Act, just like the EU Articles, forbids agreements between undertakings, concerted practices and decisions by associations of undertakings that:

• Have as their object the prevention, restriction or distortion of competition within the UK.
• May affect trade within the UK.

Furthermore, the Competition Act states that as far and as much as possible it is to be interpreted consistently with the corresponding EU rules. Taking all of the above into account, European Law still takes precedence and the UK authorities are empowered to implement the entirety of Articles 101 and 102 of the TFEU.

Thus, the EU and the US seem to be rather similar in regards to fighting cartels, except for the Judicial bodies and the powers they possess, as well as the amount of damages that anti-competitive behaviours can claim.

Justine Matthys & Karl H. Lincke

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