ECN+ Directive (finally) transposed into Spanish law

Spanish regulation already included most of the provisions contained in the ECN+ Directive. However, this amendment brings significant changes to national competition rules, especially regarding the relationship of the Spanish Competition Authority (“CNMC”) with the European Competition Network (“ECN”); the upper fine limits that can be imposed as a consequence of anticompetitive infringements; CNMC’s investigation powers; the safeguards available for companies involved in infringement proceedings; and the leniency program. 

1. A closer relationship between NCAs

Among the elements transposed to the national legislation, particular attention should be drawn to the measures and instruments to promote mutual assistance within the ECN. 

Following the amendment of the LDC, the CNMC will be able, inter alia, to exchange broader information with the European Commission and other NCAs (e.g. leniency statements or information received in the context of merger control analysis) and to closely collaborate in investigations conducted outside their own territories (e.g. carrying out dawn raids and interviews on behalf of other NCAs).

In addition, the LDC establishes that the limitation period for competition infringements may be interrupted in case another NCA within the ECN is investigating the same facts as the CNMC.

2. A higher maximum amount of fines

The modification of the LDC has introduced a new scheme of fines which is stricter than before and with a higher dissuasive effect:

• Prior to the amendment of the national law, restrictive vertical agreements and non-qualified abusive conducts of a dominant position were considered serious infringements, subject to fines of up to 5% of the company’s worldwide turnover. They are, however, now treated as very serious infringements – such as restrictive horizontal agreements between competitors and qualified abusive practices – and they are all subject to fines of up to 10% of the turnover.
  
  
• On the other hand, infringements of companies’ duties to cooperate with the CNMC (e.g. to reply adequately to requests for information or not to obstruct an inspection) were previously considered minor infringements, subject to a fine of up to 1% of the company’s worldwide turnover.  Nevertheless, these types of infringements will now be classed as serious infringements, subject to a fine of up to 5% of the turnover. 
  
  
• In addition, regarding periodic penalty payments, the maximum daily fine of 12,000 euros is replaced by a daily penalty payment of up to 5% of the companies’ worldwide average daily turnover. 

3. Wide-ranging powers of investigation 

The powers of investigation of the CNMC will be increased as well. In particular, the LDC explicitly allows the CNMC to carry out dawn raids at the premises of any company or private residences, provided that there is reasonable suspicion that there may be relevant documentation related to the investigation. 

The CNMC may also access all necessary information regardless of where the information is stored, e.g. laptops, cell phones, other mobile devices or even in the cloud.

The LDC also introduces the possibility for the CNMC to interview representatives and staff of the companies under investigation, even outside the context of dawn raids. The interviews may be conducted with any legal or natural person that may have relevant information to the investigation. These interviews may be conducted at the CNMC’s facilities, at the company’s premises, or remotely. 

4.Strengthening of guarantees for companies under investigation

The LDC expressly declares that the EU Charter of Fundamental Rights and the general principles of EU law are to be guaranteed in Competition law proceedings: 

• Regarding dawn raids, the LDC refers to companies’ right to object to inspections carried out without judicial authorisation, as well as to the duty of CNMC’s inspectors to inform on the negative consequences of such a refusal. In addition, the CNMC may extend the scope of a dawn raid to other companies belonging to the same corporate group if there is a direct connection with the facts under investigation. 
  
  
• In relation to interviews, according to the LDC, the employees interviewed by CNMC’s inspectors have the right not to testify against themselves and to be assisted by a lawyer. 
  
  
• In the field of requests for information, the LDC recognises that the scope of the questions put by the competition authority should be proportionate, limited to the information accessible to the companies, and without forcing them to admit an infringement. 

5. The leniency program in Spain

The amendment of the LDC introduces several additional incentives for the companies applying for leniency in Spain as follows: 

• The immunity applicant will be excluded from the prohibition to enter into contracts with the Public Administration, while the applicant for a reduction of the fine may be exempted from such prohibition at the discretion of the CNMC.
  
  
• The confidentiality of leniency statements is reinforced. In this regard, although it was already established in the CNMC’s guidelines on the leniency program, now the LDC expressly regulates that access to leniency statements will only be granted to the parties under investigation for defence purposes or in judicial proceedings for the review of the administrative procedure.

6. Conclusions

Although this amendment has brought significant modifications to the LDC to reinforce the CNMC’s investigation and sanctioning powers, it is indeed more limited in scope than the draft of the preliminary amendment that was submitted to a public hearing last summer (available here – in Spanish). 

As a result, relevant modifications proposed in the draft have been left out, such as:

• Increasing the maximum limit of fines for infringing individuals from EUR 60,000 to 400,000; 
  
  
• Introducing a settlement procedure before the CNMC; or 
  
  
• Extending the time limits for infringing proceedings from 18 to 24 months. 

For more information please contact Candela Sotés.