CNMC fines consulting firms with €6.3 million and grants reduction for the adoption of a compliance programme

Apart from the fact that some of the world-known consulting firms –such as Deloitte, KPMG or PwC– were involved in the cartel, this is a milestone decision because it is the first time that the CNMC has reduced the fine imposed on a cartelist because it implemented a competition law compliance programme.
In addition, this cartelist was not made subject to the prohibition to enter into contracts with the Public Administration.

1. The sanctioned anticompetitive conducts

According to the CNMC, the sanctioned firms were organised into two collaborative networks (in the North of Spain and at a national level), which led to the constitution of two different cartels.

The companies exchanged sensitive commercial information and coordinated their strategy to avoid competition when they participated in tenders to provide Spanish public entities with consulting services.

In particular, the companies engaged in cover bidding, affecting at least 200 procurement contracts. When one of the firms was invited to submit a bid in a tender, it regularly contacted other participating firms and asked them to submit a losing bid or simply not to participate in the tender.

As a result, the prices paid by the public entities for consulting services increased, the incentive to improve the service offered by the companies was limited, and the participation in the tenders of companies outside the cartels was hindered.

2. The compliance measures adopted by the companies

In June 2020, the CNMC published its Antitrust Compliance Programmes Guidelines (Compliance Guidelines), with the purpose of assisting companies in Spain in their efforts to develop and implement compliance programmes.

The Compliance Guidelines provide the basic criteria that the CNMC deems relevant for compliance programmes to be effective. They also establish several incentives to encourage the adoption of effective compliance measures, such as the reduction of fines –or even the exoneration in some specific situations– and the exclusion from the prohibition to enter into contracts with the Public Administration.

This case is the first time the CNMC applied its Compliance Guidelines, as the CNMC granted one of the companies –Indra– a 10% fine reduction for the adoption of effective compliance measures, both before and during the infringement proceedings.

In particular, before the initiation of the infringement proceedings, Indra had adopted a code of conduct that included a specific chapter on competition rules. The company had also offered competition law training sessions adapted to its activities addressed to its employees.

In October 2019, during the infringement proceedings, Indra adopted a competition law compliance programme that included methodology, prevention and risk analysis, a reference to the leniency programme, a protocol for action before the CNMC or any competition authority in case of possible infringement detection, as well as the possibility for the company to sanction those employees not assisting to the obligatory training sessions.

The CNMC highlights in its decision that the company acknowledged the facts and provided additional evidence on its participation in the infringement by conducting an internal investigation that resulted in the dismissal of the executives that contravened the compliance programme and that were involved in the anticompetitive conduct.

According to the CNMC, the compliance measures show Indra’s willingness to comply with competition rules, and given the company’s cooperation during the infringement proceedings, granted a 10% fine reduction under Article 64.3 LDC and the Compliance Guidelines. Most noticeably, the CNMC excluded Indra from the prohibition to contract with the Public Administration.

The CNMC also assessed the compliance measures presented by KPMG and Deloitte. However, these compliance programmes were deemed neither specific to competition rules nor effective to implement a compliance culture in those companies. Consequently, these companies did not obtain any fine reduction.
According to the CNMC, on the one hand, KPMG and Deloitte did not have efficient ex-ante measures that resulted in being capable to identify anticompetitive conduct nor an adequate collaboration with the CNMC during the investigation. On the other hand, the companies did not implement appropriate measures to avoid future infringements of competition rules; nor did they acknowledge the facts nor submitted additional evidence.

3. Conclusion: a significant boost for Competition law compliance programmes in Spain?

Although this is the first time that the CNMC has acknowledged the relevance of compliance programmes for the reduction of fines, it should be noted that Indra had adopted compliance measures both prior and during the infringement proceedings; and that it acknowledged the facts and provided additional evidence than that already in the possession of the CNMC.

In fact, other companies that have not accepted responsibility for the conducts under investigation and have claimed to have made changes to their compliance programmes have not received any reduction of fines and have not been excluded from the prohibition to contract with the Public Administration.

It remains to be seen whether the CNMC will reward the implementation of ex post compliance measures only if the companies admit their participation in the infringements, or whether it will also value the adoption of effective compliance measures without the companies’ active collaboration during the infringement proceedings.

In any case, the CNMC will have the opportunity to further clarify its view on this matter, since companies may see this decision as an encouragement for the adoption of competition law compliance programmes in search of fine reductions.

For more information contact Candela Sotés.