1 Legal and enforcement framework

1.1 Which legislative and regulatory provisions apply to cartels in your jurisdiction?

The Spanish cartel regime is regulated by Law 15/2007 on the Defence of Competition (‘Competition Act'). The Regulation on the Defence of Competition, implemented by means of Royal Decree 261/2008, is also relevant, as it further develops some of the provisions of the Competition Act.

Moreover, Act 3/2013 on the creation of the National Markets and Competition Commission should be noted, in order to understand the functioning and limits of the National Markets and Competition Commission (CNMC).

In addition, the Civil Procedure Act (1/2000) contains provisions intended to favour evidence disclosure in claims for damages derived from infringements of competition law, implementing the EU Damages Directive (2014/104).

Finally, the CNMC has also adopted communications and guidelines (soft law) to help undertakings to assess certain issues connected to the Spanish cartel regime (eg, the Communication on Leniency Programme and the Provisional indications on the determination of sanctions under Articles 1, 2 and 3 of the Spanish Competition Act and Articles 101 and 102 of the Treaty on the Functioning of the European Union.

1.2 Do any special regimes apply to cartels in specific sectors?

There are no special cartel regimes for specific sectors. The Spanish cartel regime applies to any cartel conduct taking place outside or inside Spain which affects or may affect all or part of the Spanish market.

1.3 Which authorities are responsible for enforcing the cartel legislation?

The relevant authorities are the CNMC, the regional competition authorities and the commercial courts.

Established in 2013, the CNMC is a public law entity with its own legal personality and full public and private capacity. It is attached to the Ministry of Economy, but carries out its activity with organic and functional autonomy, and with full independence from other public administrations.

The CNMC comprises a council and four investigation directorates:

  • the Competition Directorate;
  • the Telecommunications and Audio-visual Sector Directorate;
  • the Energy Directorate; and
  • the Transport and Postal Sector Directorate.

Both the Council and the Competition Directorate deal with cartel proceedings. The former is the decision-making body, while the latter is in charge of conducting investigations. This structure guarantees a functional separation between the handler and the decision maker. Pursuant to the Competition Act, the Council is responsible for issuing decisions and imposing penalties in competition proceedings, including in relation to cartels.

The regional competition authorities, which are also public law institutions, are the relevant authorities to investigate, resolve and impose penalties with regard to cartels whose effects do not exceed the territory of a Spanish region.

The Spanish commercial courts are also entitled to declare the existence of a cartel in private actions as a precondition to award damages in standalone cases (not frequent).

1.4 How active are the enforcement authorities in investigating and taking action against cartels in your jurisdiction? What are the statistics regarding past and ongoing cartel investigations? What key decisions have the enforcement authorities adopted most recently?

In Spain, cartel investigations feature in the priorities of the CNMC. Since 2015, the CNMC has dismantled more than 30 cartels affecting different markets and sectors. In 2019 the CNMC imposed total fines of €471 million – more than double the figure for 2018 (€222 million).

The largest fine issued by the CNMC in 2019 was €118 million (the third largest in the history of the CNMC), imposed on 15 companies for allegedly constituting a triple cartel to rig more than 200 bids in relation to railway infrastructure. In a cartel with similar characteristics that same year, the CNMC imposed a fine of €54 million on 19 industrial maintenance companies. In both cases the CNMC exercised for the first time its power to prohibit the infringers from contracting with the administration.

Another highlight in 2019 was the fine of €80.6 million imposed on eight companies in the dairy industry for allegedly entering into a buying cartel as regards dairy farmers.

Regarding the relationship between the CNMC and the Spanish courts, from 1 January 2019 to 31 December 2019 the National Court annulled five CNMC decisions and confirmed three. On the other hand, the Supreme Court annulled eight CNMC decisions and confirmed eight. Most of the reversals were due to the CNMC's previous method of calculating fines (which was annulled by the Supreme Court in 2015). Since 2015, the CNMC has applied a new legal method, which is explained in the guidelines issued by the CNMC in October 2018.

2 Definitions and scope of application

2.1 How is a ‘cartel' defined in the cartel legislation?

Under the Additional Provision 4 of the Competition Act, a ‘cartel' refers to any agreement or concerted practice between two or more competitors with the aim of coordinating their conduct in the market or influencing competition by means of the following practices:

  • fixing or coordinating prices or other trading conditions;
  • allocating production or sales quotas;
  • allocating markets or customers, including bid rigging;
  • restricting imports or exports; or
  • taking any anti-competitive actions against competitors.

Under this definition, a ‘cartel' need not be secret in order to qualify as such.

2.2 What specific offences are defined in the cartel legislation?

See question 2.1.

2.3 Is liability under the cartel legislation civil, criminal or both?

The cartel legislation subjects both companies and individuals to civil liability.

Although these provisions have not yet been applied, the Criminal Code lays down criminal liability for individuals and companies that conduct specific anti-competitive practices, such as:

  • bid rigging in public tenders;
  • the removal of essential goods from the market in order to cause shortages, distort prices or seriously harm consumers; or
  • measures to distort prices resulting from free competition by means of violence, threat or deceit.

2.4 Can both individuals and companies be prosecuted under the cartel legislation?

Yes.

2.5 Can foreign companies be prosecuted under the cartel legislation?

Yes. If the anti-competitive conduct carried out by the foreign company produces actual or potential effects in Spain, the foreign company may be prosecuted under the Spanish cartel legislation.

In addition, Article 101 of the Treaty on the Functioning of the European Union (TFEU) will be concurrently applicable if it is considered that trade between EU member states is potentially affected.

2.6 Does the cartel legislation have extraterritorial reach?

Yes. Where the anti-competitive conduct might potentially affect trade between EU member states (in addition to Spain), the National Markets and Competition Commission (CNMC) is entitled to apply Article 101 TFEU.

Furthermore, the CNMC can collaborate with other competition authorities to pursue competition infringements that take place in other jurisdictions.

2.7 What is the statute of limitations to prosecute cartel offences in your jurisdiction?

Pursuant to Article 68 of the Competition Act, and given that cartels in Spain are considered a very serious infringement, the limitation period to prosecute a cartel offence is four years from the date on which the infringement was committed or ceased (in the case of continuous infringement).

3 Investigations – general

3.1 On what grounds may the enforcement authorities commence an investigation?

Investigation proceedings are initiated by the Competition Directorate of the Spanish Competition Authority (CNMC) (or the equivalent regional body in cases affecting its jurisdiction) ex officio, by means of non-binding complaint from a third party or following a leniency application (see question 5).

Before the formal opening of the proceedings, the Competition Directorate will carry out a preliminary investigation in order to determine whether there are sufficient indicia that an infringement has occurred. During this preliminary phase, which is unlimited in duration, the Competition Directorate may carry out unannounced inspections (so-called ‘dawn raids') and gather information by issuing information requests.

If the Competition Directorate considers that there is reasonable evidence of prohibited conduct, it will formally initiate penalty proceedings. This decision will be notified to the interested parties.

3.2 What investigatory powers do the enforcement authorities have in conducting their investigation?

According to Act 3/2013 on the creation of the CNMC, the CNMC may carry out unannounced inspections and issue information requests.

With regard to inspections, the CNMC may conduct as many inspections as necessary at the premises of companies and associations of companies. The CNMC may also carry out unannounced inspections at the homes of directors, managers and other members of staff of the companies and associations concerned. CNMC officials are empowered to:

  • access any premises, facilities, land or means of transport belonging to companies and associations of companies, and the private residences of entrepreneurs, directors and other members of company staff;
  • check the books, registers and other documents relating to the activity in question, regardless of format;
  • make or obtain copies or extracts (in any format) of such books or documents;
  • retain such books or documents for a maximum period of 10 days;
  • seal all premises, books or documents and other company property for the time and to the extent necessary for the inspection; and
  • ask any representatives or members of staff at the company or association of companies for explanations regarding acts or documents relating to the scope and purpose of the inspection and to record their answer.

In addition, the CNMC is empowered to require any natural or legal person, as well as the public administration, to provide in a timely manner all data and information that might be necessary in order to detect a cartel.

3.3 To what extent may the enforcement authorities cooperate with their counterparts in other jurisdictions during their investigation? How common is such cooperation in practice?

The CNMC cooperates with the European Commission and national competition authorities from EU member states through the European Competition Network. In this regard, the CNMC may exchange any information (including confidential information) with any other national competition authorities within the European Union, as well as with the European Commission. This cooperation often takes place where Articles 101 and 102 of the Treaty on the Functioning of the European Union are applicable.

3.4 Is there an opportunity for third parties to participate in the investigation?

Yes. Third parties may request the CNMC to be considered as interested parties in a proceeding. Once they are considered as interested parties, they can access the case file and participate in the penalty proceedings, provide evidence and file written submissions.

3.5 What are the general rights and obligations of the enforcement authorities during the investigation?

According to Act 3/2013 on the creation of the CNMC, the CNMC may carry out unannounced inspections and issue information requests.

Based on the requirement to respect fundamental rights in conducting CNMC inspections, the legal understanding is that the inspection cannot extend to documentation or information (to be used only for the purposes set forth in the Competition Act) that:

  • is outside the objective scope of the inspection as defined in the order or court order authorising entry to the company premises or other properties belonging to the company, or to the premises of any company members, where necessary (so-called ‘fishing expeditions'). By way of example, information or documentation relating to the company's activities in sectors other than those included in the order or court order authorising the inspection are considered to be outside the objective scope;
  • is employee information of a personal nature; or
  • is protected by attorney-client privilege. The protection of professional secrecy in attorney-client relations does not apply where an employment relationship exists between the counsel and the company under investigation (ie, in-house counsel).

In order to conduct an unannounced inspection, the CNMC needs the express prior consent of the affected company or, failing, that, appropriate judicial authorisation. In addition, CNMC officials must inform the undertaking whether a court order authorising entry has been denied. At the end of the unannounced inspection, the CNMC officials must draw up a report on their actions.

Requests for information must be reasoned and proportionate to the aim pursued. To that end, the content of such requests must be detailed, specifying, in a reasoned manner, the relevance of the information requested and the use to be made of such information.

Information obtained by the CNMC that is of a confidential nature may be transferred only to the competent ministry, the autonomous communities, the European Commission and the authorities of other EU member states, as well as to the courts in the corresponding legal proceedings. Likewise, anyone who learns of this information must keep it confidential.

Finally, the CNMC must oversee compliance with the obligations provided for in the Competition Act.

3.6 What are the general rights and obligations of the target company during the investigation?

As regards inspections, it is up to the company – at the time of the dawn raid or thereafter – to highlight the specific documents that it considers may fall under any exceptions and explain why the CNMC cannot obtain such documents.

Companies and associations of companies must allow inspections authorised by the Competition Directorate or any other competent body. Company employees and representatives must respond to questions asked by CNMC officials, as long as they are within the scope of the dawn raid and would not result in self-incriminating answers.

In this regard, as well as in the event of a request for information, all natural or legal persons and the bodies of any public administrations are subject to a duty to cooperate with the CNMC and to provide, at its request and in due time, all data and information that they may have which may be necessary for the detection of cartels.

Failure to cooperate is considered a minor infringement of the Competition Act that may be penalised by a fine of up to 1% of the total turnover of the entity concerned.

Employees who are aware of the unannounced inspection should not discuss it with anyone outside the investigated entity (and especially not with clients, suppliers or competitors).

3.7 What principles of attorney-client privilege apply during a cartel investigation?

Although EU case law does not apply to investigations which are subject to Spanish law, both the CNMC and the Spanish courts tend to apply this case law in relation to inspections and consider that in-house legal advice is not covered by legal professional privilege. This is not the case for the advice of external counsel, which is protected under legal privilege based on the right to a defence and assistance by a lawyer under Article 24.2 of the Constitution.

3.8 Are details of the investigation publicly announced? If so, what principles of confidentiality apply?

The CNMC will publish the following information on its website:

  • details of its unannounced inspections, keeping confidential the identities of the investigated entities;
  • the formal commencement of penalty proceedings identifying the affected companies; and
  • its final decision in the penalty proceedings, once the interested parties have been notified and any confidentiality issues have been resolved.

Before publishing the above information, the CNMC will provide the entities concerned with an opportunity to identify any sensitive commercial information that may qualify as confidential and will then decide on this request. If the CNMC does not grant the confidentiality request, the entities concerned may appeal the decision before the National Court.

All leniency applications and their contents will be kept confidential in a separate file until the statement of objections is issued. Moreover, the public version of the final decision on the penalty proceedings will not refer to the statements submitted by the leniency applicants.

4 Investigations – step by step

4.1 What initial steps do the enforcement authorities take to commence a cartel investigation?

Before the formal commencement of the proceedings, the Competition Directorate of the National Markets and Competition Commission (CNMC) will carry out a preliminary investigation in order to determine whether there are sufficient indications that an infringement has occurred. During this preliminary phase, which is unlimited in duration, the Competition Directorate may carry out dawn raids and gather information by issuing information requests.

If the Competition Directorate considers that there is reasonable evidence of prohibited conduct (eg, a cartel), it will formally initiate penalty proceedings. This decision will be notified to the interested parties.

4.2 Are dawn raids commonly conducted in your jurisdiction? If so, what are the pre-conditions for conducting a dawn raid? When, where and by whom are they conducted? Do the enforcement authorities have the power to search private as well as company premises?

Dawn raids are commonly conducted in Spain. In this regard, since 2017 the CNMC has carried out 25 dawn raids concerning different markets. Some of the regional competition authorities in Spain are also empowered to conduct dawn raids in their specific regions.

The CNMC may conduct at any time as many inspections as are required to ensure the proper application of the Competition Act. Dawn raids can take place at companies and associations of companies, and at the homes of directors, managers and other members of staff. In order to conduct a dawn raid, the CNMC usually takes into consideration:

  • complaints by competitors, public bodies or third parties;
  • sectoral news or reports from private or public entities;
  • information gathered by regional authorities; and
  • leniency applications submitted by competitors.

Dawn raids will be conducted by designated CNMC officials, who are empowered, among other things, to access any premises, facilities, land or means of transport belonging to the investigated companies and associations of companies, and the private residences of entrepreneurs, directors and other members of staff.

The exercise of powers relating to the entry and sealing of premises, books and documents requires the prior consent of the person concerned or, failing that, a corresponding judicial authorisation. In this regard, undertakings and associations of undertakings must submit to inspections authorised by the competent competition authority. If the undertaking or association of undertakings opposes an inspection, or if there is a risk of such opposition, the CNMC may seek judicial authorisation for the inspection where this would lead to a restriction of fundamental rights. The Administrative Court must decide on the application within 48 hours.

4.3 What powers do officers have during the dawn raid? Are there any limitations on these powers?

CNMC officials are empowered to:

  • access any premises, facilities, land or means of transport belonging to companies and associations of companies, and the private residences of entrepreneurs, directors and other members of company staff;
  • check the books, registers and other documents relating to the activity in question, regardless of format;
  • make or obtain copies or extracts (in any format) of such books or documents;
  • retain such books or documents for a maximum period of 10 days;
  • seal all premises, books or documents and other company property for the time and to the extent necessary for the inspection; and
  • ask any representative or member of staff at the company or association of companies for explanations on acts or documents relating to the aim and purpose of the inspection and record their answers.

Those officials cannot access documentation or information that:

  • is outside the objective scope of the inspection, as defined in the order or court order authorising entry to the premises or other properties belonging to the company or any of the company's members, where necessary (so-called ‘fishing expeditions');
  • is of a personal nature to employees; or
  • is protected by attorney-client privilege (this does not apply to documentation prepared by in-house counsel).

In order to conduct an unannounced inspection, the CNMC needs the express prior consent of the entity concerned or, failing that, the appropriate judicial authorisation.

4.4 What are the rights and obligations of the target company and any individuals targeted during a dawn raid?

Companies and associations of companies must allow inspections authorised by the Competition Directorate or any other competent body. Employees and representatives must respond to questions asked by CNMC officials, provided that they are within the scope of the dawn raid and will not result in self-incriminating answers.

In this regard, all natural or legal persons and bodies of any public administrations are subject to a duty to collaborate with the CNMC, and must provide all data and information that may be necessary for the identification of cartels.

Failure to cooperate is considered a minor infringement of the Competition Act and may be penalised by a fine up to 1% of the total turnover of the undertaking concerned.

Employees who are aware of the unannounced inspection should not discuss it with anyone outside the investigated entity (and especially not with clients, suppliers or competitors).

4.5 What evidence can be seized during a dawn raid? Do the enforcement authorities have the power to interview witnesses and take statements during a dawn raid?

Based on the requirement to respect fundamental rights that may be affected by the CNMC's dawn raids, the legal understanding is that during a dawn raid, CNMC officials cannot access documentation or information (to be used only for the purposes set forth in the Competition Act) that:

  • is outside the objective scope of the inspection as defined in the order or court order authorising entry into the company premises or other properties belonging to the company or to the premises of any company members, where necessary (so-called ‘fishing expeditions'). By way of example, information or documentation relating to the company's activities in sectors other than those included in the order or order authorising the inspection are considered to be outside of the objective scope;
  • is employee information of a personal nature; or
  • is protected by attorney-client privilege. The protection of professional secrecy in attorney-client relations does not apply where an employment relationship exists between the counsel and the company under investigation (ie, in-house counsel).

However, under certain circumstances, the seizure of documents outside the scope of an inspection order (as long as this is not generic or vague) may be used to initiate a new investigation proceeding, under the ‘casual finding' doctrine. According to this doctrine, the seizure must meet the following requirements:

  • The entry and search must be duly authorised by the inspection order (if there is consent) or by a corresponding court order;
  • The search and seizure of the documents must be carried out in a manner that is appropriate and proportionate to the purpose of the entry and investigation, as set out in the inspection order or court order (‘fishing expeditions' are not allowed);
  • The material obtained must be indicative of a competition infringement; and
  • The procedure followed after obtaining the indicative material must be adequate.

Employees and representatives of the entities concerned must respond to questions asked by the CNMC officials, provided that the questions are within the scope of the dawn raid and would not result in self-incriminating answers. At the end of the dawn raid, the CNMC officials must draw up a report on their actions and the questions asked.

4.6 How can a company best prepare itself for dawn raids? What best practices should it follow in the event of a dawn raid?

In order to prepare for dawn raids, companies should list the specific documents that they consider should fall under any of the exceptions and outline the specific reasons why the CNMC cannot access them. The implementation of competition law compliance programmes, protocols in cases of dawn raids and training of company employees is also highly recommended.

Best practices in the event of a dawn raid include the following:

  • Do not be hostile towards the inspectors or obstruct the investigation.
  • Cooperate at all times.
  • Do not do anything that could compromise the company.
  • Follow the inspectors at all times.
  • Keep a record of all documents and everything that happens.
  • Seek immediate specialist legal advice in case of doubt.

4.7 What are the next steps in the cartel investigation following a dawn raid? What timeframe do these typically follow?

If the Competition Directorate of the CNMC considers that there is reasonable evidence of prohibited conduct, it will formally initiate penalty proceedings. It then has 18 months within which to issue a final decision.

During the first phase of the proceedings, the Competition Directorate will carry out all investigations necessary to clarify the facts and establish liability. This phase usually takes up to 12 months.

During this first phase, interested parties can respond within 15 working days to the findings of the Competition Directorate in the statement of objections and the decision proposal. The Competition Directorate will then refer the case to the Council of the CNMC.

In the second phase, the Council will resolve the penalty proceedings, taking into consideration the decision proposal and the arguments submitted by the interested parties. In addition, the Council may decide to hold a hearing on the proposal of the interested parties. Normally, the Council has six months to resolve the case. If it considers that Article 101 of the Treaty on the Functioning of the European Union is applicable, it will inform the European Commission (it usually stops the clock for one month during this consultation).

At the end of the second phase, the Council will issue either an infringement decision or a decision that there is no evidence of infringement.

4.8 What factors will the enforcement authorities consider in assessing whether cartel activity has taken place?

The prohibition in Article 1 of the Competition Act requires that the following conditions be met in relation to the definition of a ‘cartel' under Additional Provision 4 of the Competition Act:

  • An agreement exists;
  • The agreement is between at least two competitors; and
  • The agreement has as its object, or produces or is likely to produce, a restriction of competition on the market.

These are the factors that the CNMC will consider in assessing whether a cartel exists.

4.9 In case of a finding of cartel activity, can the company seek to negotiate a settlement, plea bargain or similar resolution? If so, what is the process for doing so?

In Spain, the Guidelines on Termination by Commitments of Penalty Proceedings provides that, as a general rule, a settlement will not be initiated when the alleged infringement is a cartel.

5 Leniency

5.1 Is a leniency programme in place in your jurisdiction? If so, how does this function?

Yes, the existence of a leniency programme is reflected in both the Competition Act and the Regulation on the Defence of Competition. In addition, in 2013 the National Markets and Competition Commission (CNMC) published its Communication on the Leniency Programme, which set out guidelines relating to the submission of a leniency application for companies and individuals.

According to the leniency programme, the CNMC must grant an exemption from fines to a company or an individual that participates in a cartel if:

  • it is the first to provide evidence of a cartel which enables the CNMC to order an inspection; or
  • it is the first to provide evidence which enables the CNMC to prove an infringement of Article 1 of the Competition Act concerning cartels, provided that the CNMC does not already have sufficient evidence to find an infringement and an exemption has not been granted to a company or individual pursuant to the first point above.

Any application for leniency (exemption or reduction of a fine) may be submitted either:

  • in writing, addressed to the Sub-Directorate for Cartels and Leniency of the CNMC or through the Electronic Register of the CNMC; or
  • through an oral statement, by arranging a meeting at the CNMC headquarters.

Applications are assessed on a chronological basis, according to their exact time of registration.

5.2 What are the benefits of applying for leniency, both for the first mover and for subsequent applicants?

If the first applicant complies with all requirements set out in the Competition Act, it will qualify for immunity. Those that chronologically cannot qualify for immunity, but that fulfil the necessary conditions, may request a fine reduction. The extent of this reduction will be calculated according to the following rules:

  • The first company or individual may benefit from a reduction of between 30% and 50%;
  • The second company or individual may benefit from a reduction of between 20% and 30%; and
  • Subsequent companies or individuals may benefit from a reduction of up to 20%.

5.3 What steps does a leniency application involve? What timeframe do these typically follow?

Leniency applications can be submitted at any time. However, in order to apply for immunity, the application should be submitted before notification of the statement of objections, which is normally issued by the CNMC between eight and 10 months after the initiation of penalty proceedings. If immunity is not available, the applicant may request a fine reduction. The earlier the application is submitted, the greater the likelihood of a fine reduction.

In order to apply for leniency, the applicant must complete a template provided by the CNMC in Annex I of its Communication on the Leniency Programme (the submission may alternatively be made orally at the CNMC headquarters). This template includes information on the applicant and its participation in the cartel, details of the main characteristics of the cartel itself and evidence of the cartel that will allow the CNMC to prove its existence.

The CNMC will register the application, indicating the exact date and hour on which it was received. Upon receiving the application, the Sub-Directorate for Cartels and Leniency will review the contents and confirm whether immunity can be granted or, if not, whether the leniency applicant may benefit from a fine reduction.

Only the CNMC Council can confirm the grant of either immunity or a fine reduction once the penalty proceedings have ended, provided that the applicant has fulfilled all legal requirements.

5.4 What are the rights and obligations of the applicant during the leniency application and over the course of its cooperation with the enforcement authorities?

Once a leniency application has been submitted, the applicant has the following obligations set out in Articles 65 and 66 of the Competition Act in order to qualify for immunity or a fine reduction at the end of the penalty proceedings:

  • full, continuous and diligent cooperation with the CNMC throughout the investigation (duty to cooperate);
  • immediate cessation of participation in the infringement, unless the CNMC considers that participation is necessary to preserve the effectiveness of an investigation;
  • no destruction of evidence relating to the leniency application and no direct or indirect disclosure to third parties, other than competition authorities, of the submission of the leniency application or its content; and
  • where full immunity has been requested, no coercion of other undertakings to participate in the infringement.

All leniency applications are treated as confidential by the CNMC, including the identity of the applicant. The investigated entities will have access only to the leniency content deemed essential in order to reply to the statement of objections.

In addition, leniency applications are protected in terms of confidentiality in judicial circumstances – that is, in the event of a judicial review of the final decision of the CNMC or when dealing with civil actions for damages arising from cartels declared through penalty proceedings.

5.5 Is the leniency programme open to individuals? Can employees or former employees benefit from a leniency application filed by their employer? Do the authorities operate a programme for individual whistleblowers separate to the leniency programme?

In Spain, the leniency programme is the same for both companies and individuals.

In accordance with Articles 65 and 66 of the Competition Act, where immunity or fine reductions are granted to companies, these will also benefit legal representatives or members of the management body who may have participated in the cartel agreement or decision, provided that they have cooperated with the CNMC.

In this regard, where a company makes a request for leniency, it is up to that company to specify whether the request includes legal representatives or members of the management body and to identify them, where appropriate. No one is better placed than the company to identify legal representatives or managers who have participated in the cartel and who are working to provide the CNMC with the information and evidence necessary for the leniency application. Former legal representatives or members of the management body may also benefit from a leniency application where the company considers this appropriate.

The CNMC has had an online whistleblower mailbox since 2014, through which anyone can provide anonymous information on competition law infringements. As yet, however, there is no specific whistleblower protection regime.

5.6 Can leniency be denied or revoked? If so, on what grounds?

Yes. Pursuant to the Communication on the Leniency Programme, the CNMC can deny or revoke a leniency application in any of the following cases, among others:

  • The CNMC is not the competent competition authority to investigate the competition law infringement.
  • The leniency application was presented after the statement of objections was notified.
  • The presumed infringement cannot be sanctioned (eg, because it is time barred).
  • The applicant has not fulfilled its obligations throughout the penalty proceedings or has not provided the CNMC with sufficient information about the cartel.
  • The information provided by the applicant does not add value to the information already available to the CNMC.

6 Penalties and sanctions

6.1 What penalties may be imposed in criminal proceedings on companies? What penalties may be imposed on individuals?

Although these provisions have not yet been applied, the Spanish Criminal Code provides for criminal liability for individuals and companies that conduct specific anti-competitive practices, as follows:

  • Article 262 concerns bid rigging in auctions and public tenders and provides for penalties including:
    • imprisonment for between one and three years;
    • fines for one to two years; and
    • loss of licence for public bidding from three to five years.
  • Article 284 concerns price distortions which prevent free competition and provides for penalties including:
    • imprisonment for between six months and two years; and
    • fines for one to two years.
  • Article 281 concerns anti-competitive conduct consisting of the withdrawal of raw materials or essential goods from the market in order to limit supplies or distort prices, and provides for penalties including:
    • imprisonment for between one and five years; and
    • fines of one to two years.

6.2 What penalties may be imposed in civil proceedings on companies? What penalties may be imposed on individuals?

According to the Competition Act, cartels in Spain are considered a very serious infringement. Therefore, companies can face administrative fines of up to 10% of their total (worldwide) turnover in the year preceding the imposition of the fine. In relation to associations, unions or groupings of companies, the total turnover must be determined by considering the individual turnover of their members.

If it is not possible to calculate the turnover, a company that commits a very serious infringement may face a fine of more than €10 million.

In addition to fining the companies that are directly involved in a serious infringement relating to the distortion of competition, the CNMC can ban them from contracting with the public administration. The scope and duration of this prohibition will be determined by the National Markets and Competition Commission (CNMC) or the National Consultancy Board for Administrative Contracting. According to the Public Procurement Law (9/2017), this prohibition cannot exceed three years.

In relation to individuals who are subject to civil liability, the CNMC may impose fines of up to €60,000 on each legal representative of the company or member of the management bodies who has participated in the anti-competitive conduct.

6.3 How are penalties in cartel cases determined? In deciding on the applicable penalties, will the enforcement authorities consider penalties imposed in other jurisdictions?

The exact amount of the penalty to be imposed is calculated on the basis of the legal criteria set out in Article 64 of the Competition Act, as follows:

  • the size and features of the affected market;
  • the market share of the infringer(s);
  • the scope of the infringement;
  • the duration of the infringement;
  • the effects of the infringement on the rights and interests of consumers and other economic agents;
  • the illicit benefits obtained by the infringer(s); and
  • aggravating and/or mitigating circumstances.

In January 2015 the Supreme Court annulled the CNMC Fining Guidelines of 2009. In this regard, the Supreme Court ruled that 10% is the maximum percentage of the undertaking's turnover to be imposed for a very serious infringement. According to this ruling, the percentage is to be applied to the total turnover, comprising all sales made by the infringer (ie, the legal entity subject to the infringement proceedings and its consolidated subsidiaries and controlled entities, but not its parent companies) in the year before the decision was taken (including in markets and sectors unaffected by the infringement).

In 2018 the CNMC published a document that contains provisional indications on the determination of sanctions, which further clarifies the methodology it follows in setting fines.

6.4 Can a defendant company pay the legal costs incurred by and/or penalties imposed on its employees?

Yes, since there are no specific regulations on this matter.

7 Appeal

7.1 Can the defendant company appeal the enforcement authorities' decision? If so, which decisions of the authority can be appealed (eg, all decisions or just the final decision) and to which reviewing authority? What is the standard of review applied by the reviewing authority (eg, limited to errors of law or a full review of all facts and evidence)?

In Spain, during formal proceedings conducted by the National Markets and Competition Commission (CNMC), all decisions of the Competition Directorate that cause non-defensible or irreparable damage to rights or legitimate interests (eg, inspection orders) may be appealed to the Council within 10 days (administrative appeal) and subsequently to the National Court and the Supreme Court as the final instance.

Final decisions of the Council may be appealed to the National Court within two months of notification of the decision. The same applies for final decisions of the regional competition authorities, which may be appealed before the corresponding regional high court. In these proceedings, the courts will conduct a full review of all facts and evidence.

Finally, National Court and regional high court judgments may be appealed to the Supreme Court if there is a cassational interest. Such challenges are limited to points of law, unless factual findings are found to be clearly erroneous.

7.2 Can third parties appeal the enforcement authorities' decision, and if so, in what circumstances?

Pursuant to Article 19.1 of the Jurisdiction for Judicial Review Act (29/1998), any individual or entity has the right to be heard by the contentious administrative courts if it has a right or legitimate interest to be heard.

According to Spanish case law, a party has a ‘legitimate interest' if its claim could potentially result in a recognised position of legal advantage if the claim were to succeed. However, a mere interest in the defence of legality is not considered sufficient to be heard by the contentious administrative courts.

8 Private enforcement

8.1 Are private enforcement actions against cartels available in your jurisdiction? If so, where can they be brought?

Pursuant to Article 72 of the Competition Act, anyone that has suffered damage (whether directly or indirectly) due to a competition law infringement may seek full compensation before the commercial courts. This includes third parties and both direct and indirect purchasers.

8.2 Can private enforcement actions be brought against both companies and individuals?

Yes. Competition law infringers will be liable for damages. In this sense, the actions of a company are also attributable to its controlling entities or persons, except where the company's economic behaviour is not determined by such parties.

8.3 Are class actions or other forms of collective action available in your jurisdiction?

Spanish law provides for collective actions if an infringement has caused damage to a collective group of consumers or users. Article 11 of the Civil Procedure Act provides consumer associations with standing to bring actions in support of not only the interests of their associates, but also the general rights of all consumers. This may also apply to antitrust cases.

Moreover, a single claimant can represent the interests of multiple claimants in two different ways:

  • Multiple claimants can assign their damage claims (credit claims) to a third party, which can exercise those claims jointly; and
  • Rights holders can grant the representation of their interests to a third party.

It is also possible to join the claims of a number of plaintiffs under Articles 12 and 72 of the Civil Procedure Act if they have the same grounds or cause of action.

8.4 What process do private enforcement actions follow?

To commence either a standalone or follow-on action, it must first be demonstrated that an infringement of competition law has occurred. Moreover, the claimant must demonstrate that both:

  • it has suffered damages (which can be quantified); and
  • there is a causal link between the competition infringement and the damage.

Anyone that has suffered harm due to a competition law infringement has up to five years to seek full compensation for that harm in court. According to Article 74.2 of the Competition Act, this five-year limitation period begins to run once:

  • the anti-competitive conduct has ceased; and
  • the claimant learns or could have learned about:
    • the existence of the infringement;
    • the harm caused by such conduct; and
    • the identity of the infringer.

Damages claims may be commenced in the commercial courts in all cases.

Civil actions for damages may be brought before the commercial courts. Once the defendants have been notified, they should submit their statement of defence within 20 days. During the proceedings, both claimants and defendants are entitled to request disclosure of evidence (not all evidence is subject to disclosure). After a preliminary hearing, the oral hearing will take place within one month. Finally, a judgment will be issued, which may be appealed before the regional high court and the Supreme Court at final instance.

8.5 What types of relief may be sought and what types of relief are most commonly awarded? How is the relief awarded determined?

The Competition Act allows for full compensation to be sought for damages suffered due to competition law infringements. In this respect, the injured party is entitled to full compensation for the harm suffered – understood as restoration to the situation in which it would have been had the infringement not been committed. This compensation comprises the right to indemnification for actual loss and lost profits, plus interest. However, the right to full compensation should not be understood as a right to overcompensation, whether by means of punitive damages, multiple damages or other types of damages.

The right to be compensation includes only:

  • the overcharge effectively borne by the claimant, provided that this has not been passed on and has thus caused harm; and
  • lost profits suffered as a consequence of the total or partial passing-on of the overcharge.

As regards the grounds for the award of damages, the basic premise is that the burden of proving the harm suffered as a result of the infringement falls on the claimant. In this respect, claimants normally submit expert reports to prove the damages suffered. Cartels are presumed to cause damages in the absence of evidence to the contrary.

If the claimant can successfully demonstrate that it has suffered harm, but this harm is practically impossible or excessively difficult to quantify, the courts are empowered to estimate the damages.

8.6 Can the decision in a private enforcement action be appealed? If so, to which reviewing authority?

A judgment from a Spanish commercial court may be appealed before the regional high court, based on procedural grounds and/or the merits of the case.

However, the review conducted by the regional high court is limited to the same facts and legal considerations as in the commercial court proceedings. Therefore, the possibility to include additional facts or provide additional evidence is very limited.

The judgment of the regional high court may be further appealed to the Supreme Court only in specific circumstances, such as the following:

  • The regional high court committed a procedural infringement.
  • The judgment of the regional high court infringes the applicable rules. This is the case if one of the following applies:
    • The judgment was issued for the civil judicial protection of fundamental rights (except for the constitutional right to effective legal protection and defence);
    • The value of the action is above €600,000; or
    • The value of the action is below €600,000 or the proceedings were handled in consideration of the subject, but the appeal has cassational interest.

9 Trends and predictions

9.1 How would you describe the current cartel enforcement landscape and prevailing trends in your jurisdiction? Are any new developments anticipated in the next 12 months, including any proposed legislative reforms?

The National Markets and Competition Commission (CNMC) continues to maintain a strong anti-cartel policy. In this regard, the increased numbers of dawn raids conducted and penalty proceedings commenced, as well as the increased amounts of fines imposed, reflect intensified activity of the CNMC, which has placed cartels among its highest priorities.

Furthermore, after being forced by a Supreme Court ruling to correct its methodology for calculating fines, the CNMC is beginning to gain confidence in exercising its powers. It has strengthened its policy of imposing fines on individuals and recently imposed its first bans on contracting with the public administration, the scope of which is still unknown.

With regard to private enforcement, the considerable increase of damages actions is expected to continue, especially in relation to the paper envelope and truck cartels.

Several changes are anticipated in the year to come, to adapt the Spanish legislation to the ECN+ Directive. Among other things, it is expected that the CNMC will set priorities in applying the competition regulations and even shelve complaints that are not a priority to investigate without further consideration (something which is not currently possible in Spain). Other potential changes include increasing the maximum fines for individuals (currently set at €60,000) and introducing a settlement procedure for cartel cases similar to that of the European Commission.

10 Tips and traps

10.1 What would be your recommendations to companies faced with a cartel investigation and what potential pitfalls would you highlight?

In all cases relating to competition law, expert advice should be sought to prevent anti-competitive behaviour from occurring through measures such as the design and implementation of competition law compliance programmes, protocols in case of dawn raids and training for company employees in their business activities.

Once penalty proceedings have been initiated, there are many variables that can be addressed, which is why specialist advice is also highly recommended.

Acknowledgement: co-authored by Isaque Leite.

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.