In brief: cartel immunity and leniency programmes in Spain

Cooperating parties

Is there an immunity programme? If so, what are the basic elements of the programme? What is the importance of being ‘first in’ to cooperate?

A leniency programme is available to any undertaking or person who participates or has participated in a cartel affecting all or part of the Spanish market. The programme extends only to cartels and not to any other type of prohibited behaviour.

Full immunity is available for applicants that are the first to provide the competition authority with evidence that may enable the authority to prove the existence of a cartel or to provide sufficient legal grounds to carry out an unannounced inspection (article 65 of (Law No. 15/2007 of 3 July for the Defence of Competition (LDC))). Since the reform to the LDC enacted in 2021, the leniency applicant will also be exempt from the application of the ban on public contracting (article 65.4 of the LDC).

Subsequent applicants may benefit from a reduction of the fine where the evidence provides significant added value above the evidence already in the possession of the authority (article 66 of the LDC). The authority could also exempt subsequent applicants from the application of the ban on public contracting (article 66.4 of the LDC).

An application for immunity must include all information available and at least sufficient information to correctly identify the cartel and its participants. Subject to that, the authority will grant, upon a reasoned request by the applicant, a deadline for submitting additional evidence if the applicant does not have all the necessary information at the time of the application. Provided the evidence is submitted within the deadline, the date of submission of the application for exemption is deemed to be the date of the initial request.

To qualify for immunity, an applicant must:

• cooperate fully, continuously and diligently with the authority throughout the administrative investigation procedure;
• end its involvement in the infringement (unless the authority requests otherwise);
• not destroy evidence or disclose its intention to present a leniency application; and
• not have been the instigator in the creation of the cartel.

Besides immunity for fines in the administrative proceedings, leniency applicants also receive beneficial treatment in the framework of follow-on damage claims. Article 73.4 of the LDC states that immunity recipients are jointly and severally liable to their direct or indirect purchasers or suppliers, and other injured parties only if full compensation cannot be obtained from the other undertakings that were involved in the same infringement.

Is there a formal programme providing partial leniency for parties that cooperate after an immunity application has been made? If so, what are the basic elements of the programme? If not, to what extent can subsequent cooperating parties expect to receive favourable treatment?

The competition authority may reduce the amount of the fine corresponding to undertakings or natural persons that, without meeting the requirements to qualify for full exemption of the fine:

• provide evidence of the alleged infringement that represents significant added value concerning the evidence already in the possession of the competition authority;
• cooperate fully, continuously and diligently with the authority throughout the administrative investigation procedure;
• end their involvement in the infringement (unless the authority considers otherwise); and
• do not destroy evidence or disclose its intention to present such an application.

The authority may also exempt subsequent applicants from the application of the ban on public contracting (article 66.4 of the LDC).

How is the second cooperating party treated? Is there an ‘immunity plus’ or ‘amnesty plus’ treatment available? If so, how does it operate?

The level of reduction of the amount of the fine, provided that the applicant complies with the requirements of article 66 of the LDC, depends on the order in which the applications are received and the amount of value-added evidence provided, calculated in line with the following:

• the first undertaking or individual that fulfils the legal requirements by providing value-added evidence may benefit from a reduction of between 30 per cent and 50 per cent depending on the amount of value that was added;
• the second undertaking or individual that fulfils the legal requirements may benefit from a reduction of between 20 per cent and 30 per cent, again depending on the value that was added; and
• the successive undertakings or individuals that fulfil the legal requirements may benefit from a reduction of up to 20 per cent of the amount of the fine.

There is currently no immunity plus or amnesty plus treatment available.

Are there deadlines for initiating or completing an application for immunity or partial leniency? Are markers available and what are the time limits and conditions applicable to them?

There is no deadline for submission of a leniency application. Provided the competition authority concerned does not have evidence concerning the cartel, immunity may still be available.

Once an application is made, the authority may grant, upon a reasoned request by the applicant, a deadline for submitting additional evidence if the applicant does not have all the necessary information at the time of the application. Provided the evidence is submitted within the deadline, the date of submission of the application for exemption is deemed to be the date of the initial request.

The recent reform of the LDC introduced the marker system, whereby a prospective leniency applicant can approach the CNMC and reserve a place in line for a limited time while it gathers additional information to complete its amnesty or leniency application (article 65.5 of the LDC)

What is the nature, level and timing of cooperation that is required or expected from an immunity applicant? Is there any difference in the requirements or expectations for subsequent cooperating parties that are seeking partial leniency?

According to article 65 of the LDC, the applicant must cooperate fully, continuously and diligently with the National Commission for Markets and Competition (CNMC) throughout the investigation and must end its participation in the alleged infringement the moment it provides the corresponding evidence to the competition authority (except in cases where the authority deems it necessary for such participation to continue to preserve the effectiveness of an inspection). Additionally, the company must have neither destroyed evidence related to the application nor revealed its intention to apply for leniency to third parties. Finally, the applicant must not have forced other companies to take part in the infringement.

The same obligations apply for applicants for reduction or partial leniency, except for those related to the coercion of other undertakings. Additionally, and most importantly, applicants must provide evidence of the alleged infringement that offers significant added value concerning elements already known to the authority (article 66 of the LDC).

Article 52 of Royal Decree 261/2008 of 22 February (RDC) provides for the following obligations that must be met to consider that the leniency applicant has cooperated ‘fully continuously and diligently’ with the investigation:

• the applicant has provided the Directorate for Competition without delay with all relevant information and evidence relating to the alleged cartel in its possession or available to it;
• the applicant has remained at the disposal of the Directorate for Competition to respond without delay to any request that may contribute to the clarification of the facts;
• the applicant has allowed the Directorate for Competition to conduct interviews with the company’s current employees and managers and, where appropriate, with former managers;
• the applicant has refrained from destroying, falsifying or concealing relevant information or evidence relating to the alleged cartel; and
• the applicant has refrained from disclosing the submission of the application for exemption or reduction of the amount of the fine, as well as the content of the application, before the notification of the statement of objections or the time agreed with the Directorate for Competition, as appropriate.

What confidentiality protection is afforded to the immunity applicant? Is the same level of confidentiality protection applicable to subsequent cooperating parties? What information will become public during the proceedings and when?

The competition authorities must treat the submission of a leniency application and the identity of the leniency applicant as confidential. The other parties will have access to the content of the leniency application, which forms part of a separate confidential file, only after the statement of objections is issued, for the parties to submit observations; however, they will not be able to obtain copies of the oral or written statements (they can obtain copies of the annexes submitted along with the application). Instead, they will have to access the leniency application at the premises of the competition authority.

The same regime is applicable both for immunity applicants and for subsequent cooperating parties.

In proceedings under judicial review, the competition authorities will not provide courts with copies of the leniency statements unless specifically required to do so, and only if requested by the courts will it send them on a confidential basis, granting their protection from third parties.

Does the investigating or prosecuting authority have the ability to enter into a plea bargain, settlement, deferred prosecution agreement (or non-prosecution agreement) or other binding resolution with a party to resolve liability and penalty for alleged cartel activity? What, if any, judicial or other oversight applies to such settlements?

Spanish law does not establish any settlement procedure for cartel cases, although the LDC is currently under review and, if the legislative proposal is approved, the new version will provide for a cartel settlement procedure (with a discount of the fine up to 15 per cent) in line with EU legislation.

Until that legislative reform is adopted, the current state of the law is that parties subject to a competition investigation may in theory offer commitments that solve the effects on competition and that ensure that the public interest is guaranteed to terminate the proceedings without the declaration of the existence of the infringement and, therefore, with no fine. This kind of settlement is not, however, available for cartel cases or other infringements with serious anticompetitive effects.

When immunity or partial leniency is granted to a corporate defendant, how will its current and former employees be treated?

The immunity or reduction of the amount of the fine corresponding to an undertaking shall be applicable, in the same percentage, to the fine that may be imposed on its representatives or on the persons that comprise the management bodies that have taken part in the agreement or decision, at the undertaking’s request and providing they have cooperated with the competition authority.

What are the practical steps for an immunity applicant or subsequent cooperating party in dealing with the enforcement agency?

Article 47 of the RDC states that the Directorate for Competition will review the information and evidence submitted by the immunity applicant and, if it concludes that the application complies with the requirements in article 65.1 of the LDC (being the first company to provide evidence that allows the authority to conduct an inspection or to prove a cartel), it will grant the conditional exemption from the payment of the fine.

At the end of the proceedings, if the leniency applicant has complied with the requirements established in article 65.2 of the LDC (full cooperation with the investigation, terminating its participation in the infringement, not having destroyed evidence or disclosed the submission of the application and not having forced other companies to participate in the infringement), the Council of the CNMC will exempt the leniency applicant from payment of the fine in the decision ending proceedings, following the Proposal for a Resolution by the Directorate for Competition. Since the 2021 reform to the LDC, the leniency applicant will also be exempt from the application of the ban on public contracting (article 65.4 of the LDC).

Regarding applications for reduction, article 50 of the RDC states that the Directorate for Competition will not examine the evidence submitted by an undertaking or natural person applying for a reduction of a fine without first deciding on conditional immunity relating to the same cartel. The article further states that the Directorate for Competition, no later than the notification of the statement of objections, will inform the leniency applicant of its proposal to reduce the fine, provided that the applicant has fulfilled the requirements in article 66.1 of the LDC (the evidence submitted proved to have significant added value for the investigation, the applicant cooperated fully with the investigation, the applicant terminated its participation in the infringement at the time of applying, and the applicant did not destroy evidence or disclose the submission of said application to third parties).

The Directorate for Competition may also accept an application for reduction after the notification of the statement of objections and, if that is the case, it will inform the leniency applicant of its proposal for reduction of the fine in the proposal for a resolution. Finally, the Council of the CNMC may or may not accept the proposed reduction and will set the percentage of reduction in its final decision.

All the foregoing applies equally to proceedings before the regional competition authorities.