Spain’s Competition Authority has decided to close an investigation into the sanitary waste management sector in the Balearic Islands.

The investigation was triggered by a complaint from a new entrant into the market who argued that its competitors had market and client-sharing agreements in place. According to the complainant, some companies had agreed to limit their activities to sanitary waste collection, while another competitor was only active in treatment/processing activities (and in fact operating the only available plant in the Balearic Islands). Additionally, those players active in collection activities agreed to share clients and not to bid for each other’s traditional customers.

The interest of this decision lies in the fact that the authority declared that no infringement had been proven even though the proposal from the Directorate for Investigation was to fine the main market players for a hard-core cartel.

According to the case handler, the cartel included market and client sharing agreements, price fixing agreements and even collective efforts to prevent the complainant from entering the market. However, little evidence was found on price fixing or market/client sharing agreements and the only evidence of a boycott to the new entrant was legal claims filed against the new entrant on environmental and sanitary grounds. The exercise of legal rights such as filing complaints before competent authorities did not hold as proof of an antitrust infringement. The accusation therefore rested on the presumption that the company operating the only available processing plant had not entered collection activities because an agreement was in place with other market players.

Although the Directorate for Investigation proposed to fine the companies for a hard-core cartel, the Council – in charge of issuing final decisions – declared that no infringement had been proven and shelved the investigation. The Council’s arguments included references to the presumption of innocence, reasonable doubt and, also, the freedom of enterprises to determine whether they want to expand their activities or not.

It remains to be seen whether the Directorate for Investigation will raise its internal standard of proof following this decision from the Council. In the meantime, it might be advisable for companies to keep records of their past strategic decisions, including their decisions not to invest or expand activities.