Introduction
New institutional framework
Antitrust powers and functions
Outlook: business as usual?


Introduction

On October 7 2013 the new National Commission on Markets and Competition (NCMC) became fully operational.

The new NCMC merges into a single authority the functions and powers previously exercised by the now defunct National Competition Commission (NCC) and the regulators of some of the country's most strategic economic sectors:

  • energy (Comisión Nacional de la Energía (CNE));
  • telecommunications (Comisión Nacional del Mercado de las Telecomunicaciones (CMT));
  • postal services (Comisión Nacional del Sector Postal (CNSP));
  • airport services (Comisión de Regulación Económica Aeroportuaria);
  • media (Consejo Estatal de Medios Audiovisuales); and
  • railway services (Comité de Regulación Ferroviaria).

As foreseen by Act 3/2013, which created the NCMC, the new authority commenced operations after the following implementation measures had been taken:

  • approval of the NCMC's organic bylaws and internal functioning regulation, which occurred on August 30 and October 4 2013, respectively; and
  • appointment of the council and senior management of the NCMC's investigation directorates, which took place on September 9 and October 4 2013, respectively.

New institutional framework

The NCMC's institutional framework is novel not only in Spain, but also at an EU level, since it merges into a single independent public authority all functions and powers previously exercised by the NCC and the sector regulators, which have since ceased to exist as independent bodies.

The NCMC's decision-making body - the council - has 10 members, who were appointed by the Spanish government following a parliamentary hearing.

The president and vice president of the NCMC were formally appointed by the council from among its members. The council also has a secretary, who may intervene during meetings in a purely advisory capacity (ie, without a casting vote), and who will provide legal advice to members of the council on matters subject to its review.

Following the parliamentary hearings and the appointment of all nominees proposed by the Spanish government, the first NCMC council comprises the following members:

  • Mr José María Marín Quemada (president), a university professor who was previously a member of the governing council of the Bank of Spain;
  • Ms María Fernández Pérez (vice president), a member of the High Body of Civil Servants and a former senior official at the Ministry of Economy;
  • Ms Idoia Zenarrutzabeitia Beldarraín, a former vice president in the Basque regional government (1999 to 2009) and member of the council of the CNE (2011 to 2013);
  • Mr Josep María Guinart Solá, a former member of the Council of the CNE (2011 to 2013);
  • Mr Fernando Torremocha y García-Sáenz, a former magistrate in the Labour Chamber of the Basque Court of Justice and vice president of the NCC (2008 to 2013);
  • Ms Clotilde de la Higuera González, former state attorney at the Ministry of Economy and Competitiveness;
  • Ms María Ortíz Aguilar, state economist and former general sub-director for competition and economic regulation at the Ministry of Economy;
  • Mr Benigno Valdés Díaz, a university professor and former general director of SEPI's foundation(1) (2011-2013);
  • Mr Eduardo García Matilla, former manager at the Public Broadcasting Body Radio Televisión Española; and
  • Mr Diego Rodríguez Rodríguez, a university professor.

The council is divided into two chambers:

  • a Competition Chamber, chaired by the president of the NCMC; and
  • a Regulation Chamber, chaired by the vice president of the NCMC.

Each chamber is composed of five members, who will rotate between the chambers. The chambers will deal with all matters falling within their respective area of competence (ie, either regulation or antitrust).

Following the distribution of members of the council which took place on October 9 2013, the chambers are now comprised as follows:

  • The Competition Chamber comprises the president of the NCMC and Zenarrutzabeitia, Ortíz, Torremocha and Valdés.
  • The Regulation Chamber comprises the vice president of the NCMC and De la Higuera, Guinart, García and Rodríguez.

From an operational standpoint, the NCMC is structured into four investigation directorates, which deal respectively with competition, energy, telecommunications and media, and transport and postal services. Each investigation directorate is responsible for handling – with absolute independence from the council – matters relating to its respective areas or sectors.

The directors, who were appointed by the council, are as follows:

  • Competition Investigation Directorate - Mr Eduardo Prieto Kessler. He was previously senior adviser of the defunct Investigation Directorate of the NCC (2012 to 2013), and before that was deputy director of restrictive practices in the Service on Defence of Competition (which preceded the NCC).
  • Telecommunications and Media Investigation Directorate - Ms Alejandra de Iturriaga Gandini. She previously held various managerial positions at the CMT, including director of regulation for operators (2005 to 2013).
  • Energy Investigation Directorate - Mr Fernando Hernández Jiménez-Casquet. He previously held an advisory position at the Energy Department of the Ministry of Industry (January 2013 to October 2013).
  • Transport and Postal Investigation Directorate - Mr Ángel Chamorro Pérez. He was formerly president of the CNSP (2012 to 2013).

The NCMC is formally attached to the Ministry of Economy and Competitiveness and is headquartered in Madrid (although some offices of the Telecommunications and Media Investigation Directorate are located in Barcelona, where the defunct CTM was located).

Antitrust powers and functions

In principle, the creation of the NCMC has not substantially modified the Spanish competition regime, as the existing substantive legal framework - primarily, the Act on Defence of Competition (15/2007) - has not been amended and the government has expressed no intention to do so soon.

The Competition Investigation Directorate of the NCMC will be entrusted with the investigative and decision-making powers envisaged by the Act on Defence of Competition in relation to both sanctioning proceedings for antitrust infringements and merger control proceedings (as successor of the NCC's General Directorate). Meanwhile, the NCMC's Competition Chamber will be the decision-making body for those proceedings.

The NCMC will further act as the general advisory body to the Spanish government and Parliament on legislation affecting competition matters in Spain. It has also been entrusted with strengthened advisory powers before the mercantile courts in cases relating to private damages actions as a result of antitrust infringements (to date, this possibility has not yet been fully developed due to the dearth of private actions in Spain, but it is expected to become increasingly important in the future).

Outlook: business as usual?

The new NCMC has assumed the handling of all procedures that were ongoing when it commenced operations in October 2013. This was successfully achieved without significant disruptions, although in certain cases the timing of the proceedings has been temporarily suspended (a possibility foreseen in the legislation establishing the NCMC, as the transfer of files to the new authority was regarded as an "extraordinary circumstance" for these purposes).

One reason for this smooth transition is the fact that, notwithstanding the changes at the senior managerial level of the NCMC, most of the staff in charge of antitrust matters - and particularly all case handlers - have been transferred to the Competition Investigation Directorate. In fact, the structure of the new Competition Investigation Directorate mirrors that of the defunct NCC: it still comprises five sub-directorates, dealing respectively with industry and energy, services, information society, monitoring of decisions, and cartels and leniency.

The president of the NCMC outlined the policy objectives of the new institutions in a recent parliamentary hearing. Unsurprisingly, he confirmed that the watchdog will focus on promoting competition by developing ex ante regulation and by enforcing antitrust rules (a dichotomy that has proved controversial since the merger of the NCC and the regulators was announced). He also indicated that the NCMC will prepare preliminary evaluation reports on the status of competition in different sectors (as yet unspecified), and that the new entity plans to increase its international activities and connections.

In the meantime, the new NCMC seems to have been able to maintain the demanding activity levels of its predecessors(2) - particularly in the field of antitrust enforcement, where recent activity has included two dawn raids in different sectors - and is also matching its predecessor in terms of the severity of the fines imposed.(3)

For further information on this topic please contact Casto Gonzalez-Paramo or Alfredo Gomez at Hogan Lovells International LLP by telephone (+34 91 349 82 00), fax (+34 91 349 82 01) or email (casto.g-paramo@hoganlovells.com or alfredo.gomez@hoganlovells.com). The Hogan Lovells website can be accessed at www.hoganlovells.com.

[Endnotes

(1) SEPI is a Spanish public holding with stakes in several companies in the industrial sector.

(2) The president of the NCMC explained that in the first two months of operations, the NCMC analysed 388 files and adopted 269 decisions. Fifty one percent of these cases were in the energy sector, 26% in telecommunications, 16% in competition and 7% in the transport and postal sectors.

(3) Among other things, the NCMC recently imposed fines totalling around €15 million on, among others, the two main Spanish football clubs and broadcasting operator Mediapro for not fulfilling certain obligations set out in a previous NCC decision.