The decision of the Council of the National Competition Commission (“NCC”) of 28 July 2010, which was adopted in case S/0091/08, Vinos finos de Jerez (the “Decision”), imposed fines on a group of Jerez fino wine producers for their involvement in a cartel that fixed prices and controlled production in the buyer’s own brand market (Jerez wine exported to countries such as Belgium or the Netherlands under the distributor’s own brand).
The judgment of 7 March 2013, rendered by Section Six of the Contentious-Administrative Chamber of the Spanish National Court (“NC”), ruled on the appeal lodged by a winery against the Decision and clarified certain issues relating to the quantification of sanctions for competition law infringements.
In its judgment, the NC confirmed the main findings of the Decision, particularly those regarding the fact that there was a single and continuous infringement. The NC also maintained, as did the Decision, that the involvement of the Jerez Wine Regulatory Council was insufficient to completely exonerate the wineries. However, it did consider that this entity created a situation of legal uncertainty, which reduced the culpability of the appellant to a mere wrong-doing or negligence.
When considering the proportionality of the sanctions that the Decision imposed on the appellant, the judgment of the NC contains a series of novel declarations that, if confirmed by subsequent judgments, would call into question the NCC communication on the quantification of sanctions dated 6 February 2009 (the “Communication”).
In particular, the NC considers that the maximum limit for the fines contemplated in Article 63 of Competition Law 15/2007 of 3 July (“Law 15/2007”) must be the criterion used to quantify the fine. This means that the fine must be quantified only on the basis of the turnover of the undertaking concerned (i) in the market affected by the infringement; and (ii) in the financial year immediately preceding that in which the fine is imposed.
The fine may be for up to 10% of the turnover and the specific percentage applied will depend on the circumstances of the case and must be adjusted in line with the seriousness of the conduct (duration, degree of culpability, mitigating circumstances, etc.).
As regards the appellant, the NC considered that the fine should be equivalent to just 5% of its sales of Jerez wine in the buyer’s own brand market in 2009, bearing in mind that: (i) there was no intent to deceive, only negligence; (ii) the duration of the infringement; and (iii) the appellant’s cooperation with the NCC by providing information on the infringement, which was considered as a mitigating circumstance, even though it did not comply with the requirements to benefit from the leniency program.
The existence of a dissenting vote against the judgment brings to light that this is a matter that has been the subject of much debate amongst the judges of Section Six. However, the NC has confirmed this interpretation in other judgments of 8 March 2013 and 21 March 2013.