On 6 June 2013, Law 3/2013 came into force creating the National Markets and Competition Commission (“Law 3/2013” and the “NMCC”, respectively).
Law 3/2013 provides for the creation of a single regulatory body in Spain, combining the functions of the current National Competition Commission (“NCC”) and the regulators of the energy, telecommunications, media, post, railway transport, air transport and gambling sectors.
The objective of the NMCC is to guarantee, preserve and promote effective and transparent competition in all markets and sectors for the benefit of consumers and market operators. In order to achieve this, it will be structurally and operationally independent from the government, public bodies, market agents and any other business or commercial interests. The NMCC will ensure the consistent application of industry regulations and general competition law throughout Spain, by coordinating its actions with the relevant bodies of the autonomous regions and cooperating with the central state government, the national courts and the EU institutions.
The NMCC will be responsible for enforcing competition law, the supervision and control of certain industries, and dispute resolution.
2. Institutional structure
The NMCC will be comprised of two governing bodies: the Council and the President. The Council is the decision-making body with adjudicative and advisory functions. It will have ten members and can sit in full plenary sessions or in chambers. The law provides for two chambers, each with five members:
- The Competition Chamber, presided by the President of the NMCC; and
- The Regulatory Supervision Chamber, presided by the Vice-President of the NMCC.
The two chambers are closely linked, as members will rotate between the two, and each chamber must issue reports for the proceedings it hears that affect or relate to matters for which the other chamber is responsible. Plenary sessions will be held to resolve discrepancies between the two chambers, or for those matters that are particularly relevant to competition in the supervised markets or regulated industries.
Council members are proposed by the Ministry of Economy and Competition and appointed by the government for a non-renewable term of six years.
Law 3/2013 envisages a functional separation between the NMCC’s investigation and resolution roles. For this reason, it creates four investigation directorates:
- The Competition Directorate
- The Telecommunications and Audiovisual Sectors Directorate
- The Energy Directorate
- The Transport and Postal Sectors Directorate.
3. Enforcement of competition law
There are no significant changes to competition law, which continues to be governed by Law 15/2007 of 3 July 2007, for the Defence of Competition. However, combining the NCC with the principal industry regulators will certainly have an impact on the process and focus of proceedings affecting regulated sectors.
Law 3/2013 enshrines various practices of the NCC. For example, in terms of inspections, the law specifies that inspectors must be given access to computer programmes and to magnetic, optical and any other type of computer disk. Moreover, they will be able to take control of any goods or effects used in the course of the investigated party’s business, including all documents that businesses have a duty to keep.
The NMCC’s requests for information must have a clear and exact purpose and use of the information requested must be in accordance with this purpose.
Competition cases will be investigated by the Competition Directorate and resolved by the Competition Chamber.
4. regulated sectors
Law 3/2013 introduces a new separation of functions in the energy sector between the NMCC and the Ministry of Industry, Energy and Tourism. It also includes a sweeping up clause under which the functions that have not been expressly assigned to the Ministry of Industry, Energy and Tourism are assumed by the NMCC. The most significant changes are the following:
- The Ministry of Industry, Energy and Tourism will be entrusted with exercising all responsibilities relating to the liquid hydrocarbon sector.
- Law 3/2013 grants the NMCC various powers to supervise and control the electricity and gas sectors, the majority of which are expressly attributed to the national regulatory authorities by European Directives. In contrast, the Ministry of Industry, Energy and Tourism is entrusted with those tasks that, according to the Law, are of an administrative nature and the performance of which does not require a special degree of independence.
- The most significant change is that the Ministry of Industry, Energy and Tourism is being entrusted with the control of share acquisitions in the energy sector (which is traditionally known as Función 14). Law 3/2013 not only entrusts the Ministry of Industry, Energy and Tourism with exercising this power, but also makes significant changes to the regulations, for instance: (i) it will now also apply to the liquid hydrocarbon sector; (ii) the prior authorisation has been replaced by an ex-post communication; and (iii) the Ministry will only be able to impose conditions in certain specific cases contemplated in the law. Transactions related to transport network operators will be governed by the relevant industry regulations, which means that it may be necessary to open a new certification process under the relevant regulations.
4.2 Other regulated sectors
Law 3/2013 does not introduce significant changes to the regulation and supervision of the telecommunications or audiovisual sectors:
- Telecommunications sector: the NMCC has all the responsibilities that previously fell under the remit of the industry regulator. A notable change is the power granted to the NMCC to, in exceptional cases, impose an obligation on vertically-integrated undertakings with significant market power to transfer activities related to the wholesale of access products to an independent entity.
- Railway sector: the NMCC has been granted powers to supervise and control market entry conditions. The NMCC will essentially exercise functions concerning the safeguarding of the fairness of tenders for public railway services on the national network, guaranteeing equality between companies in terms of market entry, and supervising negotiations between railway companies and infrastructure managers regarding standards, fees and certain aspects of international passenger rail services.
- Airport charges: the NMCC will supervise airport operators’ compliance with transparency and consultation procedures, and the legality of proposals for changes or updates to airport charges.
- Postal sector: the NMCC will supervise and control the provision and financing of the universal postal service and matters relating to network access.
5. ENTRY INTO FORCE OF THE LAW AND TRANSITIONAL REGIME
The NMCC is expected to begin operating within four months of Law 3/2013 coming into force (by 6 October 2013 at the latest). The regulatory bodies that are being abolished due to the creation of the NMCC will continue to perform their current functions until the latter begins operating.
Law 3/2013 expressly sets out that the creation and set-up of the NMCC can be considered an exceptional circumstance that allows the extension of deadlines to resolve cases. Consequently, cases that are currently pending to be heard before the NCC or the industry regulators may be delayed.