Modifications introduced by the reform of the Spanish Competition Act through Royal Decree-Law 5/2023

The reforms introduced in the Spanish Competition Act include some of those already announced by the Spanish Competition Authority (“CNMC”) due to the transposition of the ECN+ Directive, in April 2021, and which were finally not introduced by Royal Decree-Law 7/2021 that transposed such Directive, which only –for reasons of lack of time– included those reforms strictly necessary to comply with the mandate of the Directive. 

In particular, the main changes introduced, which came into force on 30 June 2023, are as follows: 

• Procedure for the control of economic concentrations: the time limit for the first phase in the case of transactions notified by means of a Short Form is reduced from one month to 15 days, provided that the transaction has been pre-notified. There is no doubt that this novelty will be welcomed by the business world insofar as it will reduce the execution time for transactions that do not raise relevant competition issues (which is the case of the vast majority of transactions that can benefit from the Short Form procedure). 
• In contrast, the maximum time limit for second phase merger analysis is increased from two to three months, which constitutes a significant extension of the time period that, in general, may delay the approval and subsequent implementation of transactions that raise competition concerns. While this change will give the Spanish Competition Act greater flexibility in the detailed analysis of mergers, the CNMC already has the ability to suspend the deadline under certain circumstances, which typically allows it to extend maximum deadlines where necessary. 
• Finally, the three-month period previously available to the CNMC to resolve formal prior consultations to determine whether a concentration meets any of the notification thresholds is shortened from three months to one month. This reduction will undoubtedly contribute to making greater use of this form of cooperation and consultation with the CNMC and will make commercial transactions more agile.
• Regarding infringement procedures: the maximum time limit for resolution is extended from 18 to 24 months. Likewise, the deadline for submitting allegations to the Statement of Objections and the Proposed Resolution of the CNMC’s Competition Directorate is extended from 15 days to 1 month. With regard to the Proposed Resolution, the new text specifies that it must contain at least the proposed amount of the sanction and the assessment of the evidence, although this was something that the Competition Directorate had already been doing on its own initiative. Likewise, the article that provided for the Competition Directorate to send the report containing the Proposed Resolution (and, where appropriate, the proposal for exemption or reduction of the fine) to the Council of the CNMC has been eliminated.
• The reform clarifies the role of the CNMC as regards the application of Regulation 2022/1925 of the European Parliament and of the Council of 14 September 2022 on contestable and fair markets in the digital sector and amending Directives (EU) 2019/1937 and (EU) 2020/1828 (“Digital Markets Act” or “DMA”). In particular, the new Article 18(3) of the Spanish Competition Act allows the CNMC to investigate cases of possible infringements of the DMA in Spain. While the application of the DMA remains the exclusive jurisdiction of the European Commission (“EC”), this amendment to the Spanish Competition Act allows the CNMC, within the framework of the preliminary reserved information procedures and after informing the EC in writing, to request information and even inspect potentially infringing companies.  

The new text clarifies that when the EC initiates proceedings in relation to the same facts under investigation by the CNMC’s Competition Directorate, the latter must terminate the proceedings and inform the EC of its conclusions. The Competition Directorate may in any case use the information gathered in order to investigate possible infringements of the Spanish Competition Act.

Finally, it is important to recall some of the proposals for reform of the Spanish Competition Act that have not been introduced by Royal Decree-Law 5/2023. In particular, the increase in the maximum limit (from €60,000 to €400,000) of fines for executives for their participation in agreements or decisions restricting competition has been excluded. The same goes for the “settlement” mechanism, which would have allowed companies that have been investigated in the context of an infringement procedure to recognise their liability before the CNMC, thereby reducing the possible fine by up to 15% and thus simplifying the CNMC’s procedure. Finally, the modification of the turnover notification threshold, which included an exemption for cases in which certain requirements were met, has not been included either. It cannot be ruled out that these amendments will be introduced in the next legislature.