On 5 February 2015, the Spanish Supreme Court issued a ruling which put an end to the controversy surrounding the interpretation of Article 63.1 of the Spanish Competition Act ("SCA") regarding the maximum level of fines that can be imposed in cases of competition law infringements.
The case concerned an appeal against a decision issued on 19 October 2011 by the Spanish Competition Authority ("CNMC") sanctioning a cartel which entailed business coordination and bid-rigging activities in the sector of maintenance works for road surfaces. The cartel involved up to 53 undertakings, which were found to have concerted their business strategies in a total of 13 different public tenders relating to works for refurbishing, strengthening and maintaining road surfaces. Accordingly, the CNMC imposed fines of up to 10% of the total turnover of each undertaking for a breach of Article 1 SCA and Article 101 TFEU.
A lower Spanish court (Audiencia Nacional), when ruling on an appeal against the CNMC decision, had considered that the percentages of turnovers referred to in Article 63.1 SCA as the maximum amount of fines (i.e., 1% for minor infringements, 5% for serious infringements, and 10% for very serious infringements) should be applied to the turnover generated by the infringing company in the business sector affected by the infringement and should not include the turnover generated in other business sectors. Therefore, the court partially annulled the decision of the CNMC and ordered the latter to consider only the turnover generated by the business activities affected by the infringement for the calculation of the fines and for the application of the 10% limit.
On further appeal, however, the Spanish Supreme Court quashed the lower court judgment and ruled that the maximum fine for very serious breaches of competition rules is 10% of the total turnover of the company engaged in the infringement, as opposed to only taking account of the turnover generated in the business sector concerned by the infringement.
This judgment is expected to be applied to at least 17 pending cases which have been awaiting a decision on the now-settled controversy.
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