1 Legal and enforcement framework
1.1 Which legislative and regulatory provisions govern merger control in your jurisdiction?
The Spanish merger control regime is set out in Law 15/2007 on the Defence of Competition (‘Competition Act'). The Regulation on the Defence of Competition, implemented by Royal Decree 261/2008, is also relevant, as it further develops some of the provisions of the Competition Act.
The National Markets and Competition Commission (CNMC) has also issued communications and notices to help undertakings to assess certain issues connected to the Spanish merger control regime (eg, the Simplified Procedure Communication of 21 October 2015). The CNMC also follows the soft law issued by the European Commission in interpreting the internal merger control rules (eg, guidelines on the assessment of horizontal mergers and ancillary restraint notices).
1.2 Do any special regimes apply in specific sectors (eg, national security, essential public services)?
The Competition Act sets forth no special regimes for specific sectors.
1.3 Which body is responsible for enforcing the merger control regime? What powers does it have?
The CNMC is responsible for enforcing the merger control regime.
Created in 2013, the CNMC is a public law entity with its own legal personality and full public and private capacity. It is attached to the Ministry of Economy, but carries out its activities with organic and functional autonomy and full independence from other public administrations.
Law 3/2013 on the Creation of the National Markets and Competition Commission regulates the functioning and limits of the CNMC. The CNMC is responsible for the enforcement of competition law and has powers regarding the monitoring of the media, energy, transport, postal and telecommunication sectors.
It comprises a Council and four directorates:
- the Competition Directorate;
- the Telecommunications and Audio-visual Sector Directorate;
- the Energy Directorate; and
- the Transport and Postal Sector Directorate.
Both the Council and the Competition Directorate deal with merger control proceedings. The Council is the decision-making body and the Competition Directorate is in charge of handling merger control proceedings.
If a given merger may affect markets or activities relating to a regulated sector, the Competition Directorate may consult one of the other directorates before a decision is issued.
The Council can decide to authorise a merger with or without commitments, or to prohibit it.
In certain cases, the Spanish Council of Ministers is entitled to review decisions made by the Council and, as the case may be, to modify them on grounds of general interest regulated in the Competition Act.
2 Definitions and scope of application
2.1 What types of transactions are subject to the merger control regime?
Transactions considered to be economic concentrations are subject to the merger control regime. An economic concentration is deemed to arise where there is a stable change in the control of the whole or parts of one or more undertakings as a result of:
- the merger of two or more previously independent undertakings;
- the acquisition by one or more undertakings of control of the whole or parts of one or more other undertakings; or
- the creation of a joint venture and, in general, the acquisition of joint control over one or a number of undertakings, when any of them carries out the functions of an independent autonomous entity on a permanent basis.
The Competition Act envisages some specific circumstances in which a transaction that falls within one of the previous cases is not considered an economic concentration, as follows:
- the simple redistribution of equities or assets among undertakings from the same group;
- the holding on a temporary basis of securities acquired in an undertaking for their resale by a credit or another financial institution or an insurance company which usually negotiates or resales shares on third parties' or its own account, provided that it does not exercise the voting rights of those securities to determine the competitive behaviour of the undertaking acquired or provided that it exercises such voting rights only to prepare for the disposal of the securities or all or part of that undertaking or its assets, within one year of the date of the acquisition (this deadline may be exceptionally extended by the CNMC in certain cases);
- the acquisition by financial holding companies (as defined in Article 5.3 of the Fourth Directive 78/660/CEE of the Council) of securities of other undertakings on a temporary basis, provided that the voting rights attached to the securities are exercised only to maintain the full value of the investments and not to determine the competitive conduct of the undertaking acquired; or
- the acquisition of control by a person on the basis of a mandate granted by a public authority in accordance with insolvency regulations.
If, within a period of two years, there are two or more economic concentrations between the same sellers and purchasers which result from the change of control over one part of one or more undertakings (including a branch, business unit or establishment), such transactions should be considered as one economic concentration taking place on the date of the last transaction.
2.2 How is ‘control' defined in the applicable laws and regulations?
Control can derive from agreements, rights or any other means that, under the specific factual and legal circumstances of the case, allow a decisive influence to be exercised over an undertaking or part thereof, and, in particular, from:
- the ownership of, or right to use, all or part of the assets of an undertaking; or
- agreements, rights or any other means that confer decisive influence on the composition, voting or decisions of the governing body of the undertaking.
2.3 Is the acquisition of minority interests covered by the merger control regime, and if so, in what circumstances?
Minority shareholders may acquire sole or joint control of an undertaking if they have the possibility to determine the undertaking's strategic commercial behaviour. In that sense, the acquisition of minority shareholding can confer control in any of the following circumstances:
- Specific rights are attached to the shareholding (ie, preferential shares granting the right to appoint a majority of the governing body of the undertaking or conferring a majority of votes of the board).
- Minority shareholders have, in practice, a majority at shareholders' meetings or n the board of directors.
- Several minority shareholders agree to act in the same way (linked either by strong common interests or by binding agreements).
- Certain veto rights are granted so that a minority shareholder can block strategic decisions such as approval of the budget or the business plan, the appointment or dismissal of senior management, or approval of certain investments.
- A supermajority (where the vote of the minority shareholder is needed) is required for strategic decisions.
Conversely, veto rights that are granted to minority shareholders in order to protect their financial interests as investors do not confer control. In any event, whether particular veto rights can confer control should be assessed on a case-by-case basis.
2.4 Are joint ventures covered by the merger control regime, and if so, in what circumstances?
The creation of a joint venture and, in general, the acquisition of joint control over an undertaking are considered to be economic concentrations only where there is a full-function joint venture – that is, a joint venture that performs the functions of an autonomous economic entity on a lasting basis. The creation of such full-function joint venture will be subject to the merger control provisions if it meets the relevant thresholds.
If the joint venture is not fully functional, the parent companies' agreement must be assessed under Article 1 of the Competition Act and/or Article 101 of the Treaty on the Functioning of the European Union.
2.5 Are foreign-to-foreign transactions covered by the merger control regime, and if so, in what circumstances?
Like other economic concentrations, foreign-to-foreign mergers are subject to the Spanish merger control regime if any of the Spanish thresholds are met (which are based on sales in Spain). Therefore, there are no specific rule for foreign-to-foreign transactions; and for the purposes of determining whether a transaction is subject to Spanish merger control proceedings, it is irrelevant if one or both parties to the transaction do not have a subsidiary, a branch or any assets in Spain.
2.6 What are the jurisdictional thresholds that trigger the obligation to notify? How are these thresholds calculated?
In Spain, an economic concentration that does not have an ‘EU dimension' under the EU Merger Regulation (139/2004) must be notified to the National Markets and Competition Commission (CNMC) in any of the following circumstances:
- As a result of the transaction, a share equal to or higher than 30% of a given product or service market in Spain (or in a geographic market within Spain) is acquired or increased (‘market share threshold). However, notification will not be required if the market share threshold is met, but:
- the turnover achieved in Spain by the target or the value of the assets to be acquired is below €10 million; and
- the individual or combined market share of the undertakings concerned does not reach 50% in any affected market in Spain (de minimis exemption).
- The combined turnover achieved in Spain in the last financial year by the undertakings concerned exceeded €240 million and the individual turnover achieved in Spain by at least two of the undertakings concerned exceeded €60 million (‘turnover threshold)'.
The market share threshold is calculated as follows:
- The appropriate product or service market should be defined, taking into account previous CNMC and/or European Commission decisions.
- The market shares should be calculated on the basis of both turnover and volume (units, weight or any other relevant measure).
- Sales in Spain should be considered, taking into account sales to undertakings and customers located in Spain (ie, sales by destination, not origin).
- The seller is not an undertaking concerned by the transaction; therefore, its market shares are not relevant for these purposes.
- If the economic concentration consists of the creation of a full-function joint venture, there will be an acquisition of market share where the parent companies contribute all or part of their business to the newly created full-function joint venture.
The turnover threshold is calculated as follows:
- Turnover must include amounts derived from products sold and services provided falling within the undertakings' ordinary activities after deducting sales rebates, value-added tax (VAT) and other taxes directly related to the turnover.
- Turnover must refer to the previous financial year. If any acquisition or disposal of entities/assets was carried out after the end of the relevant financial year, turnover must be revised to reflect that.
- Turnover comprises products sold and services provided to undertakings or consumers located in Spain (ie, sales by destination, not origin).
- Intra-group transactions need not be taken into account.
- As regards the purchaser, the turnover must include sales to third parties by all companies belonging to the same group, which means that turnover will be calculated as the sum of the turnover of the following undertakings:
- the purchaser;
- companies directly or indirectly controlled by the purchaser;
- companies that control the purchaser; and
- all companies controlled by the companies controlling the purchaser.
- As regards the target, the turnover of the parts being acquired will be taken into account irrespective of whether those parts have their own legal personality.
- The seller is not an undertaking concerned by the transaction; therefore, its turnover is not relevant for these purposes.
- In order to avoid double counting, if the target was already controlled by one or more of the purchasers, the turnover considered for the target will be the target's turnover.
- The turnover calculation for the following types of companies should be done on the basis of specific rules:
- When one undertaking concerned is an investment fund, the turnover of such fund shall be the sum of the turnover of the companies managing the fund and the undertakings controlled by the investment funds which are also managed by the same managing company.
- The turnover of credit institutions and other financial institutions shall be the sum of income for the concepts listed below (as defined in Directive 86/635/CEE of the Council of 8 December) obtained by branches or divisions located in Spain, net of VAT and any other tax directly related to such income:
- interests and similar products;
- returns of securities (which may be shares, variable titles or shares in group companies);
- fees charged;
- net profits derived from financial transactions; and
- other operating income.
- The turnover of insurance companies shall be the amount of gross premiums charged, comprising all amounts paid and pending to be paid for insurance agreements set forth by such companies or on behalf thereof, including premiums assigned to reinsurers and net of taxes applied to the basis of the amount of the different premiums or their total volume, taking into account the gross premiums paid by Spanish residents.
2.7 Are any types of transactions exempt from the merger control regime?
Pursuant to the one-stop shop principle, Spanish merger control does not apply to concentrations that met the thresholds set forth in the EU Merger Regulation.
3.1 Is notification voluntary or mandatory? If mandatory, are there any exceptions where notification is not required?
If a transaction meets the relevant thresholds, notification in advance of its execution or completion is mandatory without exception. In such cases, clearance from the Spanish Competition Authority (CNMC) must be obtained (expressly or tacitly) before implementing the transaction, unless the CNMC agrees to waive this standstill obligation (see question 3.8).
3.2 Is there an opportunity or requirement to discuss a planned transaction with the authority, informally and in confidence, in advance of formal notification?
The CNMC has a formal consultation procedure through which undertakings can seek advice in order to clarify whether the proposed transaction constitutes a concentration and/or exceeds the notification thresholds.
Moreover, undertakings can obtain informal guidance from either a jurisdictional or a substantive perspective before notification by submitting a draft notification form to the CNMC.
Although it is not mandatory, in practice, pre-notification is usually advisable, as it usually helps to speed up the process. In that regard, the CNMC will review the draft notification form and confirm whether the information included in the draft form is sufficient or whether additional information is needed, reducing the likelihood that the CNMC will stop the clock by formally requesting further information from the parties once the notification has been officially filed.
3.3 Who is responsible for filing the notification?
The party acquiring sole control over an undertaking or part thereof will be responsible for filing.
In case of the acquisition of joint control over one or more companies or a part thereof (through a merger, the creation of a joint venture or any other way of acquiring joint control), the parties acquiring joint control as a result of the transaction will be jointly responsible for filing.
The undertakings responsible for filing the notification can do this by themselves or through a representative duly empowered.
3.4 Are there any filing fees, and if so, what are they?
Yes, the notifying parties should pay a filing fee.
Currently, the Annex to Law 3/2013 on the creation of the CNMC sets forth the following fees (which may change from time to time):
- Concentrations that qualify for a short form notification (see question 4.2) must pay a filing fee of €1,545.45.
- Otherwise, the filing fees are as follows:
- €5,502.15 if the aggregate turnover in Spain of the undertakings concerned is equal to or less than €240 million;
- €11,004.31 if the aggregate turnover in Spain of the undertakings concerned exceeds €240 million, but is less than or equal to €480 million;
- €22,008.62 if the aggregate turnover in Spain of the undertakings concerned exceeds €480 million, but is less than or equal to €3 billion; or
- a fixed fee of €43,944 if the aggregate turnover in Spain of the undertakings concerned exceeds €3 billion, plus an additional €11,004.31 for every €3 billion by which said turnover exceeds the foregoing amount, up to a maximum limit of €109,806.
3.5 What information must be provided in the notification? What supporting documents must be provided?
The notification must be made using the official forms (standard or short form; see question 4.3), both of which are attached as annexes to the Regulation on the Defence of Competition.
Under the standard form, the notifying parties must provide the following information (if the transaction should be notified under the short form, less information is needed):
- information on the parties;
- a description of the transaction;
- potential ancillary restraints;
- a description of the previous control structure of the notifying party and the target;
- definitions of the relevant product and geographic markets concerned by the concentration;
- information on the structure of the relevant markets, such as market share estimates, details on offer and demand structures, barriers to entry, R&D expenditure and whether any cooperative or vertical issues arise from the transaction; and
- information on the contribution of the transaction to different kind of efficiencies.
In addition to the official form, the notifying party must submit other relevant documents, such as:
- the financial statements of the parties to the transaction and their parent companies for the last audited financial year;
- the agreements giving rise to the transaction (translated into Spanish);
- analysis, reports or studies that are considered relevant;
- cooperation agreements or other ancillary agreements;
- the power of attorney (if the notification is submitted through a representative);
- evidence of payment of the filing fee; and
- reports or documents prepared by or requested from third parties for the management body, shareholders, investors or analysts of the undertakings concerned.
In case of a lack of information or documents, the CNMC may require the notifying parties to correct such deficiencies within 10 days; if they fail to do so, the CNMC shall consider that the notifying parties have desisted from the notification.
3.6 Is there a deadline for filing the notification?
There is no specific deadline for filing the notification. However, an economic concentration that meets the applicable thresholds must be notified prior to implementation.
There is an exception regarding notifications for public takeover bids relating to securities listed on the stock exchange markets authorised by the Spanish National Securities and Exchange Commission (CNMV). Such public takeover bids may be launched without the need to notify the CNMC, as long as:
- the transaction is notified to the CNMC within five days of filing the request for the bid's authorisation to the CNMV; and
- the purchaser does not exercise the voting rights attached to the securities or executes them only to safeguard the value of its investment, upon authorisation by the CNMC.
3.7 Can a transaction be notified prior to signing a definitive agreement?
Notification may be made as from the time there is a proposal or agreement. For these purposes, a proposal or agreement is considered to exist:
- in cases involving acquisition of control, from the time the parties consent to carry out the transaction and determine the manner and timeframe in which, and the conditions under which, it will be executed. If the parties are companies, the agreement will be considered to exist when it has been approved by the management body of the company (even if the agreement still needs to be adopted or ratified by another body);
- in cases involving a public bid, if there is a resolution of the board of directors of the offeror and its intention to present the offer has been publicly announced; or
- in the case of mergers, when the criteria determined by the corporate legislation are met.
In practice, the CNMC is reluctant to authorise a transaction without receiving a copy of the execution version of the agreements.
3.8 Are the parties required to delay closing of the transaction until clearance is granted?
Yes. An economic concentration cannot be implemented (and therefore closed) until it has been authorised (expressly or tacitly) by the CNMC and must be suspended until its clearance.
Failure to comply with this standstill obligation may lead to the imposition of fines (see question 7.1).
However, on the request of the notifying parties, the CNMC may waive the standstill obligation after considering certain factors, such as the damage that such obligation would cause to the undertakings concerned. This waiver may be subject to conditions that guarantee the effectiveness of the CNMC's final decision on the merger. The CNMC has granted waivers only in very exceptional circumstances.
Moreover, under certain conditions, this standstill obligation does not apply to public takeover bids (see question 3.6).
3.9 Will the notification be publicly announced by the authority? If so, how will commercially sensitive information be protected?
Yes, the notification will be publicly announced by the CNMC on its website through a press release. Moreover, the CNMC also publishes its decisions on its website.
The notifying parties may file a reasoned request for the CNMC to keep confidential any information that constitutes a business secret. The CNMC will decide on the confidentiality request before publishing its final decision on the merger and the notifying parties may appeal the decision on the confidentiality request if necessary.
4 Review process
4.1 What is the review process and what is the timetable for that process?
In Spain, there are two phases in the review process.
Phase I starts with submission of the notification form to the Competition Directorate of the National Markets and Competition Commission (CNMC). The Competition Directorate will prepare a report taking into account various factors (see question 4.8) and will issue a proposal for resolution. Based on that, the Council of the CNMC will issue a decision to:
- authorise the merger;
- subject the authorisation to commitments proposed by the notifying parties to address the potential obstacles to competition resulting from the merger;
- open a Phase II investigation, where it considers that the merger may lead to obstacles to competition;
- send the merger to the European Commission, where it considers that the European Commission has jurisdiction over the merger; or
- close the proceedings, where it considers that the transaction is not subject to merger control.
Where the Council decides to open a Phase II investigation, the Competition Directorate will publish a non-confidential brief note that shall be communicated to those natural or legal persons that may be affected by the transaction and to the Council of Users and Consumers, so they can submit their comments on the matter within 10 days. Where the transaction will affect an autonomous community, this brief note will also be communicated to the competent bodies of that autonomous community, together with a non-confidential version of the notification, so that they can issue a non-binding report on the merger.
The Competition Directorate will also issue a statement of objections setting out the potential obstacles to competition deriving from the merger, which will be notified to interested parties so they can submit their comments on the matter within 10 days. The Competition Directorate will issue a final proposal for resolution.
The Council will review this proposal for resolution and a hearing may take place upon request of the notifying parties. The Council will then adopt a final decision to:
- authorise the transaction;
- submit the transaction to certain commitments proposed by the notifying parties or conditions imposed by the CNMC;
- prohibit the transaction; or
- close the proceedings.
This final decision must be notified to the interested parties and the minister of economy and finance.
Where the CNMC's decision is to prohibit a merger or authorise it subject to commitments or conditions, the minister of economy and finance may decide to elevate it to the Council of Ministers for reasons of general interest. In such case, the Council of Ministers will either confirm the CNMC's decision or authorise the transaction, with or without conditions, on the grounds of general interest (see question 4.10).
During Phases I and II, the notifying parties can submit commitments to the CNMC in order to address any concerns on the merger, either on their own initiative or at the CNMC's request (see question 5.1).
Phase I can take a maximum of one month, which will be extended by 10 working days if the notifying parties submit commitments in order for the transaction to be authorised. Phase II can last up to two months, which will be extended by 15 additional working days if the notifying parties submit commitments in Phase II. Moreover, the minister of economy and finance has 15 days from receipt of the CNMC's decision to adopt and notify the decision to elevate it to the Council of Ministers; and the Council of Ministers has one month from receipt of the decision to elevate in order to adopt and notify its decision.
If the CNMC does not adopt and notify a decision within the specified timeframes in either Phase I or Phase II, the transaction is deemed to be tacitly authorised, with the following exceptions:
- The merger was not notified and the CNMC has required the notifying parties to notify (see question 7.1);
- The CNMC has requested the notifying parties to supply additional information or documents and they do not comply with this request, or comply only after the deadline to do so has elapsed; or
- The CNMC decides to send the merger to the European Commission.
If the minister of economy and finance or the Council of Ministers does not adopt and notify the decision within the specified timeframes, the CNMC's final decision during Phase II will become automatically effective and enforceable.
In both Phase I and II, the CNMC may stop the clock for a number of reasons (see question 4.2).
4.2 Are there any formal or informal ways of accelerating the timetable for review? Can the authority suspend the timetable for review?
The CNMC can suspend the timetable for review in any of the following circumstances:
- An interested party is requested to correct deficiencies or submit documents or other information.
- A third party or any other public authority is requested to submit documents or other information.
- Cooperation with the European Commission or any other national competition authority is necessary.
- There is an administrative or judicial appeal.
The notifying parties may engage in pre-notification contacts with the CNMC. This usually speeds up the process, as it reduces the likelihood that the CNMC will stop the clock due to requests for information (see question 3.2).
4.3 Is there a simplified review process? If so, in what circumstances will it apply?
It is possible to notify a concentration through a short form, which reduces the quantity of information to be submitted to the CNMC, in any of the following scenarios:
- No horizontal or vertical overlaps exist between the undertakings concerned.
- The market shares of the undertakings concerned are de minimis so that it is unlikely that the concentration will significantly affect competition. The concentration is deemed to comply with this criterion when:
- the combined market shares of the undertakings concerned is below 15% in any product or service market in Spain or any geographic market within Spain, or is below 30% and the additional share resulting from the concentration is no higher than 2%; and
- the individual or combined market share of the undertakings concerned is below 25% in any market vertically related to a product market in which any other undertaking concerned operates in Spain or any geographic market within Spain.
- As a result of the transaction, one party acquires sole control of one or more undertakings (or parts thereof) over which it already had joint control.
- In case of a joint venture, the joint venture has or plans to have either marginal activities in Spain (with a turnover not higher than €6 million) or no activities at all.
Even if the above circumstances are met, the CNMC may request the notifying parties to submit a standard form in any of the following scenarios:
- The relevant markets are difficult to define.
- One of the undertakings concerned is a new operator or a potential operator or owner of an important patent.
- It is not possible to properly determine the market shares of the undertakings concerned.
- The relevant markets have high barriers to entry, a high level of concentration or known competition concerns.
- At least two of the undertakings concerned are present in closely related adjacent markets.
- The transaction may lead to coordination issues.
- As a consequence of the transaction, one party acquires sole control over a joint venture over which it already had joint control, where the acquiring party and the joint venture have jointly a strong market position or have strong positions in vertically related markets.
- The short form contains incorrect or misleading information.
If the CNMC requests the notifying parties to submit an ordinary form, the deadline for the CNMC to adopt and notify the decision will start again on the date when the ordinary form is filed.
4.4 To what extent will the authority cooperate with its counterparts in other jurisdictions during the review process?
The CNMC cooperates with the European Commission and the national competition authorities of EU member states through the European Competition Network (ECN).
In addition, the CNMC can cooperate with other authorities that are not part of the ECN.
4.5 What information-gathering powers does the authority have during the review process?
The CNMC can issue requests for information addressed to interested parties so that they correct deficiencies and submit documents or other information. The CNMC may also request documents or information from third parties or public authorities.
In such cases, the addressees of the information requests are under a duty to respond and provide any data and information that they have regarding the request in a manner that is complete, correct, true and not misleading. Failure to do so will amount to a minor infringement, which could lead to a fine of up to 1% of the total turnover (at a group level) of the infringing company in the immediately preceding year. Moreover, the maximum timeframe for the CNMC to issue and notify the decision may be suspended (see question 4.2).
4.6 Is there an opportunity for third parties to participate in the review process?
Third parties may request to be recognised as ‘interested' parties to the proceedings during Phase II in order to have full intervention therein. This request should be submitted to the CNMC, together with any allegations, within 10 days of the CNMC issuing its brief note on the merger (see question 4.1). The CNMC will then decide whether to accept or deny such request within 10 days, after reviewing the third party's proven legitimate interest.
Third parties can also participate in the review process as a consequence of receiving a request for information from the CNMC (see question 4.5).
4.7 In cross-border transactions, is a local carve-out possible to avoid delaying closing while the review is ongoing?
Yes, it is possible to carry out a carve-out in Spain and implement the concentration in other countries, as long as the implemented transaction has no effect in Spain. However, it is highly recommended to discuss this with the CNMC before closing the transaction in other jurisdictions. In order to do so, a reasoned request may be submitted at any time during the review process.
4.8 What substantive test will the authority apply in reviewing the transaction? Does this test vary depending on sector?
The CNMC must evaluate economic concentrations taking into consideration the possible obstacles to the maintenance of effective competition in all or part of the Spanish market. This test does not vary depending on sector.
The main elements taken into account when assessing an economic concentration include:
- the structure of all relevant markets;
- the market position of the undertakings concerned and their economic and financial strength;
- actual and potential competition from companies located within or outside Spain;
- the possible alternatives for suppliers and consumers and their access to sources of supply or markets;
- any barriers to entry to those markets;
- offer and demand trends, bargaining power and their ability to compensate the position of the undertakings concerned in the market; and
- the economic efficiencies to be derived from the transaction.
4.9 Does a different substantive test apply to joint ventures?
According to the Competition Act, in the event of the creation of a full-function joint venture or the acquisition of joint control over an existing entity has the object or effect of coordinating the competitive behaviour of undertakings that continue being independent (ie, the parent companies), the CNMC will assess such coordination under articles regulating anti-competitive conduct (ie, Articles 1 and 2 of the Competition Act).
4.10 What theories of harm will the authority consider when reviewing the transaction? Will the authority consider any non-competition related issues (eg, labour or social issues)?
The Spanish merger control regime adopts a ‘substantial lessening of competition' test, which reflects an economic approach.
When the CNMC prohibits a concentration or authorises it subject to conditions under a Phase II investigation, the Council of Ministers may review such decision and assess the economic concentration by taking into account criteria of general interest other than the defence of competition. The concept of ‘general interest' includes, in particular, the following:
- national defence and security;
- protection of public health and safety;
- free movement of goods and services within the national territory;
- protection of the environment;
- promotion of technological research and development; and
- a guarantee of adequately maintaining the aims of sector regulation.
5.1 Can the parties negotiate remedies to address any competition concerns identified? If so, what types of remedies may be accepted?
The notifying parties may offer structural and/or behavioural commitments on their own initiative or at the National Markets and Competition Commission's (CNMC) request during both Phase I and Phase II. The commitments submitted must be sufficient to resolve the competition concerns identified by the CNMC in order to be accepted.
The CNMC may communicate such commitments to third parties in order for them to submit their opinion on whether these are adequate to address the concerns identified.
5.2 What are the procedural steps for negotiating and submitting remedies? Can remedies be proposed at any time throughout the review process?
The notifying parties may present commitments to the Directorate of Competition of the CNMC:
- in Phase I, within 20 days of filing the notification; or
- in Phase II, within 35 days of the decision of the CNMC to initiate Phase II.
The Directorate of Competition will communicate the commitments to the Council and analyse them. Moreover, the Directorate of Competition can request modification of the proposed commitments if it considers that they are insufficient to eliminate the potential concerns deriving from the transaction.
During Phase I, the commitments will be accepted only if the relevant competition concern is clearly identified and can easily be remedied.
The CNMC must analyse any commitments and proposals to modify commitments submitted within the specified deadlines.
If the notifying parties offer commitments, the maximum period for the CNMC to adopt and notify a decision will be extended (see question 4.1).
5.3 To what extent have remedies been imposed in foreign-to-foreign transactions?
To our knowledge, no remedies or prohibition decisions by the CNMC have been imposed on pure foreign-to-foreign transactions, where none of the parties had a physical presence in Spain.
6.1 Can the parties appeal the authority's decision? If so, which decisions of the authority can be appealed (eg, all decisions or just the final decision) and what sort of appeal will the reviewing court or tribunal conduct (eg, will it be limited to errors of law or will it conduct a full review of all facts and evidence)?
Decisions of the Council of the National Markets and Competition Commission (CNMC) may be appealed by the notifying parties or any other interested party before the Court of Appeal within two months of the date following notification of the decision. The Court of Appeal can undertake a full review of the administrative proceeding, taking into account all facts and evidence.
Judgments of the Court of Appeal may be further appealed in cassation before the Supreme Court. The Supreme Court cannot review the assessment of facts carried out by the Court of Appeal and will analyse errors of law only.
Further, decisions of the Council of Ministers may be appealed before the Supreme Court within two months.
6.2 Can third parties appeal the authority's decision, and if so, in what circumstances?
Third parties can appeal the CNMC's decisions before the Court of Appeal, provided that they can prove that they have a legitimate interest in the case.
7 Penalties and sanctions
7.1 If notification is mandatory, what sanctions may be imposed for failure to notify? In practice, does the relevant authority frequently impose sanctions for failure to notify?
In Spain, the implementation of a transaction that is subject to merger control without authorisation (whether express or tacit) from the National Markets and Competition Commission (CNMC) is considered a serious infringement. The notifying parties may be fined up to 5% of their total turnover (at a group level) in the year preceding the imposition of the fine.
The CNMC frequently imposes sanctions for failure to notify; however, to date, the amount of such fines has been relatively low. The latest fines imposed by the CNMC for this reason were those imposed in 2019 in Case SNC/DC/093/19 Grupo Nufri (€12,800) and in 2017 in Case SNC/DC/0074/16 Consenur (€20,000).
In such cases, the CNMC may also request the notifying parties to notify the transaction within 20 days of receipt of the request. Failure to notify the transaction within this deadline constitutes a minor infringement. As a result, in addition to the fine for failure to notify before implementing the transaction, the CNMC may impose a fine of up to 1% of the notifying parties' total turnover (at a group level) in the preceding year. The CNMC may also start merger control proceedings ex officio.
7.2 If there is a suspensory obligation, what sanctions may be imposed if the transaction closes while the review is ongoing?
The implementation of a concentration that is subject to Spanish merger control before express or tacit authorisation has been rendered is considered a serious infringement. The notifying parties may be fined up to 5% of their total turnover (at a group level) in the year preceding imposition of the fine.
The notifying parties may request the CNMC to waive the standstill obligation (see question 3.8).
7.3 How is compliance with conditions of approval and sanctions monitored? What sanctions may be imposed for failure to comply?
Breach of commitments and/or conditions that have been agreed with the CNMC is considered a very serious infringement. The infringing party may be fined up to 10% of its total turnover in the year preceding imposition of the fine.
In addition to this fine, the CNMC may impose coercive fines of up to €12,000 per day in order to compel the infringing party to comply with the commitments or conditions set out in its decisions.
8 Trends and predictions
8.1 How would you describe the current merger control landscape and prevailing trends in your jurisdiction? Are any new developments anticipated in the next 12 months, including any proposed legislative reforms?
Although the average duration of Phase I is 20 days, the Spanish merger control system nonetheless lacks a certain agility when it comes to deciding on notification. The amount of information requested by the authority (even in cases where a transaction is notified using the short form) is remarkable. In addition, the National Markets and Competition Commission (CNMC) tends to extend the merger review phases (mainly in Phase II) through ‘clock stops' by issuing requests for information.
That aside, however, the vast majority of notified transactions are approved by the CNMC (even those with a higher level of complexity).
In Spain, no legislative reforms are currently envisaged, beyond:
- the transposition of the ECN+ Directive; and
- the possible split of the current CNMC into two independent regulatory bodies, one of which would be devoted to competition law enforcement.
In competition law forums in Spain, discussions are ongoing on how best to reform the Competition Act to ensure greater agility, efficiency and efficacy. Proposals include:
- expanding the circumstances in which short-form applications may be used and reducing the amount of information required for short-form applications in line with applicable standards in other European jurisdictions;
- temporarily delimiting the formal consultations that can be made to the CNMC; and
- better delimiting the deadlines for resolutions in Phase II (eg, making ‘clock stops' official).
9 Tips and traps
9.1 What are your top tips for smooth merger clearance and what potential sticking points would you highlight?
To obtain authorisation without major problems, it is highly recommended to submit a pre-notification to the National Markets and Competition Commission (CNMC). This allows the notifying parties to inform the CNMC of their intention to notify the concentration and confirm with the CNMC whether the information included in the draft filing is sufficient.
If a notification is filed with the CNMC without initiating pre-notification contact, this might take the CNMC by surprise; and depending on the complexity of the transaction, the CNMC might stop the clock by issuing several requests for information that could delay the expected implementation of the concentration.
Acknowledgement: co-authored by Andrea Díez de Uré.
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