On 7 November 2018, the Spanish Competition authority ("CNMC") published a set of provisional guidelines on the calculation of fines for infringements of competition law.
These guidelines are aimed at clarifying the method applied by the CNMC for the calculation of fines after the Spanish Supreme Court declared the fining methodology previously followed by the authority to be partially illegal. In particular, back in 2015, the Supreme Court held that the imposition of fines amounting to 10% of the company's total turnover must not be imposed as a general rule but shall be reserved for the most serious infringements. The Supreme Court added that for less serious infringements, fines should be set at a lower level and should be proportionate to the gravity of the infringement.
The newly adopted guidelines describe the two-step methodology now applied by the CNMC:
- The authority first establishes a base amount applicable to all companies involved in the infringement. Such amount will not exceed 60% of the total amount of the fine and will be calculated on the basis of: (i) the nature of the anti-competitive conduct; (ii) the characteristics of the affected markets; (iii) the market share of the undertakings involved; (iv) the geographical scope of the infringement; (v) the effects on consumers and other market players; (vi) the amount of illegal profit gained; and (vii) the existence of compliance measures or programmes (if applicable to all companies involved).
- The remaining part of the fine is individually calculated for each of the companies involved in the infringement in view of: (i) the duration of the participation of each company in the infringement; (ii) the share of each company within the total turnover affected by the infringement (except for abuses of dominant position); and (iii) the applicability of aggravating or mitigating circumstances.
In addition, in order to ensure that the fines are proportionate, the CNMC subsequently calculates a proportionality limit over which no fine can be imposed. For such purpose, the CNMC estimates the amount of profit gained by each of the undertakings concerned during the infringement and, as a deterrent factor, multiplies such amount by a figure ranging between 1 and 4, depending on the duration of the infringement and the size of the infringing company.
In its guidelines, the CNMC recalls that the above-described methodology has been upheld by the Spanish High Court (Audiencia Nacional) in several recent judgments.
Finally, the CNMC points out that, although these provisional guidelines will generally be applied, the CNMC may depart from them when their application appears impossible or unreasonable in light of the circumstances of the case or when the leniency programme applies.
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