Article 63.2 of the Spanish Competition Act (15/2007 of 3 July on the Defence of Competition, the SCA) provides that, in addition to the fines that may be levied on legal entities for infringing competition rules, the Spanish Competition Authority (the Comisión Nacional de los Mercados y la Competencia, the CNMC) may impose independent fines of up to EUR60,000 on the legal representatives or top executives of the companies or trade associations.
Since the CNMC indicated in its action plan for 2016 its willingness to fine legal representatives and top executives of companies and trade associations participating in infringements of Spanish competition law, it has fined a total of 20 individuals within the framework of five different sanctioning procedures1. In addition, the names of those individuals have been made public as part of the publication of the fining decisions.
1. Are the fines imposed on legal representatives and top executives standalone or ancillary to the fines levied on the companies or trade associations to which they belong?
Fines imposed on legal representatives and top executives are independent of those that the CNMC can levy upon companies or trade associations but are ancillary to these latter fines.
This means that a legal representative or a top executive can only be fined if it is considered that the company or trade association to which he/she belongs has infringed Spanish and EU competition rules.
2. What degree of involvement in the infringement is required for the CNMC to be able to fine a legal representative or a top executive?
Both the CNMC and Spanish Appeals Court equivalent (the Audiencia Nacional) have considered that in order to be fined the involvement in the wrongdoing of the legal representative or the top executive must be "relevant" or "determinant".
In this respect, when the CNMC has fined legal representatives or companies’ or trade associations’ top executives it is because they had had a direct and active participation in the configuration, design and implementation of the alleged anticompetitive agreements/practices, to the extent that their role was essential for the company or trade association to be able to carry them out.
The Audiencia Nacional has confirmed that the involvement in the agreement/practices needs to be relevant and decisive. It has indicated that Article 63.2 of the SCA has to be interpreted as requiring the legal representative or top executive to participate as a "co-author" or "necessary cooperator" (using Criminal Law terminology) in order to be able to fine him/her. Conversely, it has considered that merely having knowledge of the alleged infringement or an "ancillary" or "second level" involvement, which may resemble the concept of the “accomplice” (again using Criminal Law terminology), is not sufficient to be found liable and, consequently, cannot lead to a fine2.
3. Can any individual acting on behalf of an infringing company or trade association be fined for this reason by the CNMC?
No. The Audiencia Nacional has indicated that only the two categories of individuals provided in Article 63.2 of the SCA can be fined, namely:
• Legal representatives, a concept that it is clearly defined in the Spanish commercial rules, and that, consequently, has to be interpreted narrowly. As a result, this category of individual cannot be extended to include, for example, a de facto director or a mere representative who attends a meeting on behalf of the company without being its official legal representative3; and
• Members of an executive body that intervened in the anticompetitive agreement or decision, a concept that refers to "any that are part of [the company or trade association] and which could adopt decisions that set, predetermine or manage its behaviour”4. This concept has included, to date, top executives such as a chairman of a company, the secretary of the board of directors, a general manager, a financial and human resources director, a technical director, the head of a business unit or the head of an office that participated in the adoption of the alleged anti-competitive agreements or decisions5.
For this reason, the Audiencia Nacional has annulled two fines imposed by the CNMC on two employees of a trade association because their involvement as technical directors or secretaries of the association was considered to be incidental (as they only received certain information, called and attended meetings but did not have the possibility of voting)6.
4. What are the criteria taken into account by the CNMC for the calculation of the fine imposed upon the legal representatives or top executives?
The SCA does not provide for a specific methodology or specific criteria for the calculation of fines for legal representatives or top executives. For the time being, the methodology followed by the CNMC to calculate the said fines has had two steps:
• First, the CNMC takes into account the so-called "objective" criteria such as the gravity and other characteristics of the infringement carried out by the company or trade association to which the legal representative or top executive belongs; and
• Secondly, the CNMC takes into account the so-called "subjective" criteria such as the duration of each representative’s or executive's participation, their specific position (i.e. whether they hold a first or second level position), the type of entity for which they work (i.e., a company or a trade association) and, on the basis of these criteria, it then adjusts the amount of the fine to be imposed on each legal representative or top executive.
5. Are the names of the fined legal representatives or top executives made public?
The names of the legal representatives or top executives are not made public when the infringement proceedings are opened, but they become public when the CNMC’s fining decision is published, provided that they are fined.
The Audiencia Nacional has maintained that the publication of the identity of the fined individuals is justified because of the provisions of the SCA and Spanish Act 3/2013, of 4 July creating the CNMC, which provide for the publication of the fines and resolutions of the CNMC and constitute a legitimate limitation to the fundamental right to honour, privacy and self-image, as well as to data protection rules.
That said, the Audiencia Nacional has also made it clear that, in the event that the fine imposed on the legal representatives or top executives is annulled, the individual has a right to expect that the CNMC shall grant the same degree of publicity to that pronouncement as to the sanctioning decision. This obliges the CNMC in practice to publish the judgement on its Website along with a public rectification7.
6. Is there any way for the legal representatives and top executives to avoid liability?
Yes, there is. Article 63.2 of the SCA provides that no fine can be levied on those legal representatives or top executives of the infringing company or trade association that:
•Did not attend the meetings at which the anticompetitive agreements or practices were adopted; or
•Voted against or saved their votes which related to such agreements or practices.
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1. See CNMC Decisions in cases: (i) S/DC/0504/14 AIO; (ii) S/DC/0519/14 Infraestructuras Ferroviarias; (iii) S/DC/05145/15 Hormigones de Asturias; (iv) S/DC/0555/15 Prosegur-Loomis; and (v) S/DC/0584/16 Agencias de Medios.
2. See the Judgements of the Audiencia Nacional of 25 May 2018 (Case Fund. Rights 8/2016) and of 29 May 2018 (Case Fund. Rights 6/2016).
3. See the Judgements of the Audiencia Nacional of 20 April 2017 (Case Fund. Rights 9/2016); of 14 September 2017 (Case Fund. Rights 10/2016); and of 25 May 2018 (Case Fund. Rights 8/2016).
4. Ib. Idem, footnote 3. See similarly, Judgements of the Audiencia Nacional of 27 February 2018 (Case Fund. Rights 5/2016); of 21 May 2018 (Case Fund. Rights 7/2016).
5. Ib. Idem, footnote 1.
6. See Judgements of the Audiencia Nacional of 25 May 2018 (Case Fund. Rights 8/2016) and of 29 May 2018 (Case Fund. Rights 6/2016).
7. See Judgements of the Audiencia Nacional of 25 May 2018 (Case Fund. Rights 8/2016) and of 29 May 2018 (Case Fund. Rights 6/2016).
