The tender will determine the scope and duration of the ban on employment of sanctioned companies

Plenary session of the Council of the National Commission for Market and Market Competition (CNMC) approved the communication to determine the scope and duration criteria that will be used for imposition Sanctioned ban on contracting with the public administration for these companies due to violation of competition law.

This was confirmed by the president of the organization, Cani Fernández, during a conference organized by the Menéndez Pelayo International University and the Association of Economic Information Journalists.

As explained, with the approval of this communication, in all files of the Competition It will be the CNMC that will apply the duration and scope of the ban to the contract. with Law on Contracts in the Public Sector Currently, if a company violates the regulations, reporting the violation automatically lifts the ban on contracting with the public sector.

However, Fernández explained that this ban can be implemented in two ways. One of the possibilities is for the Competition to determine the duration and scope of the sanction up to a maximum of three years, or for the Supervisory Board to issue a report to the head of the Ministry of Finance, who will be the leader who will impose the final ban.

From the moment this ban came into force with the latest Law on Public Sector Contracts, in 2015, the CNMC decided to choose this second path. However, the president of the organization indicated that this the procedure proved to be “ineffective”. “It doesn’t apply,” Fernández said.

And that, as the president of the regulator reminded, The National Court appealed the sanctions imposed on the companies by the Contracts Committee, so the sanction is suspended as a precaution. In addition, according to the criteria of the State Court, in case the sanction is final, the ban covers all public sector entities.

Cani Fernández: “That company will not be able to conclude a contract with absolutely anyone”

“That company will not be able to enter into contracts with absolutely anyone. If it is us, we can modulate the scope of the ban and we can say that the ban will affect these products the most in this geographic market and in terms of the economy,” explained Fernández.

According to the organization’s leader, this gives companies greater transparency and clarity because, if they want to appeal the penalty, they know in advance which organizations, companies or institutions they are prohibited from contracting with and for how long.

Thus, from now on, the CNMC will be the one to determine the scope and duration of the ban on engaging the penalized companies, and will do so based on the nature of the offense and the potential impact of the ban on the markets.

In addition, the CNMC will include the duration and scope of the bans in the resolution of disciplinary proceedings starting from the entry into force of Announcement 1/2023.

The new system will make it possible to determine the geographic and product scope of the ban and its duration from the very beginning, even if its effectiveness is later suspended by a court.

“The measure aims to increase legal certainty and strengthen compliance programs and the culture of market competition in companies,” the CNMC said in a statement.

Explore the low deposit fee

Cani Fernández also asked the political parties to implement a package of tools that enable organization investigate cases of possible collusion, What could happen to interest on bank deposits? according to various banks The Spaniards. As he explained, currently the CNMC does not have the capacity to investigate the profitability of these deposits.

This issue has caused a great deal of discussion in recent days, since on the one hand, the economic vice-president of the Government, Nadia Calvino, He demanded that the banks “adequately compensate the Spaniards”. For his part, the president, Mr CaixaBank, Jose Ignacio Goirigolzarrithe minister reminded that “banks decide on prices”.

Now the CNMC has given its opinion. In particular, its president indicated that the body would have the ability to act in case there are doubts about price signaling, what happens when banks coordinately, giving irregular signals, decide not to withdraw deposits until a certain date; or in a dominant position of the bank.

However, none of these cases occur in the Spanish market, where there is a “transparent” market. Of course, he pointed out that precisely because of this transparency, where it is easy to know the compensation that each bank gives on deposits, it is not necessary to “or negotiate”.

It should be kept in mind that this tacit collusion refers to a situation where companies coordinate indirectly around a product or service, that is, through their behavior on the market. “Just observing what others do is enough for me to make decisions. According to the jurisprudence of the European Union and Spain, this is called intelligent adaptation to the behavior of its forces,” Fernández quipped.

And that is that, although it is “difficult” for her to think that there is no bank that wants to win customers with bank deposits, the president of the CNMC indicated that if there are no secret contacts or agreements between banking entities, competition cannot work. We don’t have a tool […] It’s a loophole in our system.”he indicated.

However, Fernández commented that in other countries, such as the United Kingdom or Germany, legislative changes to introduce a number of market investigations in the field of market competition are being discussed in the respective parliaments. These investigations are guaranteed to provide the necessary information to the competent authorities, as the company may be fined for not providing documentation.

So, these researches, also known as a new competition toolit could be allowed to fight against cases of tacit collusion, i.e. there is no firm collusion, but this happens in practice.

Sanctions for participants in cartels

Cani Fernandez has confirmed that it will require the next government to roll back all the body-related amendments included in the Body of the financial clienta bill which was rejected in the Senate because of the progress of the election and the consequent dissolution of the Cortes.

In a speech at a conference organized by the Menéndez Pelayo International University and the Association of Journalists of Economic Information (APIE), Fernández pointed out that among these changes was the amendment of the Law on Market Competition in order to expand to a maximum of 50 million and a minimum of 1 million euros in fines for companies participating in the cartel. Also increased here from 60,000 to 400,000 euros fine to the managers who participated.

Fernández emphasized the need to restore another amendment, also included in the Financial Client Authority, which allowed the agency to achieve greater independence in the management of its most responsible positions, so that they can be taken by agency employees, and not only officials of subgroups A1.

The government has used the processing of this regulation to satisfy some of the demands that the organization has been making for years. It is about extending the general term of the disciplinary procedure from 18 to 24 months, while the term of the second phase of concentration supervision is extended from 2 to 3 months.

However, the advance of the general election meant the dissolution of the Cortes Generales, causing the bill to create a new financial body to die in the Senate. “When the government is formed, I will return those amendments,” he added.