Spain Raimundo Ortega Jones Day Regulation channels of - PDF document

55 Spain sjc 212-214 8/9/04 9:23 am Page 212 S PAIN Spain Raimundo Ortega Jones Day Regulation channels of distribution. This information would be processed and Since 1989 the Act on the Defence of Competition (Ley 16/1989 de aggregated by the notary who would submit it to the Association for Defensa de la Competencia, ‘LDC’) regulates the application of com- distribution among the members. In addition, data concerning the petition law in Spain. The LDC adopted material provisions identi- hectolitres of beer produced or imported, as well as a breakdown cal to those existing in EC Law within a system of administrative per company, would be submitted by each member directly to the enforcement. In addition, private enforcement in Spain has been dif- Association for release on the Association’s web page. ficult for a variety of reasons related, mainly, to the perceived pub- The TDC decision to deny authorisation was based on the struc- lic nature of the rules. ture of the market. The high degree of concentration in the Spanish However, the application of the new system established in the market for the production of beer (in 2000 the three major brew- EC Regulation 1/2003 anticipates significant changes in Spain. First, eries had a market share of 83 per cent) made the aggregation of data as from September 2004 the new commercial courts will be able to useless and would highly increase the level of transparency of the apply Articles 81 and 82 of the EC Treaty in private litigation. An market on the production capacity of the competitors. The TDC took increase of private enforcement of competition law in Spain regard- into account the high degree of geographic market specialisation ing the validity of agreements and the recovery of damages arising among the breweries. In most cases, this led to a duopoly situation from restrictive practices is expected. This is particularly the case in geographic markets. because Spanish courts have been rather flexible in the appreciation In addition, the TDC did not accept the argument that some data of an effect in trade. was also available through independent market researchs (ie AC In addition, the government has announced its intention of Nielsen) because according to the TDC, the information obtained reforming the LDC in order to adopt a system similar to that of EC by these companies through questionnaires addressed to the brew- Regulation 1/2003. This will probably include the elimination of the eries was less accurate than the information obtained by the Associ- individual exemption system under the LDC and allow the courts to ation from the breweries. decide on the application of LDC, which, to date, has been a power Finally, the TDC rejected the Association’s arguments that the sys- reserved to the competition authorities. In addition, the government tem would benefit small breweries because it would provide them with is planning significant institutional changes such as the creation of a information on the market that would help them to better plan their new revamped competition authority strategies. Together with other considerations, the fact that some of the smaller breweries have cancelled their membership of the Association Recent cases led the TDC to reject the argument that the system would have increased Spanish Breweries Association: Beer production competition in the market between small and large breweries. statistics In order to fully understand the TDC’s opposition to the In December 2002, the Asociación de Cerveceros de España (Span- exchange of information system requested by the Association, it ish Breweries Association, ‘the Association’) applied before the Span- should be noted that the TDC opposed the mergers of ish competition authorities for an individual exemption to collect Heineken/Cruzcampo and Mahou/San Miguel in 1999 and 2000 data on production of beer between its members in order to produce respectively, although the Government ultimately decided not to trade statistics. By a decision dated 30 March 2004, the Tribunal de oppose either concentration, subject to certain conditions. Defensa de la Competencia (Competition Court, ‘TDC’) refused to ACS/Dragados : Fine for failing to notify a concentration grant the individual exemption. The Association devised a system to produce statistics of pro- In the case ACS/Dragados , the construction company ACS was fined duction and distribution of beer in Spain. Initially, each member of for carrying out the acquisition of control of Dragados before autho- the Association would submit to a notary public appointed by the risation from the competition authorities was obtained. On 18 Aprill Association the number of hectolitres of beer produced or imported 2002, ACS signed two contracts of sale of shares with the financial each month. Every two months the same information would be sub- institutions SCH and Banco Madesant, through which ACS acquired mitted with a breakdown of the kind of container used, type of beer 23.5 per cent of the share capital of Dragados. ACS notified this and brands. Every six months, each member would submit to the transaction on 14 May 2002 as the shareholding gave ACS exclu- public notary the hectolitres of beer produced or imported with a sive control over Dragados. The notification was made at the request geographic breakdown. The members would also submit to the pub- of the competition authorities, which had received a communication lic notary information on turnover, investment, marketing and spon- from ACS on19 April 2002 regarding the operation and considered sorship once a year. Finally, the members would also send the public that a concentration as defined in article 14 of the LDC, had notary a breakdown of hectolitres of beer produced or imported with occurred. The concentration was finally approved in the first phase. a breakdown according to their own and third party brands and On 22 April 2002 a proceeding was initiated against ACS for 212 The European Antitrust Review 2005