What is the CNMC?
The National Commission on Markets and Competition (CNMC in Spanish) is an entity that promotes and defends proper functioning of all markets, in the interest of consumers and businesses.
It is a public entity with its own autonomous legal status. It is independent from Spain's central government but is subject to parliamentary control. It began its operations on 7 October 2013.
- What is its origin?
- Its objective
- What are its functions?
- What is its structure?
- How does it operate?
- What are the benefits of competition and efficient regulation?
- How does oversight of the regulated sectors take place?
- What can the CNMC do to improve competition?
- Some anti-competitive actions and practices
- How is a complaint submitted?
What is its origin?
In 2013, the Spanish Parliament decided to merge the regulatory entities and the authority on competition in order to ensure legal security and institutional trust, while also preventing unnecessary duplication of the oversight performed by each entity and contradictory decisions on the same subject. With the reform of the institutional architecture of the regulators, an attempt was also made to take advantage of economies of scale and regulate the sectors being administrated by adopting an integrated and multifaceted vision from the perspective of regulation and defence of competition. This was done in order to adapt this regulation to the changes that have taken place in the economic environment, for the benefit of consumers.
The CNMC was created in 2013 by integrating the following six entities: The National Commission on Competition, the National Energy Commission, the Commission on the Telecommunications Market, the National Commission on the Postal Sector, the State Council on Audiovisual Media, and the Committee on Railway and Airport Regulation.
The origins of these entities was diverse: the National Commission on Competition (CNC in Spanish) was created by merging the Tribunal for Defence of Competition (created in 1963 and strengthened under the Law on Competition of 1989) and the Service for Defence of Competition, through Law 15/2007 on Defence of Competition. In 1996, the Commission on the Telecommunications Market (CMT in Spanish) was created, and in 1998 the National Energy Commission (CNE in Spanish) followed, absorbing the National Commission on the Electrical System (CNSE in Spanish, 1994). In 2010 the State Council on Audiovisual Media (CEMA in Spanish) was created, and the National Commission on the Postal Sector (CNSP in Spanish) began operations in that year as well. In 2011 the Commission on Economic Regulation of Airports (CREA in Spanish) was created.
The appearance of this plurality of regulatory entities reflected liberalization of these network-oriented industries, as well as the end of state monopolies and the need to adapt Spanish economic regulations to European ones
Previous Commissions merged to form the CNMC
The CNMC's main objective is to promote and defend proper functioning of all markets, in the interest of consumers and businesses.
The CNMC is subject to parliamentary oversight, which ensures its independence and increases legal security.
What are its functions?
What is its structure?
The CNMC exercises its functions through two governing entities: the Council and the President, who is also president of its Board.
The Council is the governing body that takes decisions. This Council is made up of 10 members appointed by the government, after nomination by the Minister of the Economy. These are respected individuals with professional competence in the Commission's area of action, and they must be approved by the corresponding Committee from Spain's Congress of Deputies. These members have a 6-year, non-renewable mandate and are subject to a strict system used to prevent conflicts of interest.
The Council can act in Plenary Sessions or as smaller Committees. For this purpose it is organised into two committees: one dedicated to subjects involving competition (The Committee on Competition) and second dedicated to oversight of the regulated sectors (Committee on Regulatory Oversight). The Plenary is made up of all members of the Council and is presided over by the President.
In addition, the CNMC has four investigative offices (Competition; Energy; Telecommunications; and Audiovisual Sector, as well as Transport and Postal Sector).
How does it operate?
The CNMC acts according to the principles of independence, legal security, and transparency. This is the foundation behind the system used for the Council's operation as Plenary and Committees, with a distribution of subject matters that reserves the most complex issues for the Plenary, when it is necessary to join criteria in order to offer a balanced and comprehensive solution for the problems being addressed, in order to benefit the consumers and businesses
The functioning of the CNMC is adjusted to the regulations of the European Union, especially in the telecommunications and energy sectors, where greater integration of the EU's Single Market is being pursued. For this purpose, the Commission regularly and periodically collaborates with other supervisory authorities from the European Union, as well as with cooperating agencies from the European regulators on the subject of energy and electronic communications.
The Office on Competition has been assigned the investigatory functions described in the Law on Defence of Competition, and it continues to exercise these functions in order to maintain the consistency and horizontal nature of the regulations on defence of competition.
Both the Office on Competition and the three remaining Investigatory Offices (Office on Energy, Office on Telecommunications, and Office on the Audiovisual Sector, as well as the Office on Transport and Office on the Postal Sector) exercise their investigatory and oversight functions for the sectors, independently from the Council.
What are the benefits of competition and efficient regulation?
For you as a purchaser and consumer of goods and services, competition among sellers allows a greater variety of offers to be made available, with higher quality and at lower prices..
If you are an entrepreneur, free competition ensures that the success of your business will depend upon your skills and efforts, not upon obstructions or limitations that may be imposed by others companies with more power in the market
In addition, as a citizen, competition means that domestic products can be more competitive worldwide as well as in your own country. Efficient regulation corrects errors in the markets and provides assurance that the economy can develop to its full potential.
How does oversight of the regulated sectors take place?
Along with the functions for defence of competition that are comprehensively assigned to the CNMC, this same entity also carries out functions that are unique, in relation to specific sectors and regulated markets, where application of the regulations on defence of competition are found to be insufficient. This is done in order to ensure their proper functioning, and in the end, the existence of effective competition. These sectors or areas include the following: electronic communications and audiovisual communications, the electricity and natural gas markets, the postal sector, the airport sector, and certain aspects of the railway sector
The functions of the CNMC in relation to the cited sectors have traditionally been performed by the regulatory entities specific to those sectors, since they require independence with respect to the public and private interests that could converge. In particular, they include supervision and control functions, as well as broad functions for resolving disputes.
What can the CNMC do to improve competition?
- Investigate and sanction anti-competitive practices, either on its own initiative or after receiving complaints
- Produce recommendations to improve the conditions of competition in the various markets
- Authorise corporate concentrations or mergers and perform follow-up monitoring for these
- Supervise the conduct of companies operating in regulated markets, initiating and resolving procedures for sanctioning practices that are contrary to regulation of the economic sectors, in cases where applicable
- Provide consultation and non-binding recommendations to the government before regulations are approved. For this reason, initiatives such as the “Dialogues on Compliance” have been created, where the public and private sectors share best practices in relation to compliance with the laws
- Promote the values of competition and efficient regulation. For this reason, initiatives such as the “Dialogues on Compliance” have been created, where the public and private sectors share best practices in relation to compliance with the laws
- In March 2016, the CNMC put into practice its Register of Stakeholders on a voluntary basis, since it lacks a legal mandate for imposing this. This allows special interest groups to participate and adhere voluntarily to the ethical guidelines that regulate its relationships with this institution
- Contribute to guaranteeing the unity of the market, by providing a special administrative dispute procedure in defence of this market unity, in cases where applicable
Some anti-competitive actions and practices
- Multiple companies agree not to compete on prices, setting the same purchase or sale prices in an abusive manner
- Without justification a company applies unequal purchase prices or other terms and conditions to various purchasing companies, putting some of these at a competitive disadvantage versus their competitors
- A company forces a buyer to accept obligations that have no relation to the sale, such as not purchasing from a competitor or not purchasing another product, etc
- Without justification a company establishes exclusive sales territories for its distributors
- One or more companies put artificial obstacles in the way of new competitors trying to enter the market
- A government entity issues rules or approves resolutions that weaken or impede market unity
How is a complaint submitted?
A complaint or claim regarding anti-competitive practices, or violation of the regulations that operators in markets regulated by CNMC oversight must follow, can be submitted by any individual or legal entity, whether public or private, domestic or international, as long as such parties have knowledge of a violation of the regulations monitored by the CNMC
The claim must be submitted in writing to the registry of the CNMC, including a precise description of the act or acts that the person has knowledge of and which are allegedly anti-competitive or contrary to the regulations for the sector, also identifying the persons responsible and providing any evidence available