State Action Doctrine in Spain: Treatment of State Anticompetitive Restrictions

Posted by D. Daniel Sokol

Francisco Marcos of Instituto de Empresa Business School (and a judge of the Tribunal de Defensa de la Competencia de la Comunidad de Madrid) discusses State Action Doctrine in Spain: Treatment of State Anticompetitive Restrictions.

ABSTRACT: The exemption of application of antitrust prohibitions when they are introduced in legislative rules is established in the new Defence Competition Act 15/2007, of July 3rd 2007, in similar terms to those contained of the prior Defence Competition Act 16/1989. The drafting of section 4 of Defence Competition Act 15/2007 improves the technical quality of its predecessor, having extended its coverage to all prohibitions of restrictive conducts of competition, including abuse of dominant position and falsification of free competition through unfair practices. Besides, it excludes from its coverage all anticompetitive conducts that are not contained or foreseen in legislative rules or that stem from the performance of the public Administration, as well as the anticompetitive actions of the state-owned companies lacking legislative support.

However, section 4 contains an inadequate and unnecessary reference to the application of the Community Law (which was first introduced in the 1999 reform of the Defence Competition Act) that, taken to his its last consequences, questions the theory of the "double barrier" and the own existence and sense of the Spanish legislation of Defence competition.

From another perspective the paper underlines how the new Defence Competition Acts sets the foundations for correcting the mistakes committed in the previous practice of the Defence Competition Court in its struggle against the administrative rules and acts that, without legal coverage, introduced or contained restrictions to the competition. Nowadays the National Competition Commission and the corresponding regional authorities cannot un-apply or declare the nullity of these acts and bylaws themselves but the possibility of challenging them before the competent jurisdiction is given (section 13.2).