Implementing Compliance Programmes as a new mitigating factor in fines related to competition infringements

Published on 27th Jan 2017

It is the first time that the National Markets and Competition Commission has taken into account the implementation of a Compliance Programme to lessen the fine imposed to a defaulting company within the framework of a sanctioning procedure.

The National Markets and Competition Commission (CNMC) gives a step forward in recognizing, in the decision of the sanctioning procedure S/DC/0544/14 Mudanzas Internacionales, the significance of implementing Compliance Programmes in relation to competition conflicts, as it reduces the calculation of the penalty imposed to one of the defaulting parties, as a result of the company having a Compliance Programme in place.

Said decision is mainly based on the advisability, as recognized by the CNMC, of carrying out an integrated and consistent interpretation of both criminal law and sanctioning administrative law, in such a way that the implementation of this type of Programme may be considered as an element to modulate the imposition of sanctions or, even under certain situations, as a mitigating circumstance.

Within the framework of said proceeding, in which the CNMC imposed sanctions to 15 companies operating in the international removal sector, given their involvement in a cartel that fixed prices, market share and exchange of sensitive information, one of the defaulting companies (AGS) requested that the court value, as a mitigating circumstance, that the company had implemented a Compliance Programme, even though such Compliance Programme had been implemented after the infringement proceedings had been initiated.

AGS built their defence on the analogical interpretation of article 31 quater of the Criminal Code, which considered that the existence of a Compliance Programme implemented before the beginning of the oral trial may be understood as a mitigating circumstance of its legal responsibility.

Although the CNMC did not accept the subsequent implementation of the Compliance Programme as a mitigating circumstance, as in accordance with the Criminal Code the necessary elements did not concur, that is, the confirmed facts were not enough to prove the prior existence of a robust and efficient Compliance Programme, it did positively value its later implementation by deciding to impose a lower sanction to said company.

In earlier decisions, the CNMC had recognized the encouraging fact that some companies were carrying out actions addressed at promoting, internally, awareness of competition regulations, and of preventing and avoiding their possible infringement, even going as far as, on some occasion, (file S/0482/13, Fabricantes de automóviles) considering the possibility of evaluating, as a mitigating circumstance, the implementation of said Programmes, provided that these were applied prior to the infringement. It bears mentioning that the Commission had previously considered as an element to modulate the sanction, the fact that the defaulting company had modified its conduct and had taken the steps to rectify it, even if it was during the sanctioning proceedings (file SNC/0036/15 MEDIASET), as it understood that it formally revealed the companies willingness to obey.

However, in this case, the CNMC, for the first time, applied these assessments regarding Compliance Programmes, and reduced the amount of the fine imposed to one of the defaulting companies due to the implementation of this type of Programme, even though CNMC did not consider it as a mitigating factor. It should be highlighted that in all the decisions that analyse this issue, the CNMC specially emphasizes the evaluation of the design and effectiveness of these Programmes, so that they do not appear as a mere improvement of the corporate image, proving the importance of having a proper strategy and later evaluation.

All of which highlights the importance of having and implementing an effective and verified regulatory Compliance Programme, as well as leaving the door open, after said decision was issued, to seeing reflected, hopefully in the near future, the effectiveness that these Programmes may have once applied to other branches of the administrative law, even considering them as an exculpatory circumstance of legal responsibility.

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* This article is current as of the date of its publication and does not necessarily reflect the present state of the law or relevant regulation.

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