20 March 2015

CNMC fines Repsol €8.75 million for non-compliance with a decision

On 16 March 2015, the Spanish Competition Authority (CNMC) announced its decision to fine the integrated global energy company Repsol for non-compliance with an earlier 2009 decision taken by the now defunct Comisión Nacional de Competencia (CNC).

In 2009 the Spanish watchdog issued a decision fining Repsol, Cepsa and BP for indirectly fixing retail prices through provisions in the fuel supply contracts with petrol station owners that linked the fuel purchase price to a maximum or recommended retail price at the petrol station.  The CNC considered that such practices constituted a breach of Article 1 of the Spanish Competition Act 15/2007 and of Article 101 TFEU, affecting both intra-brand and inter-brand competition.

According to this decision, Repsol, as well as Cepsa and BP, should change their contracts with petrol station owners to provide services under a re-selling regime or a commission/agency framework under which commercial risks are assumed, to turn the counterparty into an interdependent business.

Since 2010 the Spanish watchdog has been monitoring the compliance of this decision and due to evidence of non-compliance with the decision regarding exclusive supply contracts signed by Repsol and third parties, it decided to open infringement proceedings on 20 December 2013 for a breach of Article 62 of the Spanish Competition Act 15/2007, which states that non-compliance with a CNMC decision is to be considered a very serious infringement.

Previously, Cepsa and BP Oil were fined €2.5 million and €700,000 each on 6 February 2015.  With regard to Repsol, the proceedings were put on hold due to an appeal regarding procedural issues.  In addition, it is worth noting that Repsol recently challenged the President and two members of the CNMC’s Chamber of Competition who were dealing with the case, alleging a conflict of interests and public enmity, and referring to a recent statement of the President during a conference  "…we have ensured that petrol prices are lower than a coffee at Starbucks”.  The plenary assembly of the CNMC’s Council unanimously rejected this challenge on 20 February 2015.  The watchdog also rejected the legal argument raised by Repsol, considering that Act 11/2013 (on Hydrocarbons) does not exempt the company from the 2009 decision being enforced.

This new decision ends the administrative proceedings and Repsol now has the right to challenge it before the Audiencia Nacional, the judicial body in charge of reviewing administrative decisions issued by the CNMC, within two months of receiving the notification of the fine.

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