In recent weeks the Comisión Nacional de Mercados y la Competencia (CNMC) has successfully challenged local legislation restricting competition for vacation rentals in the Canary Island Courts and also started a similar action in Galicia.
The Canary Islands Courts annulled several articles of Decree 113/2015, of May 22, 2015 of the Canary Islands regulating vacation rentals of private properties which:
- Prohibited the rental of vacation properties in certain areas where hotels and tourist apartments operated,
- Prohibited the rental of individual rooms as opposed to whole properties, and
- Required owners wishing to rent out their properties to make a declaration to the administration and register the property.
The CNMC started proceedings after sending a preliminary request asking the Government of the Canary Islands to remove the articles concerned, before filing a complaint and economic report setting out the anticompetitive effects of the restrictions, the lack of proportionality and the inadequacy of the justification for them.
It was the second time that the Spanish Courts have upheld a challenge by the CNMC against administrative regulations containing measures restricting the vacation rentals sector after similar rules were annulled in Madrid in 2016.
The CNMC also recently sent a preliminary request to the Xunta de Galicia, seeking the removal of several articles of Decree 12/2017, of January 26, 2017, in relation to the regulation of apartments and houses for tourist accommodation and properties used as accommodation by tourists.
The CNMC requests that the Xunta remove obstacles to market access which unduly increase the cost of entry and reduce the number of operators. Specifically, the CNMC considers that the rules restrict competition in several respects:
- By prohibiting the renting of single rooms or of rental agreements for longer than three months,
- By requiring a prior administrative declaration by the owner of the property, almost as onerous as an authorization, and
- By imposing clearly excessive and disproportionate levels of technical standards to be met and minimum services to be provided.
These latest cases are part of the active role played by the CNMC in the wider area of competition advocacy since it was granted, by Law 3/2013, the power to challenge any administrative regulation or act that may create a restriction of effective competition. Local rules concerning vacation rentals have been one of the areas, together with transport cases, where the CNMC has been especially active in challenging legislation, although it is also active in a number of other ways including sector investigations and reports on proposed legislation.