On July 26, the National Commission for Markets and Competition (Comisión Nacional de los Mercados y la Competencia or CNMC) issued a decision finding that 11 companies had participated in a cartel to increase the price of public contracts for the provision of IT services. According to the decision, the public administrations affected by the cartel were the tax authority (Agencia Tributaria), the social security system and the public employment service (SEPE).
After an investigation prompted by an anonymous complaint, and an oral hearing with the interested parties, the CNMC concluded that the companies shared customers, fixed prices and commercial conditions, and exchanged sensitive commercial information in their offers of IT and data processing services to national government agencies.
Specifically, the CNMC found that the companies reduced competition in public tenders since at least 2005 by, among other actions, creating consortia (UTEs) for certain bids (that they would dissolve once the project was complete), and outsourcing work to other companies which agreed not to participate in the tenders.
During the investigation phase, the companies made different allegations regarding the implementation of compliance programs, which were considered by the CNMC as not sufficient to mitigate the sanctions, or the infringement of the rights of defense due to the late initiation of proceedings against some of the undertakings, which the authority rejected.
As to the effects of the conduct, the CNMC found as well that the competitive harm also led to implicit “non-aggression pacts” regarding the human resources of the companies involved in the cartel, pacts that according to the CNMC resulted in salary levels below those that would be expected in a competitive market.
In light of the above, the CNMC has declared that the firms breached Article 1 of the Spanish Law for the Defense of Competition and Article 101 of the Treaty of the Functioning of the European Union, and imposed total fines amounting to €29.9 million, the highest being of €13.5 million on Indra, and €6 million on Software AG, since those companies were considered instigators of the cartel.
The decision also includes a dissenting vote issued by one of the CNMC’s Council members, María Pilar Canedo, stating that there was evidence during the investigation that the public administration may have acted as a facilitator of the cartel. Ms. Canedo considered that the CNMC should have therefore initiated formal proceedings against the administration and possibly imposed a fine, not so as to exclude the responsibilities of the undertakings (which were aware of the unlawful nature of their behaviour, as the CNMC stated), but in order to reinforce the deterrent purpose of the resolution.
On another note, it has been reported that the CNMC has also contacted the competent authorities in relation to suspicions of criminal offenses by the companies that participated in the cartel.
The decision by the CNMC is available (in Spanish) here.