This post is also available in: Español
On February 9, 2021, the Spanish National Commission for Markets and Competition (“CNMC”) issued a decision agreeing to terminate the investigation proceedings opened against the Official College of Dentists and Stomatologists of the First Region (“COEM”) and the Spanish General Council of Dental Professional Associations (“CGCOE”) with commitments. The CNMC initiated investigation proceedings for an advertising campaign that allegedly disparaged branded dental clinics, considering these practices to be anticompetitive in contravention to articles 1(1) of the Spanish Law on the Defense of Competition (“LDC”) and 101 of the Treaty on the Functioning of the European Union (“TFEU”).
The investigation follows several practices by the COEM and CGCOE, including:
- Launching advertising campaigns against low-cost dental chains (using slogans like “Your mouth is worth more”; “Seek quality dentistry: your mouth is not on sale”;“Do not be cheap when it comes to opening your mouth”; or“You get what you pay for”);
- Making public statements discouraging customers from using low-cost dental services, claiming that they are unreliable and low-quality, and that their advertising is misleading;
- Unreasonably refusing to post job offers from certain low-cost clinics on COEM’s employment portal; and
- The communication to regional associations of COEM’s and CGCOE’s statement with regard to these low-cost services, including the invitation to adopt the same position on their side.
Due to these practices, Dentoestetic Centro de Salud y Estética Dental, S.L. filed a complaint before the CNMC in 2015. In April 2015, the CNMC initiated preliminary proceedings, and in 2017 Dental Global Management S.L. filed another complaint against the CGCOE for practices allegedly in breach of articles 1 and 3 LDC.
In June 2019, the CNMC formally opened an investigation and, one month later, both COEM and CGCOE requested the initiation of proceedings to terminate the investigation with commitments under the specific procedure provided by article 52 LDC.
CNMC decision and professional associations’ commitments
After an 18-month negotiation with the CNMC and a second round of commitments proposed by COEM and CGCOE, in February 2021, the CNMC terminated the investigation proceedings with commitments.
As a result of the agreed commitments, the professional associations under investigation were required to:
- Remove from their social media profiles and accounts any references or links to the advertising campaigns reported to the CNMC;
- Refrain from making any public statements and from promoting or coordinating advertising campaigns suggesting a preference for a specific business model;
- Manage the employment portal of the COEM under the principle of neutrality to all members; and
- Report all their communication activities to the CNMC.
Additionally, the CNMC required the professional associations to send the CNMC decision to all their affiliates and to post it on their websites and social media profiles.
The CNMC will monitor compliance with the commitments through the mechanisms agreed with the parties. Non-compliance with the commitments qualifies as a serious competition law infringement and could lead to a fine of up to 10% of the infringer’s turnover.
Competition authorities and professional associations
This is not the first time competition authorities have decided on a case in the dental market. Recently, the Basque and Catalan competition authorities also terminated competition proceedings with commitments.
This case evidences that the CNMC and other competition authorities closely monitor professional and business associations’ activities. In our blog, we show that business associations are in the spotlight of competition authorities. The CNMC has fined various professional associations more than 10 times since 2015 (see files SACAN/31/2013, S/0491/13, S/0299/10, SACAN/31/2013, SAMAD/02/14, SAMAD/09/2013, SAMAD/09/2013 II, S/DC/0516/14, S/DC/0560/15, S/DC/0587/16, SAMUR/05/2017, SAMAD/04/2016). In most cases, the professional associations offered collective recommendations to their affiliates or somehow restricted competitors’ access to the market or prevented them from freely providing their services.
Commitment decisions in competition law proceedings
This is not the first time the CNMC has terminated competition proceedings with commitments. In fact, this is the tenth proceeding terminated with commitments in the last six years. Most cases have involved infringements of article 1 LDC (three vertical agreements and one horizontal restriction of competition), but the CNMC has also terminated with commitments proceedings for alleged abuses of a dominant position contrary to article 2 LDC, and in unfair competition practices under article 3 LDC.
There have been several markets and sectors affected: informal catering, quality assessment services, management of copyright of musical authors and editors, sale of clothing and footwear, data-related services for pharmaceutical products, distribution and commercialization of non-alcoholic beverages, pay-per-view television, elevator repair and maintenance, and gas and electricity supply.
In this sense, it is worth highlighting the termination of an investigation with commitments has relevant advantages. In particular, this procedure addresses potential harmful effects on competition without the imposition of a fine, and avoids long and burdensome judicial proceedings.
This post is also available in: Español