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On June 20, the Spanish Markets and Competition Commission (the “CNMC”) resolved to fine 26 school transport companies €1.88 million and 2 of the main associations in the sector €75,000 euros for forming a cartel in school transport in Murcia  (Case SAMUR/02/18, Murcia School Transport).

The practices, considered a very serious infringement under article 1 of the Spanish Competition Act 15/2007, consisted in fixing public tenders for free school transport of the Department of Education. Specifically, from 2009 through 2018, the companies in question distributed practically all the tendered routes among themselves, establishing rotas and compensations to ensure workload and prices.

The CNMC considered it evidenced that, to guarantee the effectiveness of the cartel, the companies orchestrated a system based on cross, double and triple withdrawals in a single batch, fictitious offers and even withdrawals conditional on the maintenance of the withdrawal of another bidder. To coordinate, they signed a “regulating agreement,” and the business associations FENEBUS-Murcia and the Regional Federation of Murcian Transport Business Organizations (FROET) were responsible for overseeing its fulfillment.

This new resolution is added to the fight that the national and regional competition authorities in Spain appear to have taken up against anti-competitive practices in the road-passengers transport market.

In 2011, the CNMC sanctioned three coach companies that had submitted identical bids in a public tender called by the city council of Las Palmas de Gran Canaria (Case SA/CAN/0012/11, Las Palmas Council Transport). In 2017, it sanctioned 36 companies due to an alleged cartel in the passenger transport market in the Balearic Islands (Case S/DC/0512/14, Balearic passenger transport).

At autonomous regional level, the Basque Competition Authority sanctioned 17 transport companies understanding that there was a tender price-setting and market distribution agreement that included a boycott of the companies that bypassed the established rules (Project LEA/AVC no. 130-SAN-2016, Guipúzcoa passenger transport).

Finally, the CNMC and the government of Navarra’s competition directorate have investigations open into alleged anti-competitive practices in the sphere of public tenders with a particular impact on school transport, and so it is likely that this trend will continue. We highlight that, in the sphere of public procurement, the risk of a report by other competitors or the contracting administration itself is particularly high.

It is noteworthy that the CNMC has, for the second time, activated the procedure to apply the prohibition on contracting with the administration established in article 71.1.b of Spanish Act 9/2017 on Public Sector Contracts. This allows the CNMC to impose the prohibition to contract with the public sector on persons definitively sanctioned for a serious infringement in matters that call into question their integrity, such as those of distortion of competition.

Although the CNMC has shown its interest in using this measure for several years, as deduced from its action plan for 2016, it did not activate this mechanism until March, when it ordered the referral of the sanctioning resolution to the State Public Procurement Advisory Board for it to set the duration and scope of that prohibition.

In conclusion, the resolution confirms the fight that the national and regional competition authorities in Spain appear to have taken up against anti-competitive practices in the road-passengers transport market and the priority nature of tenders with the public administration. It also shows CNMC’s insistence on applying the prohibition to contract with the public administrations due to infringements of competition regulations, as we had already reported here and here.

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Blog de Cuatrecasas, uno de los referentes en la abogacía de negocios en España y Portugal. Representamos a algunas de las principales empresas cotizadas de ambos países y asesoramos a nuestros clientes en operaciones estratégicas, así como a inversores extranjeros interesados en el mercado ibérico

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