Legal Updates – Public and Regulatory Area – February 2024
The Supreme Court will soon establish significant jurisprudence regarding the liability of Public Administrations for cartels orchestrated around public tenders.
The Order of 12 February 2024 (rec. 8302/2023, hereinafter, the “Order”) has admitted the appeal that our Firm (Escalona & de Fuentes) has prepared, in which it upholds the interest in appeals on a point of law in clarifying the following:
“(…) whether the intervention of a Public Administration when negotiating and running public tenders may determine a defence among those provided for in art. 1.3 of Law 15/2007, of 3 July 2007 on the Defence of Competition [“LDC”] and art. 101.3 of the Treaty on the Functioning of the European Union, and whether that intervention may be a relevant factor when assessing the aggravating or mitigating circumstances arising in relation to each of the companies taking part.”
The Order thus admits all the grounds argued in the preparatory letter dating back to the sanctioning proceedings initiated by the National Commission on Markets and Competition (“CNMC”), known as Computer Tender Applications, and which gave rise to the CNMC Resolution of 26 July 2018 (the “Resolution”).
That Resolution assumed as a proven fact a “certain influence” of the Public Administrations in the public procurement cartel under investigation, whereby it sanctioned more than a dozen bidding companies in the sector. However, the CNMC rebuffed repeated requests to investigate the true and substantial role played by the Public Administrations regarding the practices sanctioned, through crafting the Specifications, for which there was overwhelming evidence on file (a dissenting opinion is responsible for indexing them).
Despite the absence of an investigation and the vagueness with which the role of the Public Administrations in the sanctioned cartel is defined (a “certain influence”), when it comes to penalising companies the Resolution upholds the existence of a mitigating circumstance linked to this factor, although there is an appreciable lack of transparency when it comes to quantifying and modulating the latter.
Meanwhile, the Resolution also upholds, in the case of some businesses, the concurrence of an aggravating circumstance due to the intervention of leadership in the sanctioned practice, refusing, as we have said, to undertake an investigation into the true promotional role played by the Public Administrations, of which there is ample evidence on file.
Following the corresponding administrative contentious appeal in which the legality of the Resolution was challenged, the judgment of the National High Court of 20 September 2023 (rec. 575/2018) did not find any omission or defect.
It is therefore now up to the Supreme Court to deem whether it is necessary to establish significant jurisprudence regarding whether the liability of the Public Administrations should be investigated and, where appropriate, clarified, when there is no doubt that they were members of a cartel. The appeal requests that the Order specify, in accordance with the terms regulated by the LDC [arts. 1 and 1.3, 64.2) and 64.1 g)], the factors of exculpation and adjustment (mitigation or aggravation), in order to guarantee the principle of the legality of the imposition of sanctions, in the sense that any sanctions imposed on the other participants in the cartel can be properly weighed.
cartel can be properly weighed. The Supreme Court’s pronouncement transcends, of course, the specific case, and will be critical for the investigatory activities undertaken by the CNMC, which, as is public and well known, has made combating collusion in public tenders its priority.
