17 April 2015

CNMC adds four new undertakings to its concrete, cement and construction products investigation

The Spanish Competition Authority (CNMC) revealed on 10 April 2015 that it has opened infringement proceedings against four additional undertakings under the framework of its investigation into possible anti-competitive conduct in the concrete, cement and other construction products markets (S/DC/0525/14).

Following its suspicion that anti-competitive behaviour had taken place amongst several companies, the CNMC conducted unannounced inspections on 16, 17 and 18 September 2014 at the premises of certain of the undertakings and one association of undertakings.

On 22 January 2015, the CNMC announced that more dawn raids had taken place on 20 and 21 January 2015 concerning the markets for concrete, cement and related products such as aggregates and ready-mix concrete.  In particular, the CNMC sought evidence to confirm the existence of agreements between the companies concerned to fix prices, impose similar commercial terms, share sensitive information, or enter into market-sharing agreements covering all of the national territory of Spain.

Following the raids, the CNMC considered that it had gathered enough information to presume the existence of anti-competitive behaviour and for this reason decided to commence infringement proceedings against the following companies: Betón Catalán S.A., Cementos Molins Industrial S.A., Promotora Mediterránea 2 S.A., Hanson Hispania S.A., Cemex España Operaciones S.L.U., Tenesiver S.L., Comercial Arroyo Construcción S.A., Hormigones Giral S.A., Cementos Portland Valderrivas S.A. and Cementos Lemona S.A.

Now the CNMC believes that further evidence suggests that additional companies, namely: Materiales y Hormigones S.L., Lafarge Cementos, S.A., Holcim España, S.A. and Hormibusa, S.L. could also have engaged in anti-competitive conduct including agreements to fix prices, imposing similar commercial terms, market sharing and sensitive information exchanges, all of which are prohibited by Article 1 of the Spanish Competition Act 15/2007.

The initiation of infringement proceedings does not imply the existence of anti-competitive behaviour by these companies and the burden of proof will fall on the CNMC to prove that the defendant companies were involved in the alleged anti-competitive conduct.

The period of 18 months, which started on 22 December 2014, to officially investigate the possible existence of anti-competitive conduct, will not be modified.

Infringement proceedings end with a decision taken by the CNMC.  If this administrative body considers that one or several companies are guilty of anti-competitive practices, the firm or firms in question could face fines of up to 10 per cent of their annual turnover in the year previous to the fine.

It is important to note that this is not the first investigation to be opened in the Spanish construction market, as on 1 December 2014 the CNMC announced that it had carried out dawn raids at the premises of several companies operating in the precast concrete walling sector.  Separately, in December 2014, the watchdog extended the existing infringement proceedings in the modular construction case against 12 additional undertakings.  Further, on 12 February 2015, the CNMC announced the decision to fine companies in the Spanish concrete post market €1.87 million.

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