08 October 2015

Spanish Supreme Court orders recalculation of Mediaset’s €3.6 million fine

On 21 September 2015 the Spanish Supreme court partially accepted the appeal brought by Mediaset against the €3.6 million fine imposed by the Spanish Competition Authority (CNMC) for a breach of conditions agreed upon in the clearance decision on the merger between Telecinco and Cuatro and ordered the CNMC to recalculate the fine.

In 2010, Mediaset, the owner of Telecinco, notified the Spanish authorities of its intention to acquire 100% of the shares of Sociedad General de Televisión Cuatro S.A.U., the owner of Cuatro. On 28 October 2010, the merger filing was conditionally cleared, subject to certain commitments, in Phase II. The acquisition was eventually executed on 23 December 2010.

Mediaset was subsequently, in 2011, fined €3.6 million for failing to submit on time an action plan setting out how the group intended to meet the commitments.  Mediaset had submitted its plan one month late. The CNMC considered this conduct to be a very serious infringement of article 62.4(c) of the Spanish Competition Act 15/2007.

The Supreme Court determined that, although the Spanish Competition Authority’s decision was correct on the merits, i.e. the infringement was confirmed, the amount of the fine level had not been calculated in a proportionate way. Fines are to be calculated based inter alia on the nature of the infraction, its duration as well as the activities carried out by the concerned undertaking to put an end to the infraction. Based on these criteria, and specifically on the fact that the plan was submitted only one month late, the Court considered that the CNMC had not respected the principle of proportionality while calculating the fine.

The Court has now referred the calculation of the fine back to the CNMC, which must base the new calculation on articles 63 and 64 of the Spanish Competition Act 15/2007 and the result shall not exceed €1.8 million.

It is important to note that this was only the first of a series of three fines that the CNMC has imposed on Mediaset as a result of noncompliance with the commitments agreed in the Telecinco/Cuatro merger decision. In addition to the 2010 fine, in February 2013, the CNMC fined Mediaset €15.6 million for failing to comply with certain other commitments, which conduct was also considered to be a very serious breach of article 62.4c. On 15 September (that is, the very same day on which judges voted that the fine should be recalculated), the CNMC fined Mediaset €3 million for a third time for non-compliance with the agreed commitments.

This judgment confirms the tendency of the Spanish courts to apply the principle of proportionality to reduce the levels of fines imposed by the CNMC. Despite the landmark judgment on the calculations of fines in which the Supreme Court considered that the criteria set out in the Spanish Competition Act for calculating fines (0-1% for minor offences, 0-5% for serious offences and 0-10% for very serious offences) should be used as a scale for calculating fines and not as a maximum cap once the fine has already been calculated, many other judgments, both from the Audiencia Nacional and the Supreme Court, reviewing fines imposed by the CNMC under the challenged interpretation, have referred cases back to the CNMC in order to recalculate the fines under the new interpretation of the Supreme Court.

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