Resolutory and disciplinary function

Law16/1989 (17 July), regarding the Defence of Competition (LDC), distinguishes three types of prohibited types of conduct or practices:

1. Collusive agreements.

   Point 1.a) of Article 3 of Law 6/2004 refers to Article 1 of Law 16/1989 (17 July), of the Defence of Competition (LDC) which prohibits any collective agreement, decision, or recommendation, or any concerted or consciously analogous practice that has the objective, gives rise, or may give rise to the effect of impeding, restricting or distorting competition.

   This general definition of collusive practices or agreements in the LDC is accompanied by the listing (by way of example) of a number of cases that are considered to be collusive. These practices include:

   • The fixing, either directly or indirectly, of prices or other commercial or service conditions.
   • The restriction or control of production, distribution or technical development or of investment.
   • The apportioning of the market or supply sources.
   • he application in commercial or service relations of unequal conditions for equivalent services which may place certain competitors at an advantage compared with others.
   • Making the conclusion of contracts subject to the acceptance by other parties of supplementary provisions which, due to their nature or in accordance with commercial practice, have no relation with the object of such contracts.

   Nevertheless, in accordance with that established in Article 3.4 of Law 6/2004, the GCC shall have the power to grant those special authorizations on collusive agreements under the conditions envisaged in Article 4 of Law 16/1989.

2. Abuse of a dominant position.

   Article 6 of the LDC prohibits the abusive exploitation by one or various companies of their dominant position in the whole of or in part of the Spanish market; as well as of the situation of economic dependency in which their client companies or suppliers who do not have an equivalent alternative for the exercising of their activity may find themselves in.

   The GCC is responsible for determining conduct of abusive exploitation in accordance with that stipulated in Point 1.b) of Article 3 of Law 5/2004.

3. Acts of unfair competition that distort free competition.

   Article 7 of Law16/1989 prohibits acts of unfair competition that distort competition. In this respect it is interesting to stress that, in accordance with LDC, acts of unfair competence shall only be sanctioned by administrative bodies when two circumstances coincide in them: 1) that the unfair act seriously distorts the conditions of competition in the market; and II) this serious distortion affects public interest.

   The GCC shall deal with acts of unfair competence that distort competence in accordance with that which is stipulated in Point 1.c) of Article 3 of Law 6/2004.

   For the GCC to be able to exercise its resolutory and disciplinary functions satisfactorily, the full development of the Galician Service for the Defence of Competition (GSDC) is required. This body is in charge of carrying out the tasks of detecting any conduct that is detrimental to competition, and the investigation of enquiries, and processing the corresponding cases.

   Finally, the resolutory authority of the GCC is accompanied by the power to impose fines, in accordance with that stipulated in the second section of Law 16/1989. These fines may be of two types: disciplinary and coercive. Furthermore, the Court may impose a fine on the legal representatives of offenders when dealing with persons who, being members of management bodies, may intervene in an agreement or a decision that restricts competition.