19 Mar Competition Law Compliance Guide for Spain.

In an increasingly supervised global market, commercial agility can no longer be separated from regulatory compliance. As we already anticipated in last week’s article “Competition law: basic notions of collusive practices,” operating under the radar of competition authorities is not a viable strategy. Therefore, the key will lie in integrating a culture of integrity that acts as a preventive shield against risks that could compromise the company’s viability.

What is a competition compliance program?

The compliance program is a living ecosystem of protocols, policies and internal controls designed for the company to effectively respect market rules. It is not merely an aesthetic manual or a reproduction of the law, but rather a practical tool that seeks to establish a competition culture at all levels of the organization. Its main function is threefold:

1. Prevent the commission of infractions.
2. Detect any suspicious conduct at an early stage.
3. React in a way that allows minimizing legal and reputational damages.

The risks of operating without protection.

Competition regulation entails consequences that go beyond an economic sanction. Among the most critical risks we can find:

• Fines: Article 63.1 of Law 15/2007 provides for fines of up to 10% of the company’s total business turnover for very serious sanctions.
• Prohibition from contracting with the public sector: Article 71.1.b) of Law 9/2017 establishes that anyone who has been sanctioned for serious infraction of competition falsification may not contract with the public sector.
• Administrator liability: Article 63.2 of Law 15/2007 provides for the possibility of imposing sanctions of up to 60,000 euros on the legal representatives of the company or those who form part of the management body that intervened in the conduct.
• Compensation for damages: Article 72 of Law 15/2007 establishes that any person who has suffered harm from these practices will have the right to claim from the infringer and obtain full compensation.

Our methodology

How do we implement your compliance program from Navarro Llima Abogados?

Each company is different, and as such, in compliance matters of any modality, “standard” solutions will not work. It will be necessary to design a “tailor-made suit” based on your company’s operational reality, following five strategic axes:

1. Top management commitment.

The public and firm involvement of senior management is necessary, being the indispensable foundation for the program to have credibility before the authorities. To this end, we prepare a personalized document for each company, which the board of directors and other management positions must sign to demonstrate their commitment to regulatory compliance.

2. Personalized risk map.

We identify business areas (sales, purchasing, logistics…) vulnerable to engaging in anti-competitive practices, such as price fixing or market sharing. We will analyze the functioning and processes of the different departments, defining the key moments that must be attended to in order to avoid carrying out acts contrary to regulations, reflecting this in the systems and documents that regulate their actions.

3. Independent supervision.

We define the figure of the compliance officer, ensuring that they will have autonomy, independence and the necessary resources to monitor legal compliance without interference.

4. Secure communication channels.

Different communication channels will be implemented designed to ensure that any observation or suspicion of potentially irregular practices is effectively transferred to the competent management bodies and the compliance officer. These channels will establish clear procedures for the management and investigation of communications received, ensuring at all times the confidentiality and, where appropriate, the anonymity of the informant. In this way, people who raise doubts or alerts about the adequacy of certain practices are protected, fostering an environment of trust and regulatory compliance.

5. Specialized training.

Action guides will be developed and implemented for different employees, adapted to their functions, powers and levels of responsibility within the organization. Specific and properly documented training will be provided for the different departments, addressing the risks associated with practices contrary to competition regulations, the importance of their prevention and the possible legal, economic and reputational consequences that such conduct can generate for the organization.

The essential documentation of the Compliance Guide

For a program to be considered effective and capable of mitigating sanctions, it will be supported by a series of documents, some have been referenced in the previous section, but essentially they will consist of the following:

1. Competition conduct code. Manual of clear guidelines on the different permitted and prohibited behaviors.
2. Inspection protocol. Procedural guide on how to act during CNMC inspections.
3. Control matrix. Registry document of surveillance measures adopted for each detected risk.
4. Disciplinary system. Transparent regulation that links regulatory compliance with human resources policies.

We can conclude that compliance systems have stopped being a cost to become an investment in legal security. The company that demonstrates a solid compliance culture not only avoids risks, but also generates greater confidence in investors, clients, and the Public Administration itself.

At Navarro Llima Abogados we take care of the preparation and comprehensive implementation of the system, involving both management bodies and employees, with the objective that the organization achieves the highest degree of compliance and credibility, minimizes legal contingencies and consolidates a corporate culture based on integrity and responsibility.