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Grifols 'jumps the gun' on Spanish Markets and Competition Commission

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'The Start' Public Domain via Wikimedia Commons

On 16 October 2015 the Spanish Markets and Competition Commission (‘CNMC’) fined Grifols SA €106,500 for going ahead with the concentration without prior clearance (see SNC/DC/037/15). Grifols SA notified only after implementation, once the CNMC, alerted by media coverage, had expressly required Grifols SA to file (see C/0607/14) 

In Spain, notification thresholds relate to both turnover and market shares. If the joint market share is 30% or more, prior clearance is mandatory unless the target’s turnover in Spain is up to €10 million. So does any concentration entailing market shares above 50%, even if turnover is negligible. For a thorough overview of national thresholds see Chapter 8 Merger Control (7 National Merger Control and International Cooperation) by Vivien Rose and David Bailey, Bellamy and Child: European Union Law of Competition (7th edn OUP 2013).

Grifols SA concluded that notification was unnecessary, since the target’s turnover was below €10 million and the parties’ joint market share was 49%. The CNMC disagreed and calculated a joint market share of 52.2%. 

The CNMC stated that: (i) Grifols SA had been negligent; and (ii) when in doubt the parties should consult the CNMC prior to implementing their concentration (Article 55(2) of the Spanish Competition Act expressly offers this possibility).

This case reveals the CNMC’s strict views on the obligation to notify. What is interesting, however, is how the CNMC discusses negligence.  From the angle of legal certainty, it is striking that the CNMC inferred from Grifols SA’s behavior (up to four calculations of market shares during the proceedings, after the CNMC challenged the original calculation) that the latter was not diligent and indeed that Grifols SA should have doubted such own calculation. Also, the decision implies that a company doubting on a mere question of fact, such as market shares, must put such doubts to the CNMC or, should it not take this avenue, be considered negligent. This seems quite different from the Commission’s pioneering stance in Samsung/AST. Grifols SA did check the legal threshold and its only motive for doubting its own calculation would have been that the result was very close to such threshold.

For more detailed information on the obligation to notify and the mandatory suspension of concentrations until clearance see Part II Control of Concentrations, 16 General Issues: Scope of Control by Luis Ortiz Blanco (ed.), EU Competition Procedure (3rd edn OUP 2013); and Part I General Principles, 5 Mergers, D Merger Control Procedure by Jonathan Faull, Ali Nikpay, (eds.), The EU Law of Competition (3rd edn OUP 2014).

Stefan Rating & Yolanda Martínez, Rating Legis