By Rosa Espín and Leticia Sitges
The Spanish government recently passed a draft bill for the “ rationalization and organization of the supervising regulatory bodies of the markets and the improvement of its governance” (the Draft Bill). The bill aims to reorganize antitrust regulation, and to improve supervision and regulation in the economic and financial domains, specifically the banking, capital markets, and insurance sectors.
On 4 June 2013, the Spanish government passed Act No. 3/2013, creating the Comisión Nacional de los Mercados y la Competencia ( CNMC). This comprises several regulatory bodies: the National Energy Commission; the National Antitrust Commission; the Telecommunications Market Commission; the Rail Regulation Committee; the Airport Economic Regulation Commission; and the National Postal Industry Commission.
According to the new Draft Bill, the CNMC, the Spanish current national regulatory authority (NRA), will be replaced by four new independent administrative authorities:
- An Independent Administrative Authority for Antitrust
- An Independent Administrative Authority for the Supervision and Regulation of the Markets
- An Independent Administrative Authority for Insurance and Pension Plans
- An Independent Administrative Authority for the Protection of Financial Services Consumers and Financial Investors
This structure follows a similar approach to the German system in which there are two separate authorities: the Antitrust and Consumers Rights Authority (Bundeskartellamt) and Federal Network Agency, which is the German regulatory office for electricity, gas, telecommunications, post and railway markets (Bundesnetzagentur).
The main goals of this reform are to guarantee the independence of such authorities and to avoid political interference, with a view to complying with EU requirements for NRAs. The EU has already pointed out that Spain has not adequately addressed these regulatory requirements over the past few years.
For example, on 19 October 2016, the Court of Justice of the European Union (CJEU) answered a preliminary question (Case C-424/15) posed by the Spanish Supreme Court. The CJEU asked if “early dismissal, due only to the entry into force of a new national law and not to an unforeseen change in the circumstances of the office holders as previously established in national law, could be considered compatible with the provisions of Article 3(3a) of the Framework Directive?” [Directive 2002/21/EC of the European Parliament and of the Council of 7 March 2002 on a common regulatory framework for electronic communications networks and services]. The CJEU’s question referred to the impartiality and transparency of NRAs when exercising their powers.
In this situation, the creation of the CNMC resulted in the dismissal of the president and a board member of the former Telecommunications Market Commission prior to the end of their respective terms of office. The CJEU regarded such dismissal, merely on the grounds of an institutional reform, as an external interference into the independence and impartiality of the NRA. It was concluded that Member States “must guarantee the independence of NRAs by ensuring that they have separate legal identity and are functionally independent,” and that “NRAs exercise their powers impartially, transparently and in a timely manner.”
In addition, in September 2015, the European Commission issued infringement proceedings against Spain for failure to comply with EU Directive 2009/72/EC of the European Parliament and the Council of 13 July 2009 concerning common rules for the internal market in electricity. This required the NRA to fix or approve transmission or distribution tariffs, or the methodologies underlying the calculation of the referred tariffs. The Spanish government inadvertently amended the Spanish Electricity Act No. 24/2013 through a final provision of a non-related act by virtue of which the government assumed the competence to fix the structure and applicability conditions of transmission and distribution tariffs. The European Commission has threatened to sue Spain before the CJEU if Spain does not return such competence to the NRA.
Industry stakeholders in Spain should monitor the final version of the Draft Bill closely to ensure the Spanish government returns such powers to the relevant authorities. Consequently, the Draft Bill will play a key role in depriving the Spanish government of its power to fix the structure, and applicability conditions of transmission and distribution tariffs.
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