Resale Price Maintenance (RPM) in Spain
Different commercial behaviours, such as price recommendations and maximum prices setting, despite being considered as restrictions to competition, are generally permitted under specific requirements. Others, such as fixed price setting and minimum price setting are normally considered serious infringements of Competition Law. Spanish Law, as a whole, does not contemplate specific rules on RPM, nor are there specific norms regulating distribution agreements. Thus, the Spanish competition authority (the CNMC) and the Spanish courts rely on the general provisions of the Spanish Competition Act and EU law in order to deal with RPM, which they normally analyse case by case.
Spanish competition law includes a de minimis threshold, exempting otherwise illegal RPM from the prohibition. Cases falling below the de minimis threshold are considered minor misconducts, as shown in the Mantra Case:
- The Mantra Case, 17 July 2013: In this case the CNMC stated that RPM, even if it is a restriction on competition by itself (i.e. a restriction by object), is not a practice necessarily contrary to Spanish competition law insofar as it does not significantly affect competition.
However, please note that the de minimis exemption only applies under restricted circumstances specified in the Spanish Competition Act.
The Spanish competition authorities’ view on RPM
The CNMC and the Spanish courts have provided manufacturers, suppliers and distributors with useful insight about how the different types of RPM:
Fixed prices setting: This behaviour restrict the freedom of the distributor and/or the retailer to set their own prices. This conduct is prohibited, as show in the following case:
- Food Services Project Case,10 March 2016: In this case a franchiser fixed the franchisees’ retail prices of its products. The franchiser was not fined. However, the CNMC forced the franchiser to modify the contracts with its franchisees in order to clarify the pricing policy of its franchise systems and eliminate the risks of anti-competitive behaviours.
Price recommendations: Is allowed as long as such recommendation permits the manufacturer and/or the reseller to freely determinate the resale prices to distributors and/or consumers:
- Pharmaceutical Cantabria Case, 30 December 2011: In this case the CNMC stated that the competition rules sanction the establishment of a fixed or minimum resale price, but that the recommendation of resale prices is acceptable provided that the market share of each of the parties does not exceed 30 per cent and that the recommendation is not accompanied by pressure measures or incentives (threats, fines, suspension of deliveries) that de facto suppose the establishment of a fixed price.
Maximum price setting: Is allowed provided it does not lead to indirectly fixing prices. The Spanish Competition Authority has delivered with a rationale of this permission:
- The Westfalia Surge Ibérica Case, 19 October 2004: In this case, the CNMC stated that “[t]he fixing of maximum prices “can be justified by the fact that the manufacturer wants to prevent abuses by resellers that lead to the idea that it is an abnormally expensive product […]”.
- The Mahou Case, 30 November 1998: In this case, the CNMC stated that “[…] Neither can the same seriousness be considered in the setting of maximum prices as in the setting of minimum prices, since the former may find its justification in the fact that the manufacturer wants to prevent abuses by resellers that lead to generating the idea that it is an abnormally expensive product, while in the setting of a minimum price it always has a negative impact on the consumer”.
Minimum price setting: It is strictly forbidden. In Spain, a minimum price setting is considered one of the most serious misconducts within competition law:
- Suzuki-Honda Case, Resolution of the Spanish Competition Authority of 19 January 2012, in which a fine of EUR 2,098,280 was imposed on MONTESA HONDA and SUZUKI MOTOR ESPAÑA a penalty of EUR 1,881,570 for an agreement to set minimum prices and commercial margins with the concessionaires.
- ACEITES 2 Case, Resolution of the Spanish Competition Authority of June 22, 2007, in which Koipe and eight distribution chains are sanctioned for setting the minimum sale prices to the public of oils of this brand (fines ranging from EUR 85,900 to EUR 413,800).
Reports and Guidance papers concerning RPM in Spain
Up to the moment, reports and guidance on RPM papers issued by CNMC are sectorial in their scope, and are only of limited interest for participants outside the specific sectors:
– CNMC: Report on the proposed agreement on the code of good commercial practices in food markets .
– CNMC: Study on the market of retail distribution of medicines in Spain .
– National Competition Commission (CNC): Report on the relationships between manufacturers and distributors in the food sector .