Competition agency

The competition agency is a state agency whose mission is to defend and promote competition . This concept refers to the fact that there are a large number of buyers and sellers in the market, and that the price of the product is determined by supply and demand.

Then, a competition agency must investigate, prosecute and punish companies that conduct conduct that, in general, restricts or limits free negotiation.

But what actions are considered as anticompetitive? This will depend on the applicable law in each country.

Conducts investigated by the competition agency

Although there may be differences in the regulations of each country, the general rule is that the competition agency investigates, among others, the following behaviors:

  • Agreements between competitors that aim to restrict competition ( collusionor cartel).
  • Abuse of dominant position.
  • Vertical restrictions (agreement between supplier and customer).
  • Refusal of sale.
  • Predatory prices (below the cost of production), which discourages the entry of new competitors.
  • Narrowing of margins. That is, if the percentage of profits of the company has fallen too much, for example, to establish predatory prices.
  • Concentration operations (mergers or acquisitions), which may give rise to monopoliesor oligopolies.

The general rule is that the competition agency is a decentralized public service, with legal personality and its own assets, independent of any agency or service. However, it must be subject to the supervision of some Ministry, Parliament or other entity of higher hierarchy.

Likewise, the competition agency can establish itself as an independent entity of the regulatory bodies, or be part of the same institution.

The spanish case

In the case of Spain, the National Commission of Markets and Competition (CNMC) is the body that guarantees free competition and regulates all markets and productive sectors of the Spanish economy to protect consumers.

The CNMC is a public body with its own legal personality. It is independent of the Government and is subject to parliamentary control. It became operational on October 7, 2013.

Previously, the competition agency of Spain was called the National Competition Commission. This was a separate entity from the regulatory bodies (Telecommunications, Postal Service, Audiovisual Industry, Rail Transport, etc.)

The Law on the Defense of Competition attributes to the CNMC both instructional and resolutory functions in all procedures in the field of competition. In addition, the CNMC must coordinate its action with competent bodies of the Autonomous Communities, the European Commission and the National Competition Authorities of the Member States of the European Union.

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