Competition: Market share and duration of the contract

defensa de la competencia

Violation of the rules of competition allows the cancellation of a contract and compensation for damages, but not always achieved.

Although Directive 2014/104 / EU 26 November, It not yet has been transposed into Spanish law, courts are resolving disputes this area both in the sense void contracts or condemn compensation for damages and in contrast. The main question is whether there really has been that infringement of the Law on Protection of Competition.

The Civil Chamber of the Supreme Court It has recently ruled on a case in, in Judgment 20 October 2015, in which a two-point analysis is especially controversial: the market share and duration of the contract, in a case concerning a gas station.

The company Pozuelo 4 S.L. (hereinafter "Pozuelo") He signed a contract in 1998 (but its effects retrotrayendo 1993), whereby it conferred a surface right by 45 years the company Galp Energy Spain S.A. (hereinafter Galp). Galp built a service station that would lease the station to the landowner for the same time and Pozuelo were forced to have as exclusive supplier to Galp.

"Pozuelo" filed suit in the Commercial Court No. 1 Madrid requesting a declaration of nullity of contracts. The Court dismissed the claim and he condemned "Pozuelo" to pay the costs.

The applicant, He appealed to the Provincial Court of Madrid, which dismissed the appeal and he condemned "Pozuelo" to pay the costs.

So they filed appeal to the Supreme Court.

Galp meanwhile, I opposed the application and the approach requested a preliminary ruling from the ECJ, to determine if one considers that a supplier with a market share below 5% It holds or not to affect competition, regardless of the length of the contract or whether to assess it. And if the duration was decisive, if the reference of comparison would be the rest of the sector supply contracts.

The approach of the question was the subject of multiple procedural steps, but finally, the 24 April 2013 the Plenary of the Chamber issued an order agreeing to raise the preliminary ruling on if a contract like that at issue in this dispute can be considered "negligible importance" and not incur the ban Article 81 EC (Today article 101 TFEU) when the supplier's market share does not exceed 3% share compared with three other vendors grouped around 70%, even if it lasts more than the market average. In case the answer is negative, and the contract had to be examined in the light of Regulations No. 1984/83 and 2790/99 Not being the supplier owns the land and being the remaining contract period of more than 5 alos the 1 January 2002, the contract will become void 31 December 2006?

The ECJ issued an order dated 4 December 2014: Competition law is not infringed, if the market share of the supplier does not exceed 3% while the combined market share of three other suppliers represent about 70% and the contract period is not manifestly excessive in relation to the average duration of agreements generally concluded in the sector. And non-competition clause of a contract in force 31 May 2000 that meets the exemption requirements of Regulation 1984/83 but does not meet the established in Regulation 2790/1999, It is exempt from the prohibition in Article 81 EC, until 31 December 2001.

So, It is an important fact to know the average duration of exclusive supply contracts of fuels to service stations 1993 and 1998, it was agreed to refer that question to the National Commission of Markets and Competition (CNMC).

CNMC issued its report, indicating that the duration of the contracts before start date 31 December 1993 era de 28,47 years old. And for the year 1998, the duration is 25,53 years old. But when there was a surface right and the station is leased to the landowner, the duration for contracts before the end of 1993 era de 31,43 alos and contracts signed until 1998 era de 25,74 years old.

Ultimately, the Board dismissed the appeal on the ground that the length of the disputed exclusive contract (30 years old), It was not above average year 1993 (31,43 years old) or manifestly excessive in relation to the average duration of the year 1998 (25,74 years old). Therefore, no infringement of the rules of competition.

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