An Economic Assessment of Antitrust Fines in Spain

Fines remain an essential mechanism of competition enforcement and should deter anticompetitive practices. This article quantifies the deterrent power of fines imposed by the Spanish competition authority from 2011 to 2015. First, we compare the evolution of fines over three sub-periods: From January 2011 to the creation of the CNMC on October 2013, since then until the Supreme Court’s judgment on fines on January 2015, and for the rest of 2015. The average fine per firm is similar in the first two periods but significantly lower in the third period, and now fines are more concentrated around the mean than before. Second, we define three scenarios – according to low, average or high values of the relevant parameters – for which we compute deterrence ratios to compare actual and optimal deterrent fines. The results show that most of the fines were under deterrent – a deterrence ratio lower than one – even when using the lower optimal fines of the lower scenario. More specifically, 80% of the actual fines are under deterrent in that scenario (close to 100% in the other two scenarios), and the average value of the fines imposed to these companies was on average 64% below the optimal deterrent fine, with slight changes across subperiods. We conclude that the fining policy of the Spanish competition authority between 2011 and 2015 should be considered significantly under deterrent.