Spanish Supreme Court annuls fine in railway equipment cartel

The Spanish Supreme Court (Tribunal Supremo) ruled on September 22nd, 2022, on the appeal of a fine imposed by the Spanish competition authority CNMC on DFRail as a result of its alleged involvement in a horizontal agreement between railway equipment manufacturers. The fine had been overturned by the High Court (Aundiencia Nacional) and now the ruling has been confirmed by the Supreme Court.

The CNMC had fined DFRail and three other railway equipment manufacturers in June 2016 for participating in a cartel (case S/0519/14 INFRAESTRUCTURAS FERROVIARIAS). According to the decision, the companies agreed to form temporary joint ventures to submit bids for procurement contracts related to the provision of railway equipment. The CNMC had argued that such agreements had the object of restricting competition.

GAMES Economics experts advised DFRail in the administrative proceeding and in the appeal of the CNMC decision before the High Court. The Spanish Supreme Court ruled in favour of our client and confirmed the High Court decision to annul the fine of €1.5 million. The court relied on the findings of our report to conclude that DFRail’s bidding behaviour might be explained by objective economic reasons and productive capacity constraints rather than by a cartel agreement.

In particular, our report was key to prove that the company did not have sufficient productive capacity to bid alone for railway equipment projects tendered by the railway operator ADIF, so its participation in a joint-venture did not restrict competition.

The GAMES Economics experts advising DFRail were Juan Delgado and Héctor Otero.