Spanish Government centralises all regulatory bodies to foster market harmonisation

Barcelona (ACN).- The first stage in a far reaching reform to foster market harmonisation throughout Spain was announced on Friday. After the weekly Cabinet meeting, the Spanish Deputy Prime Minister, Soraya Sáenz de Santamaría, confirmed the merger of all the regulatory bodies in Spain, creating a single Madrid-based super regulation authority. The new body, called the National Market and Competition Commission (CNMC), will merge the current Spanish Competition Authority with 7 regulatory bodies for specific markets, the most important of them being authorities regulating the stock exchange (CNMV), energy (CNE), and telecommunications (CMT). The new body would directly depend on the Spanish Ministry of Economics, which would mean that powers would be taken away from the Industry Ministry, which had traditionally run the energy and telecommunications markets. Furthermore it would concentrate all the regulatory powers of all markets in a single body, which would have its main objective being integral market harmonisation, fostering common regulations and an effective single market. The decision has been firstly presented as a way to save money by reducing the number of buildings, board members and duplicities. Soraya Sáenz de Santamaría has also stated that the merger “will increase efficiency, competitiveness, professionalism” and “will gain independence”. However, the decision also means a recentralisation of competition authorities, since the new body will be based in Madrid. Barcelona will not longer host the headquarters of the authority regulating the telecommunications market, the CMT, which is responsible for phone, cell networks, Internet, TV and radio. However, Sáenz de Santamaría stated that Barcelona could host a delegation of the new body, due to the large presence of telecommunications companies in the Catalan capital. It remains to be seen if the majority of the regulation services dealing with the telecommunications industry will leave Barcelona or will remain, although not as an independent body but working within a Madrid-based authority.

On Friday, Sáenz de Santamaria announced the merger of the 8 Spanish regulation authorities in a single new body, the National Market and Competition Commission (CNMC). The measure will save €4 million in running costs, since the number of buildings will be reduced, as well that of board members, falling from 52 to 9. The board members will be appointed by the Spanish Government, but they will have to be confirmed with an absolute majority vote in the Spanish Parliament.

The four main regulatory bodies in Spain are the National Competition Commission (CNC), the National Energy Commission (CNE), the National Telecommunications Market Commission (CMT), and the National Trade Market Commission (CNMV). Saénz de Santamaría explained that, since 2007, a new body was included, the Postal Service Commission. However, she criticised the former Spanish Government for having “multiplied” the number of regulatory institutions to a total of 8. The new ones are: the State Council of Audiovisual Media, the Airport Economic Regulation Commission, and the Railway Regulation Committee. Those 8 authorities will be merged into a new single super regulatory commission.

According to Sáenz de Santamaría, one of the reasons behind this decision is that the different bodies issued “contradictory reports” on the same cases. She spoke of a company that received an authorisation to issue a new product from one body but later received a fine by the CNC. The Spanish Deputy Prime Minister said that with the decision announced on Friday, Spain was “making a step forward to [undertake] structural reforms regarding competitiveness, legal security and strengthening of competition”.

The CMT, the first regulatory body out of Madrid

The CMT, which had been created in 1996, was the first regulatory body located outside of Madrid, functioning from Barcelona. The CMT has been in the Catalan capital since 2005 and in Autumn 2010 it moved to a new building in Barcelona’s 22@ technological district, which was meant to be its permanent base. Furthermore, Barcelona was declared the “Mobile World Capital”, which will see the city organising the “Mobile World Congress” every year, the world’s main trade fair and conference for the cell phone and mobile technology industry.

When did the CMT move to Barcelona?

The decision was made to move the CMT out of Madrid in 2004 by an agreement between the Spanish Prime Minister, José Luis Rodríguez Zapatero and Catalan President at the time, Pasqual Maragall. The agreement was part of the initial Zapatero wager for “a plural Spain”, from which he later distanced himself and the government he was running. The Spanish Industry Minister at the time, José Montilla, was also involved in the move. Montilla, who was also the Catalan Socialist Party’s Secretary General, appeared as “the father” of the decision, an asset he used in his campaign to become the President of the Catalan Government in 2006.

CMT workers protested at the decision to move the offices from Madrid to Barcelona, however all of them were offered to keep their jobs. Some of the workers refused to move to the Catalan capital and left the CMT. There was stiff criticism in Madrid political circles with a belief that the decision was helping Catalan interests and a threat to Madrid’s capital status. Eight years later the decision to move the first -and so far only- regulatory body out of Spain’s capital city was taken by the new Spanish Government after only two months in office.