Spain: The Supreme Court upholds that competition authorities set the duration and scope of the debarment from contracting with the public sector

The Supreme Court has once again ruled on the scope of the competition authorities’s powers to impose to infringing companies a prohibition to contract with the public sector, clarifying an issue that had generated an academic and case-law debate in recent years. In its judgment no. 50/2026 of 26 January, the Third Section of the Contentious-Administrative Chamber dismisses the cassation appeal brought by a company and confirms that the competition authorities are empowered to set up, in their sanctioning decisions, the duration and scope of the debarment from contracting provided for in Article 71(1)(b) of the Public Sector Contracts Law (LCSP, in its Spanish acronym).

This ruling is particularly significant because it consolidates an interpretative trend that had already begun to emerge in recent practice, both at the Spanish Competition Commission (CNMC) and among several regional competition authorities. In resolving this issue, which was admitted due to its reversal interest (interés casacional), the Supreme Court establishes case law on the division of competences between the competition authorities and the Ministry of Finance, and clarifies the existing uncertainties surrounding the legal basis for this measure. This will likely result in the CNMC and regional competition authorities to continue determining the scope and duration of the debarment in their sanctioning decisions.

Background and debate on the power to impose the debarment

On December 23, 2019, the Catalan Competition Authority (ACCO) rendered a decision in Case 94/2018, Licitaciones Servicio Meteorológico de Cataluña, by which it imposed fines to two companies, their managers, and the former director of the Catalan Meteorological Service (SMC) for their participation in a cartel infringement consisting of allocating public tenders for the provision of installation, maintenance and supply services for radar and weather stations. In addition to the fines, the ACCO banned the two sanctioned companies to participate during 18 months in public tenders called by the SMC.

The High Court of Justice of Catalonia (TSJC) partially upheld the appeal brought by one of the sanctioned companies, and reduced the fine imposed by the ACCO on the ground that it was disproportionate. However, the TSJC rejected the appellant’s argument that the ACCO lacked competence to prohibit it from contracting with the SMC (judgment number 3289/2022). The TSJC’s judgment includes a dissenting opinion by two of the judges, who considered that the legal framework does not empower the ACCO to impose prohibitions on contracting.

The company lodged an appeal in cassation with the Supreme Court, which was granted leave to proceed on the basis that determining which administrative authority is entitled to impose the debarment provided for in Article 71(1)(b) LCSP presented reversal interest.

Article 71(1)(b) LCSP prohibits individuals having been sanctioned, by a final decision, for a serious infringement involving the distortion of competition from contracting with public-sector entities. Besides, Article 72 LCSP provides that the debarment:

• may be set up directly by the contracting authorities when the judgement or administrative decision expressly specifies its scope and duration (Article 72(2) LCSP); otherwise,
• it shall be determined through an ad hoc procedure conducted by the Minister of Finance, following a proposal from the State Advisory Board on Public Procurement (SABPP) (Article 72 (3) LCSP).

The appellant argues that the competition authorities are not legally empowered to impose debarments as an ancillary sanction in their sanctioning decisions, since the principle of legality set out in Article 27 of Law 40/2015 requires that every infringement and sanction be determined and defined by the legal order, and that the power to impose sanctions must likewise be specified and provided for by law.

Therefore, for the competition authorities to be able to impose debarments in their sanctioning decisions, their governing regulations would need to expressly empower them to adopt this a measure. In this regard, the appellant holds that the rules governing the sanctioning power of the competition authorities in Spain do not specifically provide for the possibility of imposing the prohibition to contract with the public sector. In particular, Article 53(2) of the Competition Act (LDC) sets out the content that sanctioning decisions may have, and it does not specifically include the possibility for the competition authorities to impose the debarment, nor can this measure be deemed to be included under any of the sections of that provision. By contrast, other administrative bodies that impose prohibitions to contract ancillary to pecuniary sanctions pursuant to Article 71(1) LCSP are specifically empowered to do so in the rules governing their respective sanctioning authority, unlike the competition authorities (e.g., in tax matters or in relation to the protection of persons who report regulatory infringements and the fight against corruption).

Conversely, the appellant argues that likewise Articles 71 and 72 LCSP do not empower the competition authorities to impose prohibitions to contract with public entities, since they only provide in generic terms that an administrative body may set, in its sanctioning decision, the scope and duration of the debarment, which would only be lawful where its governing regulations expressly authorize it to do so. Consequently, the appellant contends that it is not possible to apply an analogical or expansive interpretation of the LCSP to consider the competition authorities empowered to impose into their sanctioning decisions any measures that the LDC does not include as part of their sanctioning powers.

On 26 January 2026, the Third Section of the Contentious-Administrative Chamber of the Supreme Court dismissed the cassation appeal filed and confirmed that competition authorities may impose a debarment in their sanctioning decision (judgment No. 50/2026). The Supreme Court also dismissed the cassation appeal filed by the another company sanctioned by the ACCO in its judgment of 16 December 2025 (judgment number 1655/2025).

The Supreme Court’s arguments supporting the competence of the competition authorities

The Supreme Court bases its dismissal of the appeal on five arguments.

• A literal interpretation of Article 72 LCSP shows that the legislature opted for a dual legal procedure to determine the scope and duration of the debarment, such that the procedure conducted by the SABPPis subsidiary and conditional upon the sanctioning decision issued by the competition authority not regulating the details of the debarment. Otherwise, the scenario contemplated in Article 72(2) LCSP, namely the one in which the law links the debarment to a prior administrative decision, would be rendered ineffective, and the procedure under Article 72(3) LCSP would become an unavoidable step in all cases. 
  
  This interpretation does not fully conform to the wording of Article 72 LCSP or to its internal structure, which conceives the prior indication in the sanctioning decision as the normal scenario envisaged by the legislature, and the procedure conducted by the SABPPas subsidiary and only applicable in the event that the sanctioning decision does not contain any details on the scope and duration of the debarment.
• The granting of powers to the competition authorities is based on a systematic and teleological interpretation of the applicable regulations. In particular, the debarment has not been construed as an ancillary and autonomous sanction integrated into the LDC sanctioning regime, but rather as a specific legal consequence provided for in Article 71(1)(b) LCSP, tied ex lege to the imposition of a sanction for a competition-related infringement. In other words, the sanctioning decision for the distortion of competition does not act as the source creating the debarment, but as a prerequisite for applying a legal consequence that arises directly from the LCSP. 
  
  Therefore, the intervention of the competition authority is limited solely to determining the scope and duration of the debarment. For that reason, the requirement of legal coverage for the authority’s determination of the debarment is fully satisfied in the LCSP, and it is not necessary for that empowerment to be replicated in the LDC. In this regard, the principle of legality does not require that all legal consequences associated with an infringement be housed in the same rule that defines the conduct; legislature may choose to articulate certain consequences, such as the debarment, in the specific legislation that governs the substantive area on which those consequences operate.
• There are also considerations of functional coherence. Since the competition authority has conducted the sanctioning procedure, analyzing the affected market, the duration and seriousness of the conduct, and its effects on competition, it is coherent to allow it to determine the scope and duration of the debarment. This promotes a proportionate application of the measure and prevents automatic or indiscriminate responses that would run counter to the preservation of effective competition.
• The interpretation is fully in line with European Union law, in particular with Directive 2014/24/EU, since the domestic regime preserves the contracting authority’s power to assess and apply the debarment in each case, limiting the competition authority’s role to determining its scope and duration. 
  
  Likewise, Regulation (EC) No 1/2003 recognizes the power of national competition authorities to impose, alongside fines, the legal consequences provided for by national law that are intended to ensure the effectiveness of the provisions prohibiting anti-competitive practices. This provision does not confer an autonomous sanctioning power on the national competition authority, but it allows the authority to specify in its decision the legal effects that are legally attached to an established infringement  if provided by national law, as it is the case in Spain with the system set out under Articles 71 and 72 LCSP.
• The prior case law of the Chamber supports this interpretation. Although it had not expressly addressed the controversy, the Contentious-Administrative Chamber has, in interim relief proceedings, outlined the legal regime governing the debarment. It has confirmed that its enforceability depends on the prior determination of its scope and duration, whether in the sanctioning decision itself or, subsidiarily, in the specific procedure conducted by the SABPP. In doing so, the Supreme Court validated the architecture of this dual legal procedure, ruling out that the subsequent procedure must be followed in every case and reinforcing its merely subsidiary nature.

Practical impact of the judgment and consolidation of administrative practice

With this judgment, the Supreme Court confirms that competition authorities are empowered to determine, in their sanctioning decisions, the duration and scope of the prohibition to contract with the public sector. This ruling ratifies the recent practice followed by both the CNMC and the regional competition authorities, which have already had occasion to adopt sanctioning decisions specifying the scope and duration of the debarment imposed on offenders.

Indeed, after the Articles 71 and 72 LCSP entered into force in October 2015, which implemented Article 57 of Directive 2014/24/EU, the CNMC initially opted to refer the cases to the SABPPso that the Ministry of Finance would determine the duration and scope of the debarment.

However, on July 23, 2023, the CNMC announced their intention to start determining the duration and scope of the debarment, and published Communication 1/2023, which sets out the general criteria for making that determination.

On August 5, 2025, the CNMC set the duration and scope of the contracting ban for the first time in its decision in Case S/0011/23 - Eólica Del Alfoz.

Since then, the CNMC has followed the same practice in four other sanctioning proceedings: S/0015/23 - ICON, S/0006/23 - UFD Contadores, S/0001/23 - Servicios Agencias De Viaje, and S/0011/22 - Distribución Hidrocarburos, and it is foreseeable that it will continue doing so in the future, especially following the recent ratification by the Supreme Court.