In 2016, the National Markets and Competition Commission imposed fines valued at almost 129 million euros to eight companies manufacturers of urinary incontinence absorbers and their employers for agreeing on the prices of these products for 18 years, between 1996 and 2014. These earned them the nickname ‘diaper cartel’. Some companies, not agreeing with the sanctions, appealed them in court, which In successive sentences they have been rejected until last summer Supreme Court (TS) confirmed the last pending penalties.
After the fines imposed by Competition became final, it was the turn of those affected by the price agreement, among which were practically all the autonomous communities. Up to 14 autonomies expressed their intention to appeal millionaire amounts for this fraud and among them is the Community of Madrid. In an initial estimate, those responsible for the regional Administration have calculated the damage to Madrid’s public coffers at 73 million euros due to market practices prohibited for 14 years. This was stated by the general director of Heritage and Contracting, Beatriz MartÃn de la Peña, during an appearance at the regional Assembly.
The regional official explained that she has been working on this matter for months and that the Madrid Health Service (Sermas) already formulated at the time an extrajudicial claim for damages to the sanctioned companies. “The main object of the claim was, on the one hand, the claim for the payment of amounts; and on the other, to make use of the provisions of article 1,973 of the Civil Code, which refers to the suspension of the limitation periods in the judicial actions,” he explained.
“The companies that were involved in this cartel they gave no answer“, stated MartÃn de la Peña, who added that the next step that the Community took was to begin the procedures to analyze what would be the beginning of the judicial actions. The facts in full detail were transferred to the lawyers of the Community of Madrid, to those who were asked for a report that endorsed the viability of the claim, as established by law.
That report from the Law Office arrived a few months ago and highlighted two circumstances. Firstly, it established that although it had been found that The cartel had begun operating in 1996the Community could only claim damages to its Treasury since 2001 because it was then that the State transferred powers in health matters to the region. Secondly, it recommended that an expert opinion be commissioned in which the exact amount of damages to be claimed would be precisely verified “in order to be more successful in the viability of the judicial action.”
The general director of Heritage and Contracting explained that this is “an extremely complex task” for all the data that must be collected and the precision that it must have. “It was considered that the most suitable way was to put out a tender for this contract to make a report that would be prepared by a highly specialized external company,” explained MartÃn de la Peña in the Assembly.
This is an order that has not yet materialized, as stated, because the specifications are in the preparation phase. The regional authority did communicate that the execution period considered for the contract is six months and that it will require about 1,000 hours of work at a rate of 100 euros per hour. The technicians of the company that is awarded the contract will start from the estimate of damages valued at 73 million euros that the regional government has already made, although this information may change depending on the expert examination.
During the appearance of the general director in parliament, in fact, Más Madrid doubted the figure because it was low, alluding to the fact that other communities had claimed larger amountseven higher than 100 million. When the expert analysis is completed and reflected in a document, it will be sent to the courts so that legal actions can be initiated and the Community can recover the public money that was defrauded by the ‘adult diaper cartel’.
