In brief
- It is an offence to alter the prices that should result from free competition by means of violence, threats, deception or any other contrivance, and to disseminate news, rumours, false or misleading signals or false data in order to alter the price of a financial instrument or manipulate a benchmark.
- Market manipulation is punishable by imprisonment of six months to six years, a fine of two to five years or a fine calculated on the profit obtained, the loss avoided or the damage avoided where higher, and, in the dissemination of false information and in misleading transactions, requires a profit or loss exceeding €250,000, funds used exceeding €2 million or a serious impact on market integrity.
- Facilitating, for commercial purposes, unauthorised access to radio broadcasting, television or interactive conditional access services is punishable by imprisonment of six months to two years and a fine of six to twenty-four months.
- Not all improper commercial practices are criminal offences: many are subject to administrative penalties or give rise to civil claims.
- The company may incur criminal liability, and may be exempt if it proves that an adequate compliance programme was adopted and effectively implemented before the events.
The offences against the market and consumers covered on this page — price and market manipulation (manipulación del mercado) and unlawfully facilitating access to conditional access services — are forms of conduct punished by the Spanish Criminal Code in order to protect free price formation, the integrity of markets and the economic interests of consumers.
Not all improper commercial practices are criminal offences: many are subject to administrative penalties or give rise to civil claims. Criminal law is reserved for conduct that has the seriousness and meets the requirements laid down for each offence.
What is the offence of price and market manipulation?
It is an offence to alter the prices that should result from free competition by means of violence, threats, deception or any other contrivance. The protection extends to products, goods, financial instruments, spot commodity contracts, benchmarks and other tradable assets.
It is also an offence to disseminate news or rumours, transmit false or misleading signals or provide wholly or partly false economic data for the purpose of altering or maintaining the price of a financial instrument or manipulating a benchmark. This form of the offence may be committed via the internet, the media or by any other means.
Another form of manipulation consists of carrying out transactions, transmitting signals or placing orders capable of giving false indications as to the supply of, demand for or price of a financial instrument, or securing a dominant position in order to fix abnormal or artificial prices.
What is the penalty for market manipulation?
This conduct is punishable by imprisonment of six months to six years, a fine of two to five years (day-fine system) or a fine calculated on the profit obtained, the loss avoided or the damage avoided where that amount is higher.
In the dissemination of false information and in misleading transactions, at least one of the following circumstances must also be present:
- the profit or loss exceeds €250,000;
- the funds used exceed €2 million;
- there is a serious impact on market integrity.
The penalty is aggravated where the conduct is habitual, the profit or loss is of considerable significance or the offender works for a financial institution, a supervisory authority or a market operator.
Offences against consumers involving unlawful devices or services
It is also an offence to facilitate, for commercial purposes, unauthorised access to radio broadcasting, television or interactive conditional access services. This includes the manufacture, import, distribution, sale, rental, making available electronically or possession of equipment or software designed or adapted to enable such access.
Installing, maintaining or replacing such equipment or software receives the same criminal treatment. The distributor need not have personally carried out the technical tampering if they know the unlawful purpose of the device and act for commercial purposes.
Penalties
The penalty is imprisonment of six months to two years and a fine of six to twenty-four months. The same penalty applies to anyone who, with intent to profit, alters or duplicates the identification number of telecommunications equipment or markets fraudulently altered equipment.
Anyone who, without intent to profit, facilitates unauthorised access for third parties or publicly explains how to obtain it may be punished with the fine provided for this conduct.
An end user who uses the equipment or software to access a service without authorisation may be liable under the offence of telecommunications fraud (defraudación de telecomunicaciones), regardless of the amount defrauded.
Difference between a criminal offence, an administrative infringement and a civil claim
An unclear offer, a promotion that omits mandatory costs or an unfair commercial practice may constitute an administrative infringement even if it does not reach the seriousness required to be a criminal offence. The authorities may order the conduct to cease, impose fines and require the situation to be restored or the consumer to be compensated for damage where appropriate.
Criminal liability requires all the elements of the specific offence to be present. For example, an imprecise commercial statement does not automatically amount to market manipulation, and a breach of contract does not in itself become an offence against consumers.
Civil proceedings may allow for refund of the price, termination of the contract, repair of the product or compensation for loss and damage. These consequences may arise even if there is ultimately no criminal conviction.
Can a company be criminally liable?
Yes. Corporate criminal liability is provided for market manipulation and for the criminal conduct against consumers falling within this area.
The company may be liable where the offence is committed in its name or on its behalf, for its direct or indirect benefit, by directors, representatives or persons with powers of organisation and control. It may also be liable for acts of employees where the offence was made possible by a serious breach of the duties of supervision, monitoring and control.
Penalties for the company
The main penalty for the company is a fine:
- For market manipulation it may reach a fine of two to five years or three to five times the profit obtained or that could have been obtained, if that amount is higher.
- For certain offences against consumers, the fine may be calculated on the profit and reach two, three or four times that amount, depending on the penalty provided for the natural person and the offence committed.
Other penalties applicable to legal persons may also be imposed.
Exemption for a compliance programme
The company may be exempt if it proves that, before the events, it had adopted and effectively implemented an adequate compliance programme (organisation and management model), with real controls over its activity, financial resources, decision-making, risk reporting and compliance oversight.
Civil liability
A person who is criminally liable is also civilly liable if they cause loss or damage. Liability comprises restitution, reparation of the damage and compensation for material and non-material loss directly connected with the conduct.
In market manipulation, quantification may require identifying which investors suffered specific damage and what part of the loss is due to the artificial alteration of the price.
In offences involving unlawful devices, the losses caused to the service provider may be claimed, including lost revenue where proven, and the unlawful profit may serve as a reference where direct quantification is particularly complex.
A legal person convicted of the offence is jointly and severally liable in civil terms with the natural persons convicted for the same acts. In addition, the court may order confiscation of the proceeds, instrumentalities or profits of the offence.
Business examples
A company uses several accounts to place coordinated buy and sell orders for a financial instrument, creating the appearance of non-existent demand and causing an artificial rise in the price. If the legal thresholds and the required purpose are present, the conduct may constitute market manipulation.
In another case, a company markets modified decoders that allow unauthorised access to a pay-TV platform. Even if the company did not personally carry out the modification, the knowing distribution of the devices for commercial purposes may be a criminal offence.
Prevention for companies
Companies operating in financial markets should monitor orders, transactions and communications that could influence prices, keep records and detect anomalous patterns.
Companies selling technology products should verify their purpose, authorisation and traceability before marketing them.
In both cases, staff training, oversight of third parties and an internal channel for reporting risks or breaches are essential.
Frequently asked questions
When is market manipulation a criminal offence?
When prices are altered by violence, threats, deception or another contrivance, or when false news or data are disseminated or transactions are carried out that give false indications of supply, demand or price and, in these two cases, the profit or loss exceeds €250,000, the funds used exceed €2 million or there is a serious impact on market integrity.
Is it an offence to sell modified decoders to watch pay TV?
It may be. Facilitating, for commercial purposes, unauthorised access to conditional access services is punishable by imprisonment of six months to two years and a fine of six to twenty-four months, even if the distributor did not personally carry out the technical tampering, provided they know the device’s unlawful purpose.
Is every unfair commercial practice a criminal offence?
No. Many improper commercial practices are subject to administrative penalties or give rise to civil claims. A breach of contract does not in itself become an offence against consumers.
Can the company be exempt from liability?
Yes, if it proves that before the events it had adopted and effectively implemented an adequate compliance programme, with real controls over its activity, financial resources, decision-making, risk reporting and compliance oversight.