European Union diplomats said on Thursday Almunia was likely to secure the post, which involves enforcing strict rules on state aid, preventing protectionism and upholding the 27-country bloc's single market.
"All the talk at the moment revolves around Almunia," a senior official at the Commission's competition directorate told EurActiv.
"It's a done deal. Almunia will get the competition portfolio," one diplomat told Reuters.
As part of the EU's executive European Commission, the commissioner can levy harsh penalties on companies and governments that breach EU rules designed to protect its single market and ensure fair play.
Almunia, 61, has been economic and monetary affairs commissioner since 2004 and is one of European Commission President Jose Manuel Barroso's most trusted allies.
The appointment of such a strong ally underlines the importance Barroso attaches to cracking down on any signs of protectionism or flouting of EU competition rules.
Barroso has made clear he intends to respond to criticism that the EU has not upheld its own strict rules governing its single market since clearing a series of national rescue schemes for banks, carmakers and companies hurt by the credit crisis.
If his appointment is confirmed, Almunia will face many challenges but his economic background and government experience should stand him in good stead, antitrust lawyers said.
"Almunia's profile looks impressive," said Peter Alexiadis, a partner at law firm Gibson, Dunn & Crutcher. "He is an economist by training and he has significant policy development experience at government level, which will provide him with a useful head-start in applying competition policy."
Unresolved bank state aid cases
Almunia has held two ministerial posts in Spain, with responsibility for employment and then public administration.
He will face dozens of unresolved bank state aid cases following the global economic crisis, and banks that have received support during the crisis will have to sell assets during the next five years in return for state aid.
"(Current Competition Commissioner Neelie) Kroes was relatively clear on her approach towards state aid and relatively tough. Almunia will have to develop his own position on this," said one antitrust lawyer who declined to be named.
Kroes has forced bailed-out banks to sell assets, cut market share and temporarily stop paying dividends to ensure the lenders do not get an unfair advantage.
Almunia will need to decide whether to continue Kroes' policy of imposing high fines on companies that abuse their dominant position or fix prices and markets or review the framework.
"On cartels, the challenge is the size of the fines, which has reached such a high level, and whether there needs to be a stricter review," said Thomas Graf, a partner at Cleary Gottlieb Steen & Hamilton. "The fining guidelines have never been approved by any legislator. The question is -- should the Commission be the one to propose the penalty and then decide on the penalty? Should the roles of the Commission as prosecutor, judge and jury be split up?" he said.
Kroes imposed a record 1.06 billion euro fine on US chipmaker Intel in May for illegally shutting out rival AMD and has levied more than 8 billion euros in penalties on cartels since 2005.
Almunia will also have to work closely with his US counterparts to develop a common regulatory approach.
"His services will have the challenge to engage even more with US authorities in a more concrete way in developing a common competition law approach in the field of merger review and unilateral conduct (market power) issues," said Alexiadis.
In a rare spat this month, the US Department of Justice said a plan by U.S. software maker Oracle's to buy computer maker Sun was unlikely to be anti-competitive.
The Commission, which has objected to the deal even though it has already been approved by the U.S. agency, said it had never commented on probes under way in other jurisdictions.
(EurActiv with Reuters)
