2015 brought significant amendments (the Amendment)2 to the Act on Competition and Consumer Protection (the Act),3 and to secondary legislation with the President of the Office of Competition and Consumer Protection (OCCP) being active in issuing a number of soft-law guidelines.4 The Amendment introduced new legal institutions into Polish competition law such as two-phase merger control proceedings, leniency plus, voluntary submission to a fine (settlement procedure) and remedies. The Amendment also envisaged the possibility to impose fines on natural persons for competition law infringements. Furthermore, it significantly changed the previous provisions of the Act and clarified provisions about which some interpretation doubts had arisen. The Amendment was followed by a number of soft-law guidelines which were either newly adopted – such as guidelines on settlement procedure – or revised in order to accommodate the new legal conditions.
In 2016 the amendment to the Act related to consumer protection came into force.5
In May 2016, Mr Marek Niechciał was appointed to the position of President of the OCCP. In a number of public speeches since his appointment, the new President has referred to four pillars of the OCCP’s enforcement: competition protection, consumer protection, monitoring of state aid and market surveillance exercised along with Trade Inspection. He explained that the OCCP should not focus solely on one pillar, but should allocate resources between all four pillars equally. At the same time, he expressed an intention to increase detection of restrictive agreements. In this area, his main objective is to focus on hard-core restrictions, mostly cartels. Thus, resale price maintenance may be expected to become a lesser priority to the OCCP.
The former President of the OCCP, Adam Jasser, had already announced a plan, with a view to increase cartel detection, to further develop investigative techniques, market screening methods as well as to implement a more economics-based approach, resulting in decisions based on economic evidence. It may be expected that Marek Niechciał will follow the above directions of competition law enforcement. The recent appointment of Mr Wojciech Dorabialski, an economist in the Department of Market Analysis, as a deputy director in the Department of Competition Protection, which deals with antitrust cases, further appears to confirm this approach.
i Enforcement agenda
In 2016, as in 2015, the OCCP focused on consumer protection, in particular in the banking and telecommunications sectors. Less significant activity was observed in the area of restrictive agreements and abuse of dominant position. As regards merger review, the vast majority of the cases were closed in Phase I, which resulted in reducing the average length of proceedings. At the same time, we saw an increase in complex merger cases decided in Phase II.
Published in July 2015, the competition and consumer protection policy statement (the Policy) outlined the main directions of enforcing competition law in Poland.6 Cartels and bid rigging are to be treated as key enforcement priorities. With regard to combating abuses of dominant position, the OCCP is going to concentrate its resources on identifying and eliminating exploitative practices on the local utilities markets. The Policy also proclaimed an individual approach to non-horizontal agreements. The OCCP is expected to intervene only when the economic analysis proves that the anticompetitive effects of such practices outweigh efficiencies arising from the agreements. The approach of the current President of the OCCP seems to be in line with the main directions of competition law enforcement in Poland as outlined in the Policy.
As regards cartels, the OCCP continued to focus on bid rigging and in 2016 issued seven decisions fining undertakings for colluding in tenders. The vast majority of cases concerned cooperation between small entrepreneurs, linked by capital or personal relations, who colluded in local tenders. The findings of the authority were based on indirect evidence, such as similarities in the offers (for instance, the same mistakes), unreasonable bidding patterns (for instance, withdrawing offers without reasonable justification, or not submitting required documents, resulting in offer rejection). Besides bid-rigging cases the OCCP issued one decision concerning price fixing committed by the association of undertakings.
i Significant cases
When ruling on appeals against the OCCP’s decisions concerning bid rigging, the Appellate Court (the second instance court dealing with competition cases) provided valuable guidance as to the assessment of consortium agreements that, despite being explicitly permissible by the provisions of Polish procurement law, under certain circumstances may be anticompetitive. Further guidance comes from the court of first instance, the Court of Competition and Consumer Protection (CCCP), which took a position on the standard of proof that is required from the OCCP when finding a collusive tendering.
A decision concerning price fixing is also worthy of interest as it is one of a few OCCP decisions addressed to an association of undertakings.
The consortium agreements in public tenders7
The Appellate Court set aside the judgment of the CCCP, which had repealed a decision of the OCCP finding that the consortium agreement concluded between two large municipal waste collection companies, in order to jointly participate in a public tender for waste removal services, was in fact an anticompetitive market-sharing arrangement. The Appellate Court considered the CCCP’s indiscriminately lenient approach to the consortia – as being principally exempt from competition law scrutiny – to be unfounded and called for a standard case-by-case analysis of such agreements.
The Appellate Court stated that consortium agreements were a lawful and sometimes even desired form of cooperation. They have clear pro-competitive effects as they enable smaller undertakings to join forces and compete with bigger players. Yet, in order for such cooperation to comply with competition law, it must be proved that each of the consortium members would not be otherwise capable of making individual bids that had a genuine chance of winning a given public tender.
Using evidence in bid-rigging cases
On 28 January 2016, the CCCP upheld the OCCP’s decision finding six companies liable for rigging their bids in a tender concerning the delivery of IT equipment to schools and libraries.8 The OCCP found that six companies formed three consortia that participated in a public tender held by the Marshal Office of the Dolnośląskie voivodeship. The tender bid from one consortium was chosen initially by the tender organiser but then the consortium was excluded for providing a wrongly dated document. Consequently, the tender organiser chose the second, more expensive offer that was actually submitted by the other consortium. The OCCP considered this type of behaviour as a clear sign of collusive tendering. This assumption was further corroborated by other evidence, which showed the existence of strong personal and financial ties between the companies, and contact between the employees of colluding companies.
On 24 May 2016, the CCCP upheld the decision of the OCCP finding two companies specialising in sports facility construction liable for bid rigging in tenders taking place in the framework of sports infrastructure modernisation programmes that the Polish government had been organising with the help of EU funding.9 The OCCP found that two companies displayed typical collusive behaviour, for example, withdrawing the bid or not submitting relevant documents indispensable for the offer to be valid to let the other undertaking with a more expensive offer win the tender. The same mistakes were also identified in some of the bids submitted by them.
In its judgments issued on appeals to the above case, the CCCP confirmed the OCCP’s approach, pursuant to which in the absence of direct proof of the infringement, the authority needed to take into account circumstantial evidence to identify behaviour that was so incompatible with existing market conditions that it could not be explained otherwise than by collusion. The judgments of the CCCP show a full endorsement of a pragmatic and relatively lenient approach towards the standard of proof in proceedings regarding the most hard-core competition infringements. This reflects the approach taken by the European Commission and EU courts in cartel cases where competition authorities face similar difficulties with regard to the possibility of obtaining direct proof and collusive behaviour. As a result, the weight of evidence is based more on its overall consistency than on the value of each individual item of evidence.
An association fined for recommending prices during public tenders
The OCCP issued a decision concerning the Association of Polish Centres of Infertility Treatment and Reproduction Development which recommended prices to its members and encouraged them to cooperate during tenders organised by the Ministry of Health.10
The OCCP stated that the Association’s behaviour amounted to price fixing restricting competition. The evidence collected in antitrust proceedings suggested that the guidelines and recommendations related to the prices submitted in the offer addressed to the Ministry of Health were exchanged at the Association’s meetings and through electronic communications. This case is particularly significant as the OCCP clarified that even a non-binding recommendation may constitute a restrictive agreement.
The decision became final as it was not appealed to the CCCP.
ii Trends, developments and strategies
Major trends and developments in the Polish competition law pertain to the new enforcement mechanisms introduced by the Amendment. At the same time, regrettably, the majority of them have not yet been applied in practice.
It is also worth mentioning that the process of implementation of the Damages Directive is still ongoing, despite the lapse in December 2016 of the period to implement it.
Pursuant to the amended Act an undertaking that submits a leniency application, but cannot obtain full immunity, shall have the possibility to obtain an additional 30 per cent reduction of its fine with regard to the first arrangement on the condition that it provided the authority with information on other arrangements restricting competition in which it participated.11 In such case, the undertaking may obtain full immunity with regard to such other agreements on which it provided information. So far, leniency plus does not seem to be effective as the OCCP has not received any leniency plus applications.
Direct liability of natural persons
Since the Amendment, the Act entitles the OCCP to impose fines on managing persons for deliberately allowing an undertaking, through its actions or omission, to conclude a prohibited arrangement that restricts competition.12 The maximum fine that may be imposed is 2 million zlotys. Managing persons may benefit from leniency and settlement procedures. To date, the OCCP has not dealt with a case in which it was required to impose fines on individuals.
First step in implementation of the Damages Directive
In December 2015, Poland made the first step towards implementation of the Damages Directive as the draft assumptions of the draft of the Act on Actions for Damages for Infringements of the Provisions of Competition Law were published.13 The new Act is aimed at providing claimants with easier access to evidence, clear rules on limitation periods and a wide scope of responsibility for inflicted damage, including damage to indirect purchasers. It will also stipulate that since damages actions in competition cases are highly complicated, they should be resolved by district courts (i.e., the competence of the lowest courts in the judicial hierarchy is excluded) regardless of the value of the dispute. The draft of the Act on Actions for Damages has left the committee phase and is currently being scrutinised by the Council of Ministers, after which it will be passed to Parliament. Its enactment is expected to take place in 2017.
More than two years after the amendments to the leniency programmes entered into force, it might be concluded that still they do not seem to be an effective tool to fight cartels.
Given the relatively low cartel detection in Poland so far, the OCCP is considering alternative ways to encourage whistle-blowers, mostly through employees of undertakings, to report potential competition law infringements. In particular, the OCCP is considering introducing a whistle-blowers’ platform for individuals to anonymously inform the OCCP with information about potential anticompetitive arrangements.14 Given that individuals may not have sufficient motivation to share with the OCCP this kind of information, the OCCP is planning to offer rewards to whistle-blowers (as, for example, in Hungary). The reward would either be a lump sum of money, representing a given percentage of a fine imposed on undertakings concerned in the antimonopoly proceedings initiated on the basis of information received from a whistle-blower, or a monthly payment. It is not yet known if and when this enforcement tool will be introduced.
III ANTITRUST: RESTRICTIVE AGREEMENTS AND DOMINANCE
i Trends, developments and strategies
As regards the enforcement of restrictive agreements, no substantial case law development was seen in 2016. Besides the cartel decisions described above, the OCCP issued only two decisions (discussed below) concerning resale price maintenance.
The decreasing number of decisions issued by the OCCP in relation to restrictive agreements (and also to abuse of dominant position) results from, according to the President of the OCCP, the adoption of soft measures (i.e., informal warnings being sent to undertakings calling for change of the behaviour allegedly amounting to a competition infringements). This procedure is applied in antitrust proceedings concerning small local markets. So far it has never been applied to hard-core restrictions such as cartels, but rather only to small-scale activity. It is yet to be seen whether such actions will translate into better competition law enforcement.
ii Significant cases
Given the relatively poor records of the OCCP’s case law concerning restrictive agreements, below we provide descriptions of two rather standard cases concerning resale price maintenance. The OCCP established the existence of restriction of competition, among other things, on the basis of suppliers’ behaviours consisting of the use of retaliation mechanisms and additional incentives for the distributors to follow retail prices indicated by the suppliers.
At the same time, an interesting judgment by the CCCP should be mentioned concerning restrictions of online sales as it contributes to the current mainstream discussions at the EU level on competition restrictions in digital markets.
Ski traders fined for resale price maintenance15
The OCCP imposed a fine of 72,000 zlotys on Fordex, a ski equipment wholesaler in Poland, for a retail price-fixing agreement concluded with Intersport, a retailer (Fordex and Intersport jointly, ‘the parties’). The OCCP found that the agreement lasted at least from 2007 to 2012. Intersport avoided being fined as it successfully applied for leniency after a dawn raid conducted by the OCCP during the explanatory proceedings.
On the basis of evidence collected during the dawn raid and Intersport’s leniency application, the OCCP established that recommended retail prices included in Fordex’s price lists were, in fact, the minimum prices for Nordica sport equipment to be applied by Intersport. The OCCP found that the parties discussed and agreed on retail prices during sport equipment trade fairs, during phone calls and also by email.
During trade fairs, the parties exchanged information on future retail prices. Fordex also encouraged Intersport to apply agreed retail prices for Nordica sport equipment. At the same time, Fordex insisted that Intersport stopped applying discounts, which had not been previously agreed by the parties, as Fordex received complaints from other distributors about Intersport lowering the prices. In fact, the OCCP found that Intersport only twice did not comply with the price-fixing arrangements. In response to that, Fordex did not implement any retaliation mechanisms, but it warned Intersport by email.
The above findings are further confirmed by the emails exchanged between the parties and between Fordex and its distributors, which are cited in the decision.
Cleaning products and hygiene materials retailers fined for resale price maintenance16
The OCCP imposed a total fine exceeding 3.2 million zlotys on seven undertakings that conduct business activity on the market for sale of cleaning products and hygiene materials for institutional customers, for a retail price-fixing agreement concluded with SCA Hygiene, a producer of cleaning products and hygiene materials under the Tork brand. The OCCP found that the agreement lasted from at least 2010 and ended in 2013. One of the undertakings was able to avoid a fine as it successfully cooperated with the OCCP, simultaneously applying for leniency during the explanatory proceedings.
The OCCP, based on the evidence collected during the proceedings, established that SCA Hygiene acted as an initiator and coordinator of the restrictive agreement. The evidence showed that SCA Hygiene provided its retailers with the price list, which determined the minimum prices. SCA Hygiene envisaged negative consequences for unsubordinated behaviour of its retailers. The undertaking also monitored the prices of other parties to the agreement and when they were consistent with the agreed value, SCA Hygiene rewarded them with rebates. The OCCP had no doubt that in those circumstances other parties expressed their tacit acquiescence to entering into an anticompetitive agreement through implementing the prices indicated by SCA Hygiene.
Vertical restraints in respect of online sales infringe competition by object
In December 2015, the CCCP upheld the decision of the OCCP finding that the agreement between Royal Canin and its five distributors restricting the sales channels of dietary animal feed mixtures constituted an infringement of competition law.17 The CCCP underlined that excluding some undertakings from a selective distribution system needs to be objectively justified (e.g., by the necessity to ensure the quality of the offered products). At the same time, in the absence of an objective justification, such agreements are considered as restrictions by object. Not having found any justification for the measures introduced by Royal Canin, the CCCP supported the conclusions reached by the OCCP.
Promoting e-commerce is currently one of the main priorities of EU policy, which sees it as a powerful stimulus for innovation and competitiveness. The judgment proves that combating restrictions in online sales is an important element of competition policy. The CCCP has sent a clear signal that any restrictions on online sales necessitate a strong objective justification.
iii Evidence from a criminal investigation used in antimonopoly proceedings
The OCCP analysed a tender for the purchase and delivery of mobile fingerprint readers announced by the Central Headquarters of Poland’s Police Department (KGP) and found that two bidders agreed on the bid’s price.18
To corroborate its findings the OCCP relied on some evidence collected by the prosecutor in the course of the criminal investigation conducted with regard to the same tender (bid rigging is a criminal offence in Poland). Anticipating potential objections on failing to support antimonopoly charges with direct evidence, the authority held a hearing and examined witnesses who were already being questioned in the criminal investigation. As they refused to provide any information, the authority concluded that documents coming from the criminal investigation were sufficient to conclude that the undertakings concerned engaged in bid rigging.
The decision is not final.
iv Duty to cooperate during dawn raid
In April 2016, the Supreme Court19 reversed the judgments of CCCP and Appellate Court that annulled a fine imposed by the OCCP on a manufacturer of domestic detergents for absence of cooperation during a dawn raid. The Supreme Court sided with the OCCP and concluded that the removal of an electronic document from its original folder and transferring it to a ‘bin’ folder, after the beginning of a dawn raid, may constitute an absence of cooperation with the competition authority and, as a result, may be subject to a monetary fine.
The judgment of the Supreme Court provides valuable guidance on how a duty to cooperate with the OCCP during a dawn raid should be interpreted. At the same time, the adopted approach seems to be very formal and strict, in particular the Supreme Court’s view that the actual effect of the behaviour is irrelevant for the assessment of compliance with the duty to cooperate. Furthermore, the wording used by the Supreme Court that an undertaking is obliged to help the OCCP and cooperate with a view to realising the objective of the dawn raid may raise questions as to whether the duty to cooperate is not defined in too excessive a manner.
v Abuse of dominant position
In 2016 the OCCP issued total of 15 decisions regarding abuse of dominant position, but fined only four undertakings. The vast majority of cases concerned local utilities markets. This low number of decisions and fines is again, according to Mr Niechciał, the effect of application of soft measures applied in particular to abusive practices of cemeteries’ administrators consisting of foreclosing access to the funeral services market.
vi Abuse of dominant position on the rail freight market
The OCCP issued a decision imposing a fine of 14.2 million zlotys on PKP Cargo for abusing its dominant position on the rail freight market.20 PKP Cargo set discriminatory conditions for granting rebates. Direct competitors of PKP Cargo were granted lower rebates for purchase of freight services than companies that did not compete with the dominant company. The case dates back to 2009 when the authority for the first time fined PKP Cargo for this practice. The case reached the Polish Supreme Court, which found that the OCCP had widened the scope of the charge during the course of the proceedings and remanded the case back to the CCCP. The court, taking into account the concerns expressed by the Supreme Court, made the OCCP limit the proceedings to the scope that was established in its initial resolution initiating the proceeding.
vii Fine for non-compliance with the OCCP’s commitment decision
The OCCP imposed a fine of approximately 10.4 million zlotys on the state-controlled gas company for not complying with one of the commitments imposed in its decision of December 2013.21 The company was obliged to modify certain provisions objected to by the authority. Although it removed said provisions, it replaced them with new terms producing the same effects. The OCCP rejected the company’s arguments that exercising the commitment in question could destabilise its financial position.
Statements of objections (SOs)
In September 2015 the OCCP issued guidelines in which it committed to provide investigated undertakings with a ‘detailed justification of charges’.22 The new procedure is applied to proceedings commenced after 1 September 2015. An SO will be issued if the authority intends to issue a decision declaring a competition infringement (either a restrictive agreement or an abuse of dominant position) or infringement of consumers’ collective interests.
The authority issues the SO once it collects all evidence. The document shall contain information on factual and legal grounds for the objections presented and evidence supporting them. The OCCP will also declare whether it actually intends to impose a fine on the undertaking, and what mitigating or aggravating factors shall influence the amount of the fine. However no exact amount of fine will be given. In addition, any remedies contemplated by the OCCP will be included in the justification.
Pursuant to the Act, the OCCP is entitled to offer, ex officio or upon the request of the party to the antimonopoly proceedings, access to a settlement procedure.23 The main criterion for the authority to apply this procedure is speeding up the proceedings. A decision on whether to make a settlement offer is made once all evidence sufficient for issuing a decision is collected. An effective submission or a declaration concerning voluntary submission to a fine shall result in a 10 per cent reduction of the fine that would otherwise be imposed on the undertaking. A party benefiting from a settlement procedure still has the right to lodge a complaint against the decision to the court. This, however, will result in the loss of the 10 per cent reduction. Both the authority and the undertakings are entitled to withdraw from the settlement procedure at any stage. To date, no decision within the settlement procedure has been issued.
Vertical restrictive agreements and abuse of dominant position may be considered as of a lesser importance to the OCCP and most likely will continue to be so in the years to come. This is in line with European Commission’s approach, as the European Commission is not likely to become involved in the investigations of restrictive practices where the parties have small market shares. This approach has significant benefits in terms of reasonable usage of public resources. As for legislature, it follows from the Policy that the authority will be lobbying for relevant changes to law to enable the authority to use all evidence (including transcripts of taps) gathered by investigative and prosecuting authorities in the course of operational inspections.
IV SECTORAL COMPETITION: MARKET INVESTIGATIONS AND REGULATED INDUSTRIES
In April 2016 the OCCP published results of the market investigation regarding the heating oil market in Poland. The aim of the investigation was to determine the level of market concentration for the primary heating oil, and to define the relevant product and the geographical markets.
The OCCP concluded that light and heavy primary heating oil belong to separate relevant markets encompassing the entire territory of Poland. The OCCP investigated both upstream and downstream markets. At the upstream level, the OCCP found the markets for the primary sale of heating oil as highly concentrated. Therefore, following the market investigation, the OCCP aims to monitor the situation on the downstream market for distribution of light primary heating oil to end customers.
i Trends and development
Given the OCCP’s policy of declared openness and transparency, guidelines on publishing results of market inquiries were issued.24 In the guidelines, the authority announced that information on the results of all market inquiries will be published. The scope of the information presented to the public may vary, depending on the educational value of the results and the scope of business secrets of undertakings questioned in the course of the inquiry. While deciding on the scope of information, the OCCP will also take into account the efficiency of proceedings conducted by the authority in which the results of the market inquiries may be used.
In the Policy, the OCCP proclaimed enforcement of competition law aimed at network regulated industries such as telecommunications and energy. A framework of the single European telecommunications market is currently being discussed at the EU level. In the view of the OCCP to ensure that telecommunications companies will compete on equal terms in the whole of the European Union, it is necessary to facilitate access to broadband network and to allocate frequencies in a pro-competitive manner. In the light of the above, it may be expected that the OCCP will be seeking opportunities to support regulatory bodies in achieving said objectives.
V STATE AID
The European Commission approved several important state aid measures concerning Poland in 2016, including prolongation of the bank guarantee and credit union orderly liquidation schemes, and the restructuring aid scheme for small and medium-sized enterprises.
Furthermore, the European Commission concluded its assessment of the Polish support scheme for coal mining in the period 2015–2018, declaring it compatible with the internal market.25 The support will eventually amount to up to €1.8 billion and is aimed at facilitating the process of closing uncompetitive coal mines in Poland. The support scheme involved aid for closure of two coal mines, for measures to mitigate the environmental impact of coal production in Poland and for measures to re-cultivate the mining areas. Poland will also support coal mines by covering several social costs incurred during their liquidation.
In August 2016, the European Commission decided that the Polish certificates of origin system to support energy production from renewable energy should be considered as state aid.26 According to the European Commission, Poland grants the producers of electricity from renewable sources free intangible assets. Such certificates have economic value and can later be traded, due to the fact that Poland allows electricity producers to use them to meet the green energy quotas and avoid paying the administrative fees which are to be paid when the quotas are not met. Although the trade of the certificates of origin is performed between private parties, the European Commission indicated that such a trade is under the control and management of the Polish state. The Polish certificates of origin system has been operating since 2005. Poland did not consider this as state aid and, therefore, only notified it in 2013 for legal certainty reasons. The European Commission concluded that, despite Poland already putting the certificates of origin system into effect, it is compatible with the internal market.
In addition, in September 2016, Poland’s taxation policy raised the European Commission’s concerns as to the compatibility of Polish tax on the retail sector with the internal market.27 The European Commission has opened an in-depth investigation into this tax and ordered Poland to suspend its application. The European Commission has concerns that the application of the progressive tax rates based on turnover confers a selective economic advantage for companies with lower turnover and, therefore, involves state aid within the meaning of the EU rules. Poland suspended the application of the tax stemming from the European Commission’s decision.
The European Commission also considered Polish broadband infrastructure development28 and small and medium-sized enterprises regional investment29 schemes as compatible with Regulation 651/2014 – the General Block Exemption Regulation.
VI MERGER REVIEW
i Trends, developments and strategies
The Amendment introduced a number of significant changes to the Polish merger control system including the two-phase proceedings, revised rules on turnover calculation and amendments to procedural aspects related to remedies. It proved to have positive effects for business, in particular as it resulted in reducing the average length of proceedings before the OCCP. The average proceedings in 2016 lasted 38 days, and remained at a comparable level to 2015, which was almost twofold lower than in 2014.
The OCCP issued 196 merger control decisions in 2016 and most often reviewed cases from the real estate, food and beverage and automotive sectors (20, 18 and 15 cases respectively).
We saw an increased number of complex merger cases in 2016, in 10 of which Phase II proceedings are being instigated. In the extended review proceedings, the OCCP widely uses its market testing competencies aimed at verification of the relevant market definitions proposed by notifying parties or at obtaining the views on the notified transaction from other stakeholders. The OCCP largely relies on the results of such tests. The market testing significantly increases the duration of Phase II proceedings, which on average last approximately five months.
The OCCP is also widely using the SO, an institution which was introduced in the 2015 review. In 2016, an SO, whereby the PCA informed the notifying party of its views regarding potential competition concerns resulting from the concentration, was issued in six proceedings. After an SO was issued, one case was cleared unconditionally, in two of the cases the PCA issued a conditional decision, and in three of the cases the notifying party withdrew the notification.
In concentrations where competition concerns arise, the OCCP continues to rely on ‘fix-it-first’ remedies ordering the merging parties to limit the scope of the notified transaction in order to address the significant impediment to the competition. However, in the most recent conditional decision in the Eurocash/Eko Holding case30 from December 2016, the OCCP applied, for the first time since 2014, a remedy not consisting in altering the structure of the transaction (i.e., a simple divestiture remedy).
ii Significant cases
The OCCP issued two conditional decisions, both of which were issued in December 2016 and pertained to the contemplated acquisitions by Eurocash. In both cases, lasting 12 and nine months respectively, the OCCP carried out extensive market tests.
Eurocash’s activity primarily consists of the wholesale distribution of tobacco products, dairy, frozen food and cosmetics, as well as agricultural chemicals, and retail sale of fast-moving consumer goods (FMCG). Its acquisition of PDA,31 an alcoholic beverages wholesaler, was considered as leading to competition concerns on the local market for the wholesale of beverages exceeding an 18 per cent alcohol content by specialised warehouses. After the acquisition, Eurocash’s market share would significantly exceed 40 per cent on that market (i.e., the threshold above which dominance is presumed under Polish law). The concentration was cleared under the condition that the parties excluded the PDA’s respective warehouse from the scope of the transaction. Interestingly, the OCCP dismissed Eurocash’s initial proposal to discontinue the sale of spirits exceeding 18 per cent alcohol content from the acquired PDA warehouse and its own neighbouring warehouse. Eurocash claimed that such a remedy would be more proportionate than divestiture of the PDA’s Pabianice warehouse or its exclusion from the scope of the transaction. This is because the PDA’s warehouse also sold goods belonging to the other relevant markets on which the OCCP did not identify any competition concerns. However, the OCCP concluded that such a remedy would not be sufficiently effective to address competition concerns stemming from the concentration.
The OCCP also conditionally cleared Eurocash’s acquisition of Eko Holding, the FMCG retailer.32 Having identified competition concerns on the three local retail markets for the sale of FMCG, out of 26 identified in the case, the OCCP accepted Eurocash’s proposal to divest three Eko Holding shops. While analysing the market power of Eurocash, the OCCP also considered outlets from within the Eurocash franchising network. The OCCP included a commitment for Eurocash to obtain its approval for a potential purchaser of those outlets.
Although the OCCP did not forbid any concentration in 2016, the notifying party withdrew the notification in three cases after the OCCP issued an SO.33 In these cases, most likely, the commitment proposals were not satisfactory enough to mitigate the competition concerns identified by the OCCP.
In July 2016, the OCCP issued a statement of objection concerning the establishment of a joint venture to build and operate a pipeline which was planned to connect the Russian Baltic Sea coast and a final destination near Greifswald in Germany – the Nord Stream 2. The OCCP considered that the transaction might potentially strengthen Gazprom’s market power with regard to gas deliveries to Polish customers. The notification jointly filed by Gazprom, Unipiper, Engie, OMV, Shell and BASF was withdrawn in August 2016.
The notifications were also withdrawn in two other proceedings, pertaining to the intended acquisition of the Złote Tarasy shopping centre in Warsaw by Unibail-Rodamco and Grupa Silikaty, the Polish silicates business of CRH, by Xella.
It is not anticipated that there will be a major shift in the current merger control policy in 2017.
2016 proved that consumer protection continued to be the OCCP’s enforcement priority. The antitrust decisional practice of the OCCP remains undeveloped and it is rather focused on bid-rigging cases. The OCCP is analysing various methods of improving cartel detection, including introducing rewards for whistle-blowers. Given its declared focus on hard-core competition law infringements, scrutiny of resale price maintenance is expected to become of less importance to the OCCP. Decisions concerning abuse of dominant position confirm that the main sector of enforcement in this respect remains the utilities sector, but at the same time actual enforcement is limited due to the declared application of soft measures. Considering the relative strength of the Polish mergers and acquisitions market, the OCCP was active in the field of merger review.
1 Anna Laszczyk and Wojciech Podlasin are associates at Linklaters C. Wiśniewski i Wspólnicy sp. k.
2 Act of 10 June 2014 amending the Act on Competition and Consumer Protection and the Civil Procedure Code (Journal of Laws 2014, item 945).
3 The Act of 16 February 2007 on Competition and Consumer Protection (consolidated text: Journal of Laws of 2015, item 184, as amended).
5 Act of 5 August 2015 on the Change of Act on Competition and Consumer Protection and certain other acts (Journal of Laws from 2015, No. 45, item 1634).
7 Judgment of the Court of Appeal of 8 June 2016, No. VI ACa 651/15.
8 Judgment of the CCCP of 28 January 2016, No. XVII AmA 12/14.
9 Judgment of the CCCP of 24 May 2016, No. XVII AmA 148/14.
10 Decision of the OCCP of 1 September 2016, No RŁO 4/2016.
11 Article 113d of the Act.
12 Article 106a of the Act.
14 Available at www.uokik.gov.pl/news.php?news_id=12654&news_page=1.
15 Decision of the OCCP of 23 December 2016, No. DOK 1/2016; decision is subject to an appeal.
16 Decision of the OCCP of 30 December 2016, No. DOK-2/2016; decision is subject to an appeal.
17 Judgment of the CCCP of 21 December 2015, No. XVII AmA 93/14.
18 Decision of the OCCP of 30 December 2014, No. DOK-8/2014.
19 The judgment of the Supreme Court of 21 April 2016, III SK 23/15.
20 Decision of the OCCP of 31 December 2015, No. DOK-5/2015.
21 Decision of the OCCP of 23 September 2015, No. DOK-3/2015.
23 Article 89a of the Act.
25 The European Commission’s decision of 11 November 2016 in case SA.41161.
26 The European Commission’s decision of 2 August 2016 in case SA.37345.
27 The European Commission’s decision of 19 September 2016 in case SA.44351.
28 The European Commission’s decision of 15 April 2016 in case SA.43484.
29 The European Commission’s decision of 10 March 2016 in case SA.43142.
30 Decision of the OCCP of 23 December 2016, No. DKK-191/2016.
31 Decision of the OCCP of 14 December 2016, No. DKK-180/2016.
32 Decision of the OCCP of 23 December 2016, No. DKK-191/2016.
33 Proceedings No. DKK2-421/52/15/MT/MIW, DKK1-421/14/15/MAB and DKK1-422/22/15/MAB.