I ENFORCEMENT POLICIES AND GUIDANCE
i Key policies and guidance
Since his appointment in May 2016, Marek Niechciał, the president of the Office for Competition and Consumer Protection (OCCP) (the Polish competition authority), has referred in a number of public speeches to four pillars of the OCCP's enforcement: competition protection, consumer protection, monitoring of state aid and market surveillance exercised along with trade inspection.2 He explained that the OCCP will not focus solely on one pillar but that resources should be allocated equally between all four pillars.
Mr Niechciał's approach seemed to be in line with the direction that competition law enforcement is following in Poland, which was outlined in the Policy for Protection of Competition and Consumers published in July 2015 (the Policy).3 With a view to improving the detection of cartels, the OCCP announced the development of investigative techniques and market screening methods. It also announced a more economics-based approach, resulting in decisions based on economic evidence. The appointment in November 2016 of Wojciech Dorabialski – an economist and former deputy director of the Department of Market Analysis – as a deputy director and then director in the Department of Competition Protection, which deals with antitrust cases, confirmed this approach.
At the end of 2016, Mr Niechciał announced an important change to the OCCP's operating strategy; that the OCCP plans to shift from the current soft approach to more decisive action, which indicates the imposition of higher financial penalties for competition law infringements. Mr Niechciał concluded that the initial rates of the imposed fines were clearly too low and the guidelines on the method of setting fines needed to be revised. Mr Niechciał also announced that the OCCP will introduce a programme to enhance cooperation with whistle-blowers.
Despite this announcement, the new strategy has not yet brought any significant changes to the OCCP's practice.
In the first 10 months of 2018,4 the OCCP imposed fines for restrictive agreements, which amounted to 1 million zlotys, whereas the total amount of fines imposed in 2017 was 136.9 million zlotys. The majority of the latter figure was made up of a fine imposed on the manufacturers of wood-based products for their alleged participation in a cartel – all the other remaining fines amounted to just 900,000 zlotys. However, the OCCP emphasises that the number of penalties imposed during part of a year often does not adequately reflect what the total for the whole year will be.
The OCCP continued its increased level of scrutiny of the behaviour of undertakings. In the whole of 2017, it conducted nine unannounced inspections on undertakings' premises whereas in the first 10 months of 2018, based on publicly available sources, there were six inspections.
ii Statutory framework
Article 6, Paragraph 1 of the Act on Competition and Consumer Protection (ACCP) prohibits agreements between undertakings, concerted practices, and resolutions or other acts of associations of undertakings that have as their object or effect the elimination, restriction or other infringement of competition. The wording of this provision is based on Article 101 of the Treaty on the Functioning of the European Union (TFEU); however, besides the infringements listed in Article 101 of the TFEU, Article 6 of the ACCP also provides examples of other prohibited arrangements (e.g., restricting access to the market, eliminating from the market undertakings that are not parties to an agreement, and bid rigging). Should an alleged arrangement affect trade between EU Member States, the OCCP is empowered to apply Article 101 of the TFEU. A wilful or unintentional violation of Article 6 of the ACCP or Article 101 of the TFEU can be punishable with a fine of up to 10 per cent of the infringing undertaking's turnover in the year preceding the year of the OCCP's decision. In addition, the 2015 amendments to the ACCP introduced the direct liability of managing persons for deliberately allowing an undertaking, through their actions or omissions, to conclude a prohibited restrictive agreement. A managing person is understood to be a person in charge of an undertaking (i.e., a member of a management body, a person performing a managerial function or a person who, although he or she does not formally have a managerial function, does have a decisive influence on the undertaking's conduct). Such persons can be subject to financial penalties of up to 2 million zlotys. Although penalties under the ACCP are of an administrative nature, bid rigging with regard to public tenders also constitutes a criminal offence sanctioned under the Polish Penal Code by up to three years' imprisonment.5
The Policy also sets out the need to create a network of various state agencies, non-government organisations, and investigative and prosecuting authorities as well as undertakings and their associations for competition and consumer protection. The OCCP has entered into agreements on cooperation with the general prosecutor and the president of the Internal Security Agency. On the basis of these agreements, parties will exchange information and coordinate actions aimed at identifying, preventing and combating law infringements. Time will tell how this rather grey area regarding cooperation between state agencies in Polish competition law develops, both concerning the decisional practice of the OCCP and legislative changes. With regard to the former, in October 2017, the OCCP issued a decision on the proceedings that were instigated on the basis of evidence gathered previously in the criminal proceedings. The relevant pieces of evidence were also included in the OCCP's case file.6 With regard legislative changes, the process of discussing a bill aimed at enhancing the information-sharing mechanism between the OCCP and other public authorities was launched in October 2018. The bill obliges public authorities to share information with the OCCP that is relevant to the implementation of the OCCP's statutory objectives. There is an emphasis in the bill on the OCCP's cooperation with the Polish Financial Supervision Authority as both authorities will be permitted to share with each other information that is covered by statutory immunity, such as banking secrecy.
II COOPERATION WITH OTHER JURISDICTIONS
The OCCP regularly cooperates with the European Commission and national competition authorities of the other Member States through the European Competition Network (ECN).7 OCCP officials participate in the activities of many working groups within the ECN, including the cartel group. In 2017, the OCCP prepared answers to 41 requests for information (RFI) made by other competition authorities. It also made five RFIs.8
The OCCP is a member of the International Competition Network (ICN), a platform of cooperation of more than 130 competition authorities from all over the world. Within the ICN, OCCP officials have participated in, inter alia, the cartel working group. Officials have also been involved in an update of information about legislation currently in force with regard to combating cartels.
The OCCP is active in the OECD, one of the most important international forums for discussing competition policy and law.
i Extraterritorial discovery
In principle, information gathered by the OCCP during antitrust proceedings cannot be used in other proceedings conducted on the basis of provisions other than the ACCP; however, there are exceptions to that rule, including regarding exchanges of information with the European Commission and the competition authorities of Member States on the basis of Regulations (EC) No. 1/2003 and No. 2006/2004. In accordance with Article 70 of the ACCP, information obtained by the OCCP in relation to a settlement procedure or as a result of a leniency application cannot be disclosed to, inter alia, other competition authorities unless the undertaking concerned grants its written consent to such disclosure. The exemption relates to disclosure within the ECN based on Regulations No. 1/2003 and No. 2006/2004,9 and is subject to specific provisions and safeguards provided in the Commission's notices and guidelines.
Article 55, Paragraph 1 of the Constitution of the Republic of Poland prohibits the extradition of Polish nationals, with exceptions set forth in Article 55, Paragraph 2 of the Constitution. Paragraph 2 provides that individuals may be extradited only if (1) the possibility arises from an international agreement ratified by Poland or a national act implementing a legal act of international organisation, (2) the offence was conducted outside Poland and (3) the offence constitutes a crime under Polish law. Considering that antitrust violations, with the exception of bid rigging, are not criminalised in Poland, potential extradition would be possible only if a Polish individual participated in bid rigging outside Poland.
III JURISDICTIONAL LIMITATIONS, AFFIRMATIVE DEFENCES AND EXEMPTIONS
In accordance with established court rulings and Polish jurisprudence inspired by the rulings of the Court of Justice of the European Union, the application of Polish competition law depends on where the anticompetitive effect takes place and not where the agreement was concluded. Thus, Polish law applies to agreements or concerted practices having an impact on competition in Poland irrespective of whether the conduct occurred in Poland or abroad. Consequently, the OCCP may impose fines on foreign undertakings and individuals who have infringed competition law outside Poland if the infringement affects competition within the Polish territory.
ii Undertakings concerned
Fines for breaches of the Polish antitrust rules are capped at 10 per cent of the turnover of the undertakings concerned. The basis for the calculation of the cap is the turnover of the infringing undertaking and not that of the whole capital group to which it belongs. Thus, the parent company is not liable for the actions of its subsidiaries as long as it is not involved in the prohibited conduct. If the fined undertaking did not generate any turnover in the year preceding the year of the decision or its turnover was below €100,000, the OCCP takes into account the average turnover generated in the past three years. If no turnover was generated in the past three years, or the average turnover was below €100,000, the maximum amount of the fine cannot exceed €10,000.
iii Affirmative defences and exemptions
Although exemptions are available for infringements of the prohibitions set forth in Article 6, Paragraph 1 of the ACCP (Article 8, Paragraph 1 of the ACCP constituting the equivalent of Article 101(3) of the TFEU), it is highly unlikely that such exemptions could be effectively applied to cartel arrangements.
IV LENIENCY PROGRAMMES
A leniency programme was introduced in Poland in 2004. However, the current version was implemented in 2015 through an amendment to the ACCP.
In the past, the leniency programme did not achieve the expected number of admissions of breaches of competition law, in exchange for immunity from or reductions of fines, which would have triggered the instigation of cartel proceedings. Between 2005 and 2015, there were only 63 leniency applications. The amendments to the ACCP that came into force in January 2015 were aimed at, inter alia, making the leniency programme more attractive to undertakings and managers through the introduction of a new leniency plus procedure, leniency for natural persons and advantageous modifications to the rules on reducing fines for companies that cannot obtain full immunity.
The regulation seemed not to have achieved the intended effects because it did not lead to a significant increase in the number of leniency applications. Only three applications were made in 2016 and just nine in 2017. The OCCP therefore took further steps in the fight against cartels and introduced a new pilot programme in April 2017, enabling individuals to report restrictive practices anonymously. The programme was modelled on the whistle-blower tool that is already being used by competition authorities in some European countries and was recently introduced by the European Commission. According to the OCCP, the implementation of this system should help to improve the effectiveness of detecting restrictive agreements, which constitutes one of the most important roles of the OCCP. The OCCP has reported a significant number of notifications received from whistle-blowers and pledges its continued reliance on this source.
The absence of sufficient protection for whistle-blowers constitutes a principal weakness in the Polish pilot programme, as has been raised by competition lawyers. Unlike whistle-blower systems in other countries, the Polish programme does not put a substantial emphasis on the protection of a whistle-blower's identity. Therefore, the current form of the programme could be a reason why individuals are not notifying the OCCP of antitrust violations. Being aware of these concerns, the OCCP has announced its intention to address them by introducing legislative changes designed to ensure that the concept of a whistle-blower is incorporated into the ACCP. It is as yet uncertain whether whistle-blowers will be granted awards to encourage them to use the tools available against restrictive agreements.
In 2017, the OCCP updated its guidelines on the leniency programme. The guidelines had been created in 2009 to increase the transparency of provisions of both the ACCP and Regulation of the Council of Ministers concerning the mode of proceeding with applications by undertakings for immunity from fines, or a reduction, and to present uniform procedures applied under the leniency programme.
The current version of the guidelines includes new sections concerning the institutions incorporated into the ACCP in 2015 (i.e., leniency for individuals and leniency plus). Moreover, the guidelines provide practical tips on what to include in the description of a restrictive agreement, define all types of evidence determined in the ACCP and describe in more detail leniency applicants' obligations. The document also provides a number of examples that illustrate the ACCP provisions, and is accompanied by leniency application templates.
As regards basic assumptions regarding the Polish leniency programme, immunity from fines and a reduction in the amount of fines can be granted not only to the participants in cartels (i.e., competitors) but also to members of other restrictive agreements. The main rule provides that only the undertaking that is first to submit a leniency application can apply for complete immunity from a fine. For full immunity, besides being the 'first in the queue' of those applying for leniency, the applicant:
- must submit evidence sufficient for the OCCP to instigate an antitrust proceeding or information allowing the OCCP to obtain such evidence; or, if the application was filed after the instigation of an antitrust proceeding, evidence that substantially contributes to issuing a decision, or information allowing the OCCP to obtain such evidence;
- may not be an undertaking that has induced others to enter into a prohibited arrangement (the initiator may benefit from full immunity);
- may not disclose information about the leniency application;
- is obliged to cease participation in the prohibited arrangement no later than immediately after filing the notification; and
- is obliged to fully cooperate with the OCCP, in particular to provide on its own initiative or at the request of the authority all information and evidence regarding the prohibited arrangement that is or may be at its disposal, not create obstacles for its employees or managers in relation to them providing explanations, not destroy, falsify or hide evidence or information relating to the case, and not inform anyone about the filing of the leniency application without the authority's consent.
Undertakings that do not cumulatively fulfil the conditions listed under points (a) and (b) can count on their fine being reduced, the amount of which is related to the fine that would actually be imposed on it. The second applicant can therefore receive a reduction of up to 50 per cent, the third up to 30 per cent, and the remaining applicants up to 20 per cent of the fine established on the basis of the guidelines on the method of setting fines for anticompetitive practices (the Fines Guidelines). The Fines Guidelines help companies make a preliminary estimate of the possible amount by which their fine will be reduced if they apply for leniency.
i Leniency plus
An undertaking that has submitted a leniency application but has not obtained full immunity may obtain an additional fine reduction of 30 per cent with regard to the first agreement in question on the condition that it provides the OCCP with information about any other restrictive agreements to which it is a party. In such a case, the undertaking can be granted full immunity with regard to another agreement about which it provided information.
ii Leniency for individuals
Under the ACCP, fines for participation in a cartel can be imposed on managing persons. To encourage these persons to provide information about forbidden agreements, the ACCP provides for a leniency programme also being available to persons who would be liable for the above-mentioned infringements. To that end, the leniency application submitted by the undertaking is also submitted on behalf of all managing persons that would be the subject of the OCCP proceeding in that matter. Individuals who fully cooperate with the OCCP may be granted full immunity or a reduction of the fine, even if the undertaking itself does not fulfil the conditions for lenient treatment.
An undertaking that wishes to admit that it is participating in an illegal agreement and enter into cooperation with the authority can submit an abridged application (or marker). This application need not contain all the required information, and the undertaking can submit it before it obtains all the information or evidence required to submit a 'full' application, which can often be time-consuming. Submitting a marker enables the undertaking to 'occupy a place in the queue' of those applying for leniency. A precondition for taking advantage of the programme is that an application must be completed within the time frame specified by the OCCP.
The ACCP also provides the option of filing a simplified application, the purpose of which is to secure a 'place in the queue' for an undertaking that is simultaneously applying to the European Commission for leniency. An undertaking can submit a simplified application when the unlawful agreement affects competition in Poland. In such a situation, a simplified application will be treated in the same way as an abridged application (i.e., it must be completed within a time frame specified by the authority). In the simplified application, the applicant must inform the authority about leniency applications already filed or that it intends to file with the European Commission or competition authorities of other Member States.
Information obtained by the OCCP as a result of a leniency application cannot be disclosed to private litigants, if it pertains to cartel restrictions.
The amendments to the leniency programme do not seem to have been effective. In 2016, the OCCP received one leniency plus application and two 'regular' leniency applications. Given the relatively low rate of cartel detection in Poland so far, the OCCP is considering alternative ways to encourage whistle-blowers, mostly through employees of undertakings, to report on potential competition law infringements. In particular, the OCCP is considering introducing a whistle-blowers' platform for those individuals anonymously providing the OCCP with information about potential anticompetitive arrangements, as described above.
The main sanction that may be imposed for a breach of Article 6 of the ACCP or Article 101 of the TFEU is a fine of up to 10 per cent of the infringing undertaking's worldwide turnover in the preceding year.
In the past, the OCCP has been criticised for a lack of transparency in its method of setting fines, and the Fines Guidelines were issued to increase transparency. The amount of a fine is calculated using a three-step approach:
- First, the OCCP calculates the basic amount based on such factors as the nature of the infringement and the specifics of the relevant market and activity of the undertakings. The basic amount of the fine that may be imposed for hard-core restrictions, such as cartels, varies from 1 to 3 per cent of an undertaking's turnover. Depending on the impact of the infringement on the market and the undertaking's conduct, that amount may be increased or decreased by up to 80 per cent.
- Next, the OCCP takes into account the duration of the infringement. Long-term cartels (i.e., those lasting longer than one year) may result in an increase of the basic amount of up to 200 per cent.
- Finally, the OCCP takes into account any aggravating and mitigating factors that may result in an increase or decrease of the fine calculated in accordance with point (a) of up to 50 per cent.
The maximum amount of the fine cannot exceed 10 per cent of the undertaking's turnover. If the fine ultimately calculated in accordance with the above steps exceeds the maximum amount permitted by law, it will be adjusted to the maximum permitted amount. The OCCP is authorised to impose a fine that is particularly low if, in its view, a smaller fine will fulfil its requirements.
ii Sanctions applying to individuals
A fine of up to 2 million zlotys may be imposed on managing persons for deliberately allowing an undertaking, through their actions or omissions, to conclude a restrictive agreement. Both current and former employees of an undertaking are liable under the same conditions. The liability of a managing person is of secondary importance to the liability of an undertaking, meaning that liability can only be pronounced in the decision imposing a fine on an undertaking. Furthermore, double liability for the same infringement has been excluded where the managing person and the undertaking act simultaneously.
In June 2018, the OCCP announced that it has instigated its very first case against six managers who allegedly were involved in a restrictive agreement concerning the boycotting of certain employee benefit providers by fitness clubs. Employee benefit providers organise schemes that permit the employees to attend, among others, fitness clubs without additional charges.
iii Settlement procedure
Prior to January 2015, there was no procedure for the settlement of cartel cases in Poland. The ACCP currently provides for the option of initiating a settlement procedure (i.e., the procedure for voluntary submission to a fine). The primary objective of a settlement procedure is to speed up the process of adopting a cartel decision and to limit the number of appeals against such decisions to the Court of Competition and Consumer Protection (CCCP). The guidelines on settlements clarify this procedure and increase the transparency of the OCCP's approach in this respect. A settlement procedure may be instigated at the sole discretion of the OCCP, either ex officio or upon receipt of an application from the undertaking being investigated. In the latter case, the OCCP must approve or decline the application within 14 days of its submission. The OCCP may withdraw from a settlement procedure at any stage of the proceedings. For this purpose, the OCCP takes into account the complexity of the case measured by the type of infringement, the number of parties to the proceedings, the scope of the facts and the legal assessments that are questioned by the parties. The OCCP is not released from an obligation to comprehensively gather and analyse evidence. The undertaking participating in the settlement procedure should be provided with the preliminary findings of the OCCP, a legal assessment of the alleged infringement, evidence supporting the authority's conclusions and its estimate of the fine. A successful voluntary submission to a fine results in a 10 per cent reduction of the fine that would have been imposed. Exercising a settlement procedure does not deprive the undertaking of the option of lodging an appeal against the OCCP's decision with the CCCP; however, lodging such an appeal results in the loss of the fine reduction. So far no settlement procedure has been applied.
VI 'DAY ONE' RESPONSE
OCCP officials are authorised to carry out an unannounced inspection and, subject to a decision obtained from the CCCP, a search (dawn raid) for the purpose of finding evidence of antitrust infringements.
During the inspection, the officials are authorised to:
- enter the premises and means of transport of the inspected undertaking;
- request access to and examine files, books, all kinds of documents and data carriers;
- make notes and request copies of originals of books and other records, including information collected on data carriers;
- require on-the-spot oral explanations concerning the subject of the inspection; and
- request persons to render other available evidence.
The CCCP may also issue a non-appealable decision allowing a search of private premises and means of transport by the police if there are justified grounds to suspect that relevant evidence is kept there.
When discussing the scope of officials' powers, the CCCP has indicated that it is unlawful to inspect electronic evidence during a dawn raid outside a company's premises and without the presence of a company representative.10 A company being subject to a dawn raid complained about the behaviour of OCCP officials in making full copies of hard drives of computers belonging to several key employees of the company and taking them to the OCCP's premises, although this was the OCCP's usual practice at that time. The CCCP concluded, however, that the OCCP's officials are allowed to copy only those documents that fall within the subject of the investigation, and the selection of evidence may only be conducted in the premises of the controlled company in the presence of its representative. The above-mentioned ruling introduces an important protection for controlled undertakings.
Obstruction of an inspection or a search (including its initiation) is sanctioned with a financial penalty of up to €50 million. In addition, managers who obstruct the initiation of a search or the conducting of an inspection or a search may be fined up to 50 times the average monthly remuneration in Poland (currently up to approximately 250,000 zlotys).11 The same level of fine may be imposed on other individuals for providing untrue or misleading information or obstructing an inspection or search.
In April 2016, the Supreme Court reversed judgments of the courts of first (CCCP) and second (Appellate Court) instance that annulled a fine imposed by the OCCP on a manufacturer of domestic detergents for the absence of cooperation with the OCCP during a dawn raid.12 The Supreme Court sided with the OCCP and concluded that the removal of an electronic document from its original file and its transfer to a 'bin' file after the beginning of a dawn raid may be regarded as absence of cooperation with the competition authority and, as a result, may be subject to a monetary fine. The Supreme Court stated that to assess whether there had been an absence of cooperation with the OCCP, it is irrelevant whether a given file was permanently deleted or only moved to a different location. The Supreme Court clarified that absence of cooperation with the OCCP occurs when employees of dawn-raided undertakings do not assist the OCCP in the dawn raid (within the scope of the obligations imposed by the ACCP) and that they do not cooperate in fulfilling the objective of a given dawn raid. The case was sent back by the Supreme Court to the CCCP, which, in its judgment of June 2017, confirmed the infringement by the company and upheld the imposed fine in the full amount, concluding that the company's behaviour was intentional and the lack of cooperation was blatant.13 The Appellate Court upheld this judgment, which is now final.14
In 2010 and 2011, the OCCP issued two controversial decisions imposing abnormally high fines on two leading Polish mobile telephony operators, PTC (currently T-Mobile)15 and Polkomtel,16 for obstructing a search. The fines amounted to 123.246 million zlotys17 for PTC and 130.689 million zlotys18 for Polkomtel. However, as a result of appeals by the two operators, the fines were subsequently reduced by the CCCP to 1.232 million zlotys19 and 3.96 million zlotys20 respectively. The threat of potentially significant fines implies the necessity for undertakings to develop internal guidelines that should encompass measures aimed at reducing the risk of being found to have obstructed a search, and ensuring the protection of the undertakings' interests during a dawn raid. In particular, these should cover the following:
- ensuring that the commencement of a dawn raid is not unduly delayed;
- instructing relevant employees that they should collaborate during the investigation (i.e., not prevent or impede the initiation or conduct of the inspection and search, nor fail to realise other obligations imposed on the undertaking pursuant to the ACCP);
- a careful review of the documents authorising the inspection and search, with a particular focus on verifying the scope and purpose of the investigation;
- ensuring that each of the officials is shadowed by an employee or lawyer;
- delegating employees to copy documents requested by the officials, and recording the officials' questions and the answers provided; and
- ensuring that the officials do not review or copy documents that are outside the scope of the investigation or that are protected by legal privilege.
It is advisable that, during the investigation, an undertaking's employees and in-house counsel should be supported by external competition lawyers.
Considering the potential amount of the fines that may be imposed for an infringement of Article 6 of the ACCP or Article 101 of the TFEU, depending on the circumstances and potential discoveries the officials may make during the dawn raid, it may become necessary to consider an application for leniency during or soon after a dawn raid. Given that the priority of leniency applications is to decide on immunity or the level of fine reduction, a decision in this respect should be taken as early as possible.
VII PRIVATE ENFORCEMENT
The Act on Actions for Damages for Infringements of Competition Law (the Act), which transposes Directive 2014/104/EU (the Damages Directive) into Polish law, entered into force in June 2017. The aim of the Act is to facilitate the recovery of loss incurred as the result of collusion, abuse of a dominant position or other competition law infringements.
i Applicability of the Act
The Act is applicable to all damaging actions for breach of competition law regardless of whether they affect trade between Member States (i.e., regardless of whether the breach has a European or national dimension).
ii Statutory definitions
The Act introduced the definitions of such terms as cartel, direct/indirect buyer, leniency programme, settlement submission and overcharge, which previously were not defined under Polish law.
iii Presumption of culpability
Following the Act, it shall be presumed that the infringer is at fault. This provision is seen as the main improvement for harmed entities seeking compensation because the burden of proof has been shifted onto the alleged infringer.
iv Pass-on presumption
The Act introduced a rebuttable presumption of the passing on of an overcharge to an indirect purchaser. Therefore, the purchase of products or services covered by a breach of competition law is presumed to entail the overcharge of a direct purchaser.
v Joint liability
The Act provides a limitation of joint and several liability of infringers being small and medium-sized enterprises. Their liability is limited to direct or indirect suppliers when, during the infringement, their market share is lower than 5 per cent or when the limitless joint liability would result in irreversible consequences for the economic viability of the business and impairment of value thereof.
vi Presumption of harm
Based on the provisions of the Act and contrary to general tort law principles, it is presumed that the competition law infringement causes harm. The scope of this presumption is wider than in the Damages Directive as it applies not only to infringements caused by cartels but to every infringement of competition law, including prohibited vertical agreements and abuse of a dominant position. However, the alleged presumption may be rebutted by the infringer if he or she provides evidence that the violation did not result in any damage.
vii Limitation periods
The Act indicates a limitation period for antitrust damages claims. Under its provisions, the claim has to be pursued within five years of the day the infringement came to an end. It is an extension of the normal three-year limitation period for bringing an action for damages stemming from the Polish Civil Code. However, this limitation period shall be suspended if the OCCP initiates explanatory or antimonopoly proceedings regarding an infringement of competition law constituting a basis for a compensation claim, or such infringement proceedings will be commenced by the European Commission.
viii Court competence
Cases concerning antitrust damages claims fall within the competence of regional (i.e., higher instance) courts regardless of the value of the claim because of the complexity of competition cases.
According to the provisions of the Act, statements and settlement proposals submitted during the course of the leniency procedure are exempt from disclosure if they concern horizontal restrictions.
x Disclosure of evidence
The Act introduces a new institution, namely a request for disclosure of evidence. This tool gives the claimant a chance to request that the CCCP, upon some former commitments, orders the defendant or a third party to disclose any relevant evidence they possess.
The provisions of the Act apply fully only to competition law infringements that took place after 27 June 2017, that is after the Act entered into force. Therefore, the effects of the new regulation cannot be evaluated until a future date. It remains to be seen whether the Act will contribute to an increase in the number of antitrust damages actions and whether the civil courts will be able to render judgments regarding the compensation in competition cases.
VIII CURRENT DEVELOPMENTS
There was a further development of Polish competition law during 2018 in the form of the bill enhancing information sharing between the OCCP and other public authorities in Poland, which is currently being debated. Moreover, the OCCP has continued to implement the pilot programme for whistle-blowers.
With regard to significant decisions by the OCCP, two worth noting in particular were issued in December 2017. They concerned price-fixing and information exchange, and customer allocation.
The OCCP imposed fines amounting to approximately 136 million zlotys on five manufacturers of wood-based products for participation in a horizontal restrictive agreement consisting of price-fixing and the exchange of confidential information about sales volume and intended price increases for fibre boards and particle boards between 2008 and 2011.21 One of the participants to the alleged agreement filed a leniency application that was approved as acceptable and was released from the full fine. It is the first fine imposed by the OCCP for horizontal price-fixing since 2013 and the third highest fine imposed by the OCCP for restrictive practices. The decision is under appeal before the CCCP.
The OCCP imposed a fine amounting to 460,000 zlotys on Istituto Italiano del Marchio di Qualita for price-fixing and customer allocation with Dekra Certification between 2004 and 2009. The practice concerned issuing ISO certificates for management systems and was based on the recommendation system between both undertakings that effectively resulted in excessive prices for customers. Within this mechanism, the undertakings also allocated customers between each other. Both participants to the agreement applied for leniency, and full immunity was granted to Dekra Certification, while Istituto Italiano del Marchio di Qualita received a 50 per cent reduction of its fine.
The OCCP had announced that it would be adopting a tougher stance on resale price maintenance agreements and will increase the level of enforcement, which has proved to be true. For instance, the OCCP announced in October 2018 that it is verifying the cooperation mechanism between Brother, the Japanese manufacturer of printers, and its distributors in Poland. The OCCP is expected to publish guidelines on vertical restraints; however, there is no indication as to when.
The OCCP has remained active in the field of enforcement of bid rigging. Since October 2017,22 the OCCP has issued five decisions concerning this restrictive practice. They concerned public transport23 (total fines amounting to 127,000 zlotys), construction services24 (total fines amounting to 16,000), supply of IT hardware25 (total fines amounting to 57,000 zlotys) and hosting services26 (total fines amounting to 1 million zlotys). In the fifth and most seminal recent case concerning a tender for software provision, the OCCP did not impose a fine. The OCCP considered that the undertakings participating in the public procurement procedure exchanged commercially sensitive information concerning the process. In the OCCP's view, this behaviour constituted a concerted practice that was a restriction by object. However, the OCCP did not impose fines owing to the novelty of the issue in case law and jurisprudence.
Regarding case law, there is one judgment of the Polish Supreme Court and five judgments of the Appellate Court that are worth commenting on.27
In October 2017, the Polish Supreme Court quashed the Appellate Court's judgment28 sustaining the OCCP's decision concerning interchange fees.29 The proceedings will be now the subject of a retrial before the Appellate Court pursuant to the guidelines provided by the Polish Supreme Court. The latter Court took the view that the agreement concerning the level of the interchange fee allegedly made by the payment schemes and Polish banks was not 'by object'. Thus, the Appellate Court must have reviewed the economic context and actual effects of the alleged agreement on the market, in particular by considering the counter-factual scenario. The Appellate Court must consider in its review what benefits the merchants, as the consumers, could have obtained by a flat level of the interchange fee.
In March 2018, the Appellate Court reduced the fines for the participants in the Cement cartel to 69 million zlotys from 411 million zlotys, bringing to an end appellate proceedings that had lasted almost nine years.30 The OCCP issued the largest fine to date in this case in December 2009.31 The courts have reduced the fines for undertakings in several other cases, including Sfinks32 (to 50,000 zlotys in a case concerning resale price maintenance in the restaurant franchising system) and Royal Canin33 (by 20 per cent, to 1.7 million zlotys in a case concerning the restriction of form of sales, including online, of pet food).
There have also been three notable judicial developments in the sphere of procedural rights of undertakings. First, in October 2018, the Polish Supreme Court indicated in its judgment concerning the OCCP's decision on interchange fees that the OCCP should change its practice on restricting access to evidence contained in a case file for parties to antimonopoly proceedings on the basis that these constitute business secrets.34 Under the ACCP, the OCCP may, to the extent necessary, limit the right of access to specific pieces of evidence to protect business secrets of the undertakings – this would be made in the form of a resolution. The Polish Supreme Court found that the OCCP is using this right too often, effectively restricting undertakings' right of defence and right to be heard. This is because they cannot review the full OCCP case file and comment on it while the OCCP may still rely on the pieces of evidence made confidential to the undertaking.
The issue of restricting access to files on the basis of business secrets has also been considered by the Appellate Court, which considered that the resolution concerning the treatment of data provided to the OCCP during proceedings being a business secret and restricting access to them to other parties to the proceedings is subject to a two-tier review by the Polish courts – by the CCCP in the first instance, which judgment is further subject to appeal reviewed by the Appellate Court.
In January 2017, the Appellate Court clarified that, in its decisions, an undertaking's right of defence requires the OCCP to identify all parties to the agreement restricting competition as opposed to referring to them as a general group without further clarification, such as, for instance, distributors. A lack of proper identification violates the right of defence of the other parties to the agreement, considering that such an undertaking is not able to comment on the charges brought by the OCCP.
1 Małgorzata Szwaj is a partner and Wojciech Podlasin is a senior associate at Linklaters C Wiśniewski i Wspólnicy.
2 The Office for Competition and Consumer Protection (OCCP) is responsible for the protection of the health and life of consumers and carries out proceedings concerning general product safety. It also monitors the market surveillance system, the aim of which is to ensure that only safe products, which meet the essential requirements set forth in Polish regulations implementing the New Approach Directives, are available on the market. The OCCP is also responsible for managing the fuel quality monitoring and scrutinising system.
3 Available at https://uokik.gov.pl/aktualnosci.php?news_id=11778 (Polish text only).
4 As per information published by the OCCP as at 28 November 2018.
5 Article 305 of the Polish Penal Code.
6 Decision of 2 October 2017, No. DOK-2/2017.
7 Established on the basis of Council Regulation (EC) No. 1/2003. See also the Commission Notice on cooperation within the Network of Competition Authorities, OJ No. C101, of 27 April 2004.
8 Source: 'Report on the activities of the OCCP – 2017'.
9 See Article 73, Paragraph 2, Points (3) and (4) of the Act on Competition and Consumer Protection (ACCP).
10 Ruling of the Court of Competition and Consumer Protection (CCCP) of 7 March 2017, No. XVII Amz 15/17.
11 Based on data for November 2018.
12 Ruling of the Supreme Court of 21 April 2016, No. III SK 23/15.
13 Ruling of the CCCP of 5 September 2017, No. XVII AmA 54/16.
14 Ruling of the Appellate Court of 4 October 2018, No. VII AGa 1205/18.
15 Decision of 4 November 2010, No. DOK-9/2010.
16 Decision of 24 February 2011, No. DOK-1/2011.
17 Equivalent to €30 million on the day of the decision.
18 Equivalent to €33 million on the day of the decision.
19 Ruling of the CCCP of 20 March 2015, No. XVII AmA 136/11, confirmed by the ruling of the Appellate Court of 1 March 2017, No. VI ACa 1076/15. The reduced fine is equivalent to €300,000 (on the day of the judgment).
20 Ruling of the CCCP of 18 June 2014, No. XVII AmA 145/11. The ruling was quashed by the Appellate Court, which returned the case to the Court for reassessment in the ruling of the Appellate Court of 20 October 2015, No. VI ACa 1478/14. The reduced fine is equivalent to €1 million (on the day of the judgment).
21 Decision of 28 December 2017, No. DOK-3/2017.
22 As at 31 October 2018.
23 Decision of 11 October 2017, RWR – 6/2017.
24 Decision of 17 October 2017, RGD – 5/2017.
25 Decision of 28 December 2017, No. RŁO – 8/2017.
26 Decision of 30 May 2018, No. RKR – 3/2018.
27 As per information published by the OCCP as of ۳۰ November ۲۰۱۷.
28 Ruling of the Polish Supreme Court of ۲۵ October ۲۰۱۷, No. III SK ۳۸/۱۶.
29 Decision of 29 December 2006, No. DAR-15/2006.
30 Ruling of 27 March 2018, No. VI ACa 1117/14.
31 Decision of 8 December 2009, No. DOK-7/2009.
32 Ruling of 10 January 2018, No. VII AGA 828/18.
33 Ruling of 30 August 2018, No. VII ACa 877/17.
34 Ruling of the Polish Supreme Court of 25 October 2017, No. III SK 38/16.