The Cartels and Leniency Review: Poland
Enforcement policies and guidance
i Key policies and guidance
In recent years, the president of the Office for Competition and Consumer Protection (OCCP) (the Polish competition authority), has widely expressed its commitment to active pursuit of cartels. The announcements made in 2016 stated that the OCCP will move to more decisive action in terms of enforcement strategy, which indicates the imposition of higher financial penalties for competition law infringements. This approach has been visible generally among the OCCP's enforcement actions. However, this has not yet brought significant changes to the OCCP's practice as regards fining anticompetitive agreements. The trend to increase fines is, however, visible as the total amount of fines imposed in 2018 was 1.1 million zlotys, in 2019 – 5.2 million zlotys and in 2020 – 151 million zlotys.2
At the same time, the OCCP continues its work to enhance cooperation with whistle-blowers. In December 2019, it announced the launch of a special online platform for whistle-blowers. Since April 2017, the PCA has received 5,481 reports.3
The OCCP continued its increased level of scrutiny of the behaviour of undertakings. In the whole of 2018, based on publicly available sources, it conducted nine unannounced inspections on undertakings' premises whereas in the first 10 months of 2019 there were five inspections.4 Although the covid-19 epidemic situation had an impact on the number of inspections conducted, the OCCP has already returned to conducting them.
2020 signified personnel changes at the key posts for cartel enforcement. Wojciech Dorabialski stepped down from the position of the director in the Department of Competition Protection, which deals with antitrust cases. Tomasz Bagdziński, a former private practitioner with an academic background, took the post in May 2020. In December 2019, the then president of the OCCP, Marek Niechciał, resigned from the organisation. The competition for a new president was won by Tomasz Chróstny, a former official in the Chancellery of the Prime Minister and in the Ministry of Entrepreneurship and Technology, with an economic academic background. Mr Chróstny was appointed to the office in January 2020; before that he served as a vice president of the OCCP for five months.
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-governmental 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 to legislative changes, in September 2019 an amendment to the ACCP enhancing the information-sharing mechanism between the OCCP and other public authorities entered into force. As a result, the OCCP now has the right to access fiscal secrets. The amendment also extends the scope of the OCCP's access to banking secrets and provides for more extensive cooperation with the Polish Financial Supervision Authority, including wider information sharing.
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 Organisation for Economic Co-operation and Development, 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) Nos. 1/2003 and 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 (EC) Nos. 1/2003 and 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.
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.
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. As of December 2019 the OCCP has been running dedicated platform for whistle-blowers, via which, according to the OCCP, fully anonymous and secure informing about restrictive practice is possible. Since introduction of leniency there have been 91 leniency applications in total.10
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 the 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 not 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 items (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 hardcore 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 item (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 July 2020 the OCCP issued guidelines with methodology on imposing fines for individuals, clarifying how the rules will be applied in individual cases.
In June 2018, the OCCP announced that it had 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, among other things, permit employees to attend fitness clubs without additional charges).
During a press conference in May 2019, the OCCP announced that there were 19 pending proceedings in which charges had also been made against individuals.
In December 2020, the OCCP issued the first ever fine for an individual, namely the board member of Veolia Energia for an anticompetitive agreement with PGNiG Termika concerning the heat market in Warsaw. The fine amounted to 200,000 zlotys.
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.
As of December 2020 the settlement procedure was applied in two cases conducted by the OCCP. These were Brother regarding RPM arrangements with distributors on the distribution of printers, and Yamaha regarding RPM arrangements with online distributors of Yamaha's music equipment.
'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. In December 2019, the OCCP issued guidelines with clarification on how it will apply its powers during unannounced inspections.
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 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.
In January 2019, the Polish Constitutional Tribunal found that the absence of the right to appeal against court decisions permitting dawn raids was unconstitutional.11 As a result, it is now possible to appeal a decision to conduct a dawn raid to the Appellate Court.
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.12 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).13 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.14 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 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.15 The Appellate Court upheld this judgment, which is now final.16
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)17 and Polkomtel,18 for obstructing a search. The fines amounted to 123.246 million zlotys19 for PTC and 130.689 million zlotys20 for Polkomtel. However, as a result of appeals by the two operators, the fines were subsequently reduced by the CCCP to 1.232 million zlotys21 and 3.96 million zlotys,22 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.
The Act on Actions for Damages for Infringements of Competition Law (the Private Enforcement 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 Private Enforcement Act
The Private Enforcement 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 Private Enforcement Act introduced the definitions of such terms as cartel, direct and indirect buyer, leniency programme, settlement submission and overcharge, which previously were not defined under Polish law.
iii Presumption of culpability
Following the Private Enforcement 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 Private Enforcement 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 Private Enforcement 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 Private Enforcement 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 Private Enforcement 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 Private Enforcement 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 Private Enforcement 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 Private Enforcement 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 in the longer term and whether the civil courts will be able to render judgments regarding the compensation in competition cases.
The initial phase of the Private Enforcement Acts' operation has not resulted in a sharp increase of competition damages claims before Polish civil courts; however a tendency of an increased number of these claims arising has stated to become visible.
There was no legislative development of Polish competition law concerning cartels enforcement since September 2019, when the bill enhancing information sharing between the OCCP and other public authorities in Poland entered into force.
As noted, in 2020 the OCCP issued two new sets of guidelines, namely guidelines with methodology on imposing fines for individuals and clarifying how the rules will be applied in individual cases and guidelines clarifying how the OCCP will apply its powers during the unannounced inspections. The former generally replicated the model of fining of undertakings for antitrust infringements, with a set of rules on how the basic fine and subsequently mitigating and aggravating factors will be applied by the OCCP. The latter can be regarded as a document codifying the current practice of the OCCP as to its dawn raid practice.
With regard to significant decisions by the OCCP, there was a number of noteworthy ones issued in 2020. They concerned, in particular, bid rigging, market sharing and price-fixing.
The OCCP has remained active in bid rigging enforcement. In 2020, the authority took a closer look at consortia. According to the OCCP, acting as a consortium (i.e., in the form provided for by the public procurement law, when there is no objective justification for its establishment) may in fact be considered as bid rigging.23 Of the decisions issued in that regard, special attention should be paid to the one concerning six producers of wooden railway sleepers24 by which the OCCP imposed on them significant fines amounting in aggregate to over 13 million zlotys. The OCCP also announced it was taking actions in relation to the consortia in the waste market.25
The OCCP in 2020 issued two noteworthy decisions concerning market sharing. Firstly, the OCCP fined two Veolia group companies distributing heat in Warsaw 120 million zlotys for an anticompetitive arrangement with PGNiG Termika, a heat producer that before the arrangement entered the market for heat distribution in competition with Veolia. According to the OCCP, the undertakings concerned agreed on dividing the market as Veolia resigned from competing with PGNiG Termika in the market for heat production, whereas PGNiG Termika stopped heat distribution. In addition, the parties agreed on structure of tariffs (prices) for end customers. PGNiG Termika escaped a fine due to its leniency application, without which it would have incurred a fine of almost half a billion zlotys. For the first time in the history of the OCCP's cartel enforcement, a manager of Veolia Energia was found to be 'directly responsible' for the infringement and fined 200,000 zlotys. The PGNiG Termika leniency application covered the infringement by its former president who escaped the fine. The decision most likely will be appealed to the CCCP.26
Secondly, the OCCP fined Ekoplon sp.z o.o. and Polmass SA 17 million zlotys for dividing their target territories and customer groups among themselves. The undertakings are active in the field of providing food supplements for cattle. However, the decision is also not final, as it was appealed to the CCCP.27
A noteworthy decision was also issued in the Marketing Communication Association (SAR) case.28 SAR obligated marketing agencies (1) not to take part in tenders in which rules did not provide for a compensation for the creative effort of the tender participants (rejection fee); and (2) to provide information on bids in which each agency intended to participate. This allowed SAR to secure that no more than five agencies participated in an individual bid on an ongoing basis, and none participated in those without a rejection fee. In the course of the proceedings, SAR withdrew from its misconduct and made an obligation to remove existing effects of its infringement. The OCCP imposed on SAR commitments pursuant to which SAR was obliged to amend its ethics code and official documents so as to emphasise that the decision to participate in a bid is always an individual and autonomous one for a participating agency. Moreover, SAR was obliged not to make available to its members information on bids unless it was publicly available.
The OCCP continues its tougher stance on resale price maintenance (RPM) agreements and would increase the level of enforcement in this regard, which has proved to be true as a number of dawn raids conducted by the OCCP in 2018 and 2019 related to suspicion of RPM. Late 2019 and 2020 already brought RPM decisions with fines. At the very end of the 2019, a decision was issued in the above-mentioned Brother case.29 In this decision, apart from leniency, the procedure of voluntary submission to a financial penalty was used for the first time since its introduction in 2015. As a result, the fine was reduced by 30 per cent because of the leniency application and by a further 10 per cent as a part of the settlement discussions. In the similar Yamaha case of 2020, which concerned producer of music equipment Yamaha, the fine was reduced even more substantially, namely by 50 per cent for the leniency application and a further 10 per cent as a part of the settlement discussions.30
After the outbreak of the covid-19 epidemic, the OCCP was active in policing anticompetitive arrangements that may have impaired combating the epidemic. For instance, in November 2020 the OCCP announced that explanatory proceedings were issued concerning the supply of oxygen to hospitals.
Regarding case law, there is one judgment of the Polish Supreme Court that is worth commenting on.31
In October 2019, the Polish Supreme Court upheld the Appellate Court's judgment32 that quashed the OCCP's 2006 decision concerning an alleged anticompetitive arrangement between four Polish telecoms companies and Info-TV-FM, an entity that won a public tender to provide mobile TV services, as well as involving the exchange of sensitive commercial information. The Polish Supreme Court noted that each of the telecoms companies decided not to cooperate with Info-TV-FM individually and that there was no collusion between them.
The issue of restricting access to files on the basis of business secrets has also been considered by the Appellate Court, which stated that the resolution concerning the treatment of data provided to the OCCP during proceedings as a business secret and restricting access to this to other parties to the proceedings is subject to a two-tier review by the Polish courts – by the CCCP in the first instance, whose judgment is further subject to appeal reviewed by the Appellate Court.
In January 2019, the Polish Constitutional Tribunal found that the absence of the right to appeal against court decisions permitting dawn raids was unconstitutional.33 As a result, it is now possible to appeal a decision to conduct a dawn raid to the Appellate Court.
In January 2020, the Polish Supreme Court dismissed the appeal in cassation in the case concerning a fine in the amount of 10.5 million zloty imposed by the OCCP on the leader in the Polish natural gas market, PGNiG, for failure to comply with the decision of 2013 obliging the plaintiff to introduce modifications to gas contracts favourable for customers.34 In the aforementioned case, PGNiG argued that as the OCCP decision was unclear and unprecise to the extent that acting in compliance with it was not possible. The Polish Supreme Court rejected the undertaking's argumentation, stating that should PGNiG have serious doubts as to the understanding of its obligation, it should have appealed against the decision to the Court of Competition and Consumer Protection, which was the only procedure to refute the presumption of validity of the decision of the OCCP. Although the contested decision of the OCCP concerned the abuse of a dominant position, the ruling of the Supreme Court is applicable to commitment decisions as such.
1 Małgorzata Szwaj is a partner and Wojciech Podlasin is a managing associate at Linklaters Warsaw.
2 As of 14 December 2020.
3 As per information published by the OCCP as at 9 December 2020.
4 There is no official data regarding number of inspections since then.
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 – 2018'.
9 See Article 73, Paragraph 2, Points (3) and (4) of the ACCP.
10 As per information published by the OCCP as at 9 December 2020.
11 Ruling of the Constitutional Tribunal of 16 January 2019, No. P 19/17.
12 Ruling of the CCCP of 7 March 2017, No. XVII Amz 15/17.
13 Based on data for November 2019.
14 Ruling of the Supreme Court of 21 April 2016, No. III SK 23/15.
15 Ruling of the CCCP of 5 September 2017, No. XVII AmA 54/16.
16 Ruling of the Appellate Court of 4 October 2018, No. VII AGa 1205/18.
17 Decision of 4 November 2010, No. DOK-9/2010.
18 Decision of 24 February 2011, No. DOK-1/2011.
19 Equivalent to €30 million on the day of the decision.
20 Equivalent to €33 million on the day of the decision.
21 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 and by the ruling of the Supreme Court of 10 September 2019, No. I NSK 46/18. The reduced fine is equivalent to €300,000 (on the day of the judgment).
22 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).
23 Decision of 18 December 2019, DOK-2/2019.
24 Decision of 14 September 2020, DOK-2/2020.
25 As per information published by the OCCP on 30 April 2020.
26 Press release published by Veolia on 7 December 2020.
27 Decision of 8 May 2020, RBG-7/2020.
28 Decision of 28 September 2020, DOK-3/2020.
29 Decision of 30 December 2020, RKR-10/2019.
30 As per information published by the OCCP on 5 October 2020.
31 As per information published by the OCCP as of 30 November 2019.
32 Ruling of the Polish Supreme Court of 25 October 2017, No. III SK 38/16.
33 Ruling of the Constitutional Tribunal of 16 January 2019, No. P 19/17.
34 Ruling of the Polish Supreme Court of 22 January 2020, No. I NSK 105/18.