Poland: The Competition Watchdog Follows A New Path

This article was originally published in the schoenherr roadmap`10 - if you would like to receive a complimentary copy of this publication, please visit: http://www.schoenherr.eu/roadmap.

For the last year and a half the Office for Competition and Consumer Protection (OCCP) has been directed by a new president. Great hopes were connected with her nomination, and it seems these expectations were not in vain.

Małgorzata Krasnodębska-Tomkiel was appointed president of the OCCP in June 2008. She previously held the position of vice-president. She also has a PhD degree in law. Therefore, great hopes were connected with her nomination as she was seen as a specialist in anti-trust law and not a mere political nominee. These hopes have so far been fulfilled as the OCCP has started to develop a new image both in terms of PR and as a legislator and public enforcer of competition rules.

PR

This year the OCCP has organised an unprecedented number of national and international conferences, meetings and seminars, both for consumers and undertakings. The OCCP also hosted an array of distinguished guests, including: Mr Lowe from the European Commission; Mr Lasserre, President of the French Competition Authority; Mr Heitzer, President of the German Federal Cartel Office; Mr Thanner, Director General of the Austrian Federal Competition Authority; and many other senior figures and representatives from competition offices in the EU, US and Canada.

During these events the most recent domestic and EU cases were discussed, including Microsoft, Intel and Telefonica. Several issues were raised during these meetings, such as concerns related to abuse of a dominant position on the market of new technologies, consumer credits and sanctions in anti-trust proceedings, mergers and acquisitions in the current crisis and issues in merger enforcement laws. The OCCP has also started trainings for local municipality representatives to promote competition law on the local markets.

Another step to raise public awareness of issues related to competition law was downloadable web publications of the OCCP. These have dealt, among others, with price fixing and bidding agreements, reports on actions of undertakings on various markets and a guideline about competition law for children. In 2008 the OCCP launched an ongoing series of campaigns in the media to encourage undertakings to take part in leniency programmes and to inform the public about the institution of the consumer ombudsman. Information, including recent competition decisions, is also regularly published on the OCCP website, which certainly makes its activities as law enforcer more transparent.

Secondary Legislation

In 2009 a new leniency regulation replaced the old one from 2007, which shows the OCCP's efforts to improve existing legislation. The new leniency regulation stipulates the entire leniency procedure in more detail. Additionally, guidelines on setting fines for anti-competitive practices have been published. This serves as a yard stick for potential competition law offenders and helps the OCCP develop a continuous policy of setting fines. Although they have no legal force (except to bind the OCCP) and have been criticised as being too vague, the OCCP uses them regularly for calculating fines. Particular points of criticism are that the wording on aggravating and mitigating circumstances is too vague and that the guidelines do not clearly state whether the sales from an infringement shall be taken into account when calculating the basic amount of the fine (which is then adjusted on the basis of aggravating and mitigating circumstances, duration of the infringement, etc.).

The Law Enforcer

In the first half of 2009 the President of the OCCP issued 47 decisions allowing concentrations of undertakings, compared with around 80 such decisions in the same period in 2008. The decrease in the number of issued decisions can be explained mainly by the fact that in 2007 the notification turnover thresholds were increased.

It seems that this year the most important concentration decisions were for the press market (Axel Springer Poland and Infor Biznes), the chemical building materials market (Atlas, which is a leader on this market, acquired Izolmat, which specialises in the production of roof-layers) and dairy producers (Mlekovita and Kurpie).

The OCCP fines mainly the private sector (e.g. a fine for ENION of ca. EUR 2 mln) but also does not hesitate to fine governmental agencies. The Polish National Health Fund, which awards public contracts for all medical services, was fined around EUR 275,000 for abusing its market position. The OCCP also controlled enterprises belonging to local municipalities, which resulted in the issuance of 41 decisions in 2008 confirming that they were abusing their dominant position on the local markets. In addition to this, PKP Cargo (the main player in the Polish rail cargo transport industry) was fined around EUR 14.3 mln for discriminating against some of its contracting parties. The PKP group is (together with the Polish telecommunication giant Telekomunikacja Polska S.A.) one of the biggest fine payers due to competition infringements. Most of the recent decisions of the OCCP have been upheld by the courts, meaning various undertakings have paid to the state treasury around EUR 7.7 mln in fines for competition infringements through May 2009, compared with EUR 8.3 mln in the whole of 2008.

The OCCP's endeavours are a good example of a public authority which is trying to become more transparent. Still, the most important task for the OCCP is to concentrate on its core activities, namely issuing administrative decisions within a reasonable period and providing incentives for the improvement of the existing legal framework. These are the two areas on which the OCCP should focus in the future in order to continue the good work it has started.

The Polish competition watchdog is continuing its efforts towards becoming a modern and sophisticated competition authority. The two issues that still require attention are the current length of proceedings and a more proactive approach to the development of competition rules.

This article was originally published in the schoenherr roadmap`10 - if you would like to receive a complimentary copy of this publication, please visit: http://www.schoenherr.eu/roadmap.

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