25 inspected undertakings, 115 standard forms examined and 13 pending proceedings – this reveals the latest analysis of the President of UOKiK concerning individual retirement accounts

Under the law all employed persons must pay retirement premiums in I pillar (pl. ZUS, ie. social insurance institution) and II pillar (open pension funds). Additionally, everyone may save funds under III pillar, which is a totally voluntary choice. There is a wide selection of products offered to consumers concerned about their future pensions and one of them is the individual retirement account (pl. IKE) – an agreement concluded by a consumer with one of financial institutions. The party to such agreement, depending on the selected form of saving, can be the following: brokerage houses, social insurance institutions, banks or investment funds.

The latest report of the President of UOKiK concerns the inspection preformed in 2011 when 115 standard forms applied by 25 financial institutions offering individual retirement account were examined. It has been the first such inspection carried out by the Office. The undertakings were selected both according to the highest value of accumulated funds and at random. The inspection covered the following:

• seven banks: Bank Gospodarki Żywnościowej, Bank Polskiej Spółdzielczości, Bank Millennium, BNP Paribas, BRE Bank, Krakowski Bank Spółdzielczy and Powszechna Kasa Oszczędności Bank Polski,
• three entities running the brokerage activity: BDM, Bank Ochrony Środowiska and BZ WBK,
• ten investment funds: Amplico, BPH, BZ WBK AIB, Fortis Private Investments (currently BNP Paribas Polska), ING, Legg Mason, Millennium, Pioneer Pekao, PZU and Skarbiec,
• five insurance companies: TU Allianz Życie Polska, ING Towarzystwo Ubezpieczeń na Życie, NORDEA Polska Towarzystwo Ubezpieczeń na Życie, PZU Życie and Towarzystwo Ubezpieczeń na Życie Spółdzielczych Kas Oszczędnościowo–Kredytowych.

The President of the Office questioned the practice applied by 16 financial institutions. The charges of UOKiK mainly concern the application of clauses infringing economic consumer interests and regard the following:

• no option for disposing funds – the Office was concerned about limiting the right of persons saving for their pension to decide about the already accumulated capital.

Among the contested clauses is restricting in agreements the possibility to sell assets accumulated by the consumer at their discretion in the case of withdrawal of funds in instalments. According to the Office, a client saving the funds for their pension enjoys the right to decide which financial instruments they wish to invest in, and so, when withdrawing funds in instalments, a cosumer should have influence on the sequence of their sale. For this reason it is contrary to law to limit cilents their right to dispose of accumulated funds.

Furthermore, the President of the Office contested the fact that consumers were deprived of their right to select a subfund where they could allocate their sources in the case of closing one of these funds.

• no indexed insurance amount – the President of the Office was concerned about the clause stating that rising inflation causes the proportionate increase in the insurance premium whereas the insurance amount remains unchanged. Following this, a consumer pays more and does not receive higher amounts in case of insurance event. According to the Office, the practice is contrary to law as all paid premiums should result in the change of policy.
• too stringent requirements for sources withdrawal – the clauses hindering consumers withdrawal of their funds raised doubts of the President of UOKiK. For example, it turned out that undertakings made withdrawal of funds allocated on individual retirement account after the death of its owner dependent on fulfilling additional conditions. It is worth noting that these requirements do not have any legal basis, eg. authorization of the death certificate in a Polish diplomacy institution.
• no liability for monetary operations – under the law, running a bank account agreement must specify inter alia the undertaking’s liability for irregularities in monetary settlements and rates of compensation for losses suffered for this reason. The President of the Office stated that not including in agreements information on the rates of compensation in the case when the undertaking fails to perform the contract accordingly, definitely violates the law.

The examination of individual retirement accounts provided the basis for instituting 13 proceedings by the President of the Office concerning the violation of collective consumer interests. There will be 8 actions brought to the court for regarding in total 17 clauses as unlawful. Particulars concerning all the inspected entities and irregularities identified were included in the report and the appendix.

According to the data of Komisja Nadzoru Finansowego (the Polish Financial Supervision Authority), in the period from 2004 till the first half of 2011, only one in twenty professionally active Poles decided to join the individual retirement account. There were opened 799 thousand accounts with PLN 2.9 billion accumulated funds. Unfortunately, still very few consumers decide to save money this way. In case of doubts concerning the performance of individual retirement account agreement, please follow the guidebook by the Office.

Additional information for the media:
Małgorzata Cieloch, Spokesperson for UOKiK
Department of International Relations and  Communication
Pl. Powstańców Warszawy 1, 00-950 Warszawa
Phone: +48 22 827 28 92, 55 60 314, 55 60 430
fax +48 22 826 11 86
E-mail: malgorzata.cieloch@uokik.gov.pl

The pace of considering concentration cases by UOKiK is greatly dependent on the information provided by transaction participants. Therefore providing untrue data in a transaction notification may result in a financial sanction. It happened in the case of UPC Polska, which failed to submit a document vital in the proceedings regarding acquiring Aster

An undertaking submitting to UOKiK the intention of concentration is obliged to provide true and complete information required by law. If the already filed notificaton does not fulfil formal requirements or shows other failures, the President of the Office may inter alia call the entity to complete the document or provide additional explanations. Furthermore, whenever untrue information is provided in the notification of intended concentration, a fine can be imposed in the equivalent of up to EUR 50 mln.

In December 2010 UPC applied to the Office for the consent to acquire Aster. The President of UOKiK addressed the undertaking to complete the notification inter alia with providing information if the company and the to-be-acquired entity possessed any reports, analyses or marketing enquiry concerning the access market to pay TV in Poland. During the proceedings it turned out that UPC concealed the market analysis containing significant information for the examined transaction.

The document not revealed by the company confirmed inter alia the opinion of UOKiK stating that the concentration would have a significant impact on local markets of particular cities. This was contrary to the stance of UPC Polska, which claimed during the pending proceedings that the market of pay TV is at nationwide level. It is worth emphasizing here that the Office’s waiting time for submitting the report greatly influenced the length of proceedings concerning the control of concentration.

UPC Polska was imposed a fine amounting to PLN 775 thousand (the equivalent of EUR 175 466.40) for providing false information regarding possessing key documents for the pending proceedings. The decision is not final and can be appealed against to the court.

Financial sanctions for providing false information in the notification of concentration are not a common practice. The decision concerning UPC has been the first such fine issued since 2008.

Additional information for the media:
Małgorzata Cieloch, Spokesperson for UOKiK
Department of International Relations and  Communication
Pl. Powstańców Warszawy 1, 00-950 Warszawa
Tel. +48 22 827 28 92, 55 60 314, 55 60 430
fax +48 22 826 11 86
E-mail: malgorzata.cieloch@uokik.gov.pl

Abuse of a dominant position by RWE Polska and Energa-Operator – these are the latest decisions of the President of UOKiK concerning the electricity market. Unlawful practices could have impeded the choice of electricity supplier by end-users

The process of liberalization of the Polish energy sector has been taking place for many years. One of its aims is to lead to free competition of entities involved in the sale of electricity. This purpose is to be served by the introduction of free choice of electricity supplier by end-users. This opportunity has been enjoyed by undertakings since 2004, while consumers were allowed to do so in 2007. Unfortunately, the experience of the Office shows that there are cases of hindering the operation or blocking market entry to operators beyond the capital groups of electricity producers or distributors.

Recently, the President of UOKiK issued a decision regarding RWE Polska. Till 2007 the company enjoyed the position of a monopolist on the electricity distribution market in Warszawa and the surrounding municipalities. This implies that retailers operating in this region were obliged to use its services in order to provide the final recipient with electricity. In addition, they competed with RWE Polska, which also deals with the sale of energy.

The proceedings carried out by UOKiK following the complaint filed by Polenergia showed that using its market power RWE Polska, between 2004 and 2007, imposed unfavourable contract terms upon its contractors in the distribution market, being also its competitors in the electricity trading market. The company imposed upon them obligations, which itself it did not have to perform as a seller of electricity. The monopolistic practices increased the operating costs of the retailers, exposing them to financial losses, thus making it difficult for them to stay in the market.

RWE Polska has been imposed a fine amounting to PLN 6.3 million (PLN 6 362 876) for the abuse of its dominant market position.

Another decision concerned Energa-Operator. Proceedings against the undertaking were instituted in February 2011, following a complaint by the municipality of Bytów (Pomorskie Voivodeship). The findings of the Office show that for almost a year, until the end of 2010, Energa-Operator made it difficult for the municipality to choose retailer delivering electricity to lighting points in town squares, streets and public roads. Taking advantage of the fact that it owns most of the lighting infrastructure in the municipality, the company said that it would not consent to supply of electricity by an entity beyond Energa capital group. However, according to law, lighting of public places and roads is the responsibility of municipality, which covers the costs of the electricity, and hence it should have the right to freely choose an electricity supplier. For the practices restricting competition Energa-Operator was imposed a fine amounting to PLN 260 thousand (PLN 260 415).

The decisions described above are not final. The undertakings have lodged appeals to the court.

Additional information for the media:
Małgorzata Cieloch, Spokesperson for UOKiK
Department of International Relations and  Communication
Pl. Powstańców Warszawy 1, 00-950 Warszawa
Phone: +48 22 827 28 92, 55 60 314, 55 60 430
fax +48 22 826 11 86
E-mail: malgorzata.cieloch@uokik.gov.pl

Demanding payment for products never ordered by consumers, failure to provide information regarding the intention to conclude an agreement, suggesting that consumers might have won a prize – are just few of the ten practices of Reader’s Digest Przegląd, questioned by the President of the Office. The undertaking was imposed a fine over PLN 4.3 mln

Reader’s Digest Przegląd is a publishing house selling products such as books, diet supplements, publications about music on the Internet or by mail order. The company also organizes contest known as Wielka  Loteria Reader’s Digest (Reader's Digest Great Sweepstakes). When advertising its products and sweepstakes, it sends letters to consumers (via regular mail or e-mail) containing, among others information about opportunities to participate in contests with prizes - primarily in the Reader's Digest Great Sweepstakes, its publishing offer, sweepstakes documents, postage-paid envelopes with inscriptions YES/NO, questionnaires on how to collect the prizes. To participate in the Reader's Digest Great Sweepstakes, one must return the documents within the prescribed period of time. Returning correctly completed sweepstakes documents also implies placing an order for the offered goods (e.g. books).

Doubts of the President of UOKiK were arisen by the letters sent by the company, which were the subject of consumer complaints. The information obtained indicated that consumers received from Reader's Digest Przegląd demands for payments for products that they never ordered. The President of UOKiK initiated proceedings against the undertaking in June 2011.

During the proceedings, the Office found that the Reader's Digest Przegląd sought payment for the delivered products, which consumers never ordered, at the same time threatening them with legal action. It is illegal for traders to demand payment for products not ordered by consumers. Such actions are aggressive market practices.

Moreover, the President of UOKiK questioned nine other practices of Reader's Digest Przegląd. One of them is the failure to inform consumers in a clear and understandable way about the intention to conclude an agreement. The company sends letters containing its publication offer and sweepstakes announcements, offering special privileges, e.g.: PLEASE ACCEPT A CHANCE TO WIN! Simply return the document before the deadline! Imagine how many dreams can come true for PLN 555 000, or: Send in the enclosed envelope a YES answer, and you’ll be able to discover our book. At the same time the amount of information about the sweepstakes organised by the company is disproportionately greater as compared to information on the offered sales contract. According to the findings of UOKiK, the letters do not communicate directly about the possibility of purchasing books, however they mention they can be obtained as one of the granted privileges granted returning completed sweepstakes documents. As it turned out, this implied placing of an order for the company’s publishing offer.

Moreover, the documents are prepared in such manner as to raise consumer confidence and encourage them to order the books: they give the impression of official correspondence, include business cards and pictures of staff, guidelines as to what to do if the consumer wins the prize. In addition, they are so worded that a consumer who receives them may feel honoured and expect to win (e.g. while your neighbours look in vain inside their letter-boxes, looking for these sweepstakes documents, you are in a good situation, that you are on the way to the 21^st Great Sweepstakes Final).

In connection with these practices, many consumers were misled. They could have responded to the company’s offer, thinking that they will take part only in the prize draw without having to place an order or receiving a certain product – i.e. one of the honours conferred upon them.

The President of the Office found that consumers did not receive reliable information, and ordered to cease the questioned practices. For the violation of collective consumer interests, the President imposed on the Reader's Digest a fine of PLN 4 395 489. In addition, the company must publish the decision on its website and a specified announcement in nationwide daily newspaper. The decision is not final, because the undertaking appealed to the court.

Consumers may obtain free of charge assistance in seeking their rights from consumer ombudsmen, or by calling toll-free number 800 007 707, Monday to Friday from 9 AM to 5 PM. Pursuing claims can also be facilitated by the Act on combating unfair commercial practices, which gives consumers the opportunity to bring an action in their individual disputes with undertakings. In the course of such proceedings, the court will verify whether the questioned market practice is unfair. In this case, it is the undertaking that must prove to the court that its market practice did not mislead the consumers. Answers to frequently asked questions can be found at UOKiK’s website.

Additional information for the media:
Małgorzata Cieloch, Spokesperson for UOKiK
Department of International Relations and  Communication
Pl. Powstańców Warszawy 1, 00-950 Warszawa
Phone: +48 22 827 28 92, 55 60 314, 55 60 430
fax +48 22 826 11 86
E-mail: malgorzata.cieloch@uokik.gov.pl

HB Reavis Group and Polskie Koleje Państwowe (PKP) will be able to build a new railway station Warszawa Zachodnia. The President of UOKiK consented to create a joint undertaking

The Dutch company HB Reavis Group belongs to the HB capital group, which is involved inter alia in real estate development, construction, and management of real estate properties. PKP in Warszawa is the leader of the state-owned capital group. As a result of concentration, HB Reavis Group and PKP will jointly control the company West Station Investment, which is set to build the new Warszawa Zachodnia Railway station and commercial development of the adjacent areas.

Under law a transaction is subject to notification to the antitrust authority, if it involves undertakings whose total turnover in the preceding year exceeded EUR 1 billion worldwide and EUR 50 million in Poland

Having conducted antitrust proceedings, the President of the Office decided that the concentration will not result in a significant restriction of competition.

Under the law, a transaction is subject to notification to the antitrust authority, if it involves undertakings whose total turnover in the preceding year exceeded EUR 1 billion globally or EUR 50 million in Poland.

Please also note that the Office’s website includes information about all antitrust proceedings conducted by UOKiK in cases involving concentration.

Decisions regarding consent to concentration lapse if the transaction does not take place within 2 years of their release. The Office’s website includes information about all antitrust proceedings conducted by UOKiK in cases involving concentration. More information about the principles for concentration of undertakings can be found in the specially prepared elaboration.

Additional information for the media:
Małgorzata Cieloch, Spokesperson for UOKiK
Department of International Relations and  Communication
Pl. Powstańców Warszawy 1, 00-950 Warszawa
Phone: +48 22 827 28 92, 55 60 314, 55 60 430
fax +48 22 826 11 86
E-mail: malgorzata.cieloch@uokik.gov.pl

JBB, the producer of cold meats, along with its distributors: Tassi, Jakomex and Makton were fixing resale prices of their products. The decision was issued thanks to information provided by one of participants to the collusion. Additionally, distributors of musical instruments and food preparation appliances concluded unlawful agreements

Price collusions of undertakings belong to the most serious infringements of competition.
A participation in competition-restricting agreements entails financial penalty of up to 10 percent of udertaking’s revenue in the year preceding the issuance of such decision. Harsh punishment can be avoided thanks to the introduction of the leniency programme.

Price collusions of undertakings belong to the most serious infringements of competition. They can be concluded not only between competitors but also undertakings operating at different levels of economic turnover (e.g. a producer and distributors). A participation in competition-restricting agreements entails financial penalty of up to 10 percent of udertaking’s revenue in the year preceding the issuance of such decision. Harsh punishment can be avoided thanks to the introduction of the leniency programme. An entity which undertakes cooperation with UOKiK, e.g. presents evidence for the existence of a cartel, was not the cartel initiator and ceased the unlawful practice, may even expect full immunity from fine.

One of the latest decisions issued by the President of UOKiK concerns the agreement concluded between  JBB (cold meats and  meat products producer) and the distributors of its products - Bruno Tassi, Jakomex and Makton. The collusion lasted from January 2007 to February 2009. According to UOKiK, at the meeting of company representatives they signed  a note stating that distributors are obliged to use fixed resale prices for JBB meat products. The cold meats producer was the agreement’s initiator.

UOKiK obtained the information concerning the collusion during the insection with search at the undertakings’ premises as well as from participant of the agreement – Makton company, which intended to apply for the leniency. During the proceedings the undertaking provided the authority inter alia with e-mails indicating the collusion, a list of applied sale and purchase prices as well as margin for JBB products. Moreover, the undertaking informed the Office about the nature and mechanisms of the agreement’s operation. As the produced evidence essentially contributed to the issuance of the decision and the undertaking was not the agreement’s initiator, undertook cooperation during the proceedings and ceased participation in the collusion, the President of UOKiK resigned from imposing any financial penalty on Makton. The remaining participants to the agreement were imposed a fine in total amounting to PLN 4 871 312, respectively: JBB (PLN 2 762 026), Bruno-Tassi (PLN 1 799 399) and Jakomex (PLN 309 887).

Roland Polska also applied the practice consisting in fixing prices with its business partners. The company is a distributor of musical instruments produced by a Japanese company Roland Corporation under the following business names: Roland, Boss, Rodgers and Cakewalk. In this case customers purchasing musical instruments on-line lost the opportunity to buy the products at prices lower than resale prices fixed with distributors.

Roland Polska started fixing with its distributors the minimum resale prices for its products in May 2008 at the latest. Furthermore, the company was actively checking if its distributors applied the prices indicated. A great deal of evidence including e-correspondence between Roland Polska company and its business partners was collected during the inspection with search performed by UOKiK.

For applying competition-restricting practices Roland Polska was imposed a fine amounting to PLN 219 947. Additionally, the President of UOKiK ordered the company to discontinue the prohibited practice.

An inspection with search resulted in identifying by UOKiK another collusion which regards the company Rational, a general representative for the Polish market of the producer of convection steam ovens Rational. The device is used for preparing meals in group feeding, e.g. in restaurants, bars or hotels. According to UOKiK, from November 2009 to October 2011 the company commited its distributors to a further resale of the products at minimum prices. Rational was monitoring its business partners and was active whenever other than the fixed prices were used. For applying the unlawful practice the company was imposed a fine amounting to PLN 276 599.

The mentioned decisions are not final and can be appealed to the court.

A participant to unlawful agreement who intends to apply for the leniency programme may submit the application personally at the seat of the Office of Competition and Consumer Protection in Warszawa, to the employee of UOKiK for official record, by mail, faks or email: leniency@uokik.gov.pl. Answers to all questions regarding the programme, even anonymous, are provided by UOKiK lawyers under the telephone number: +48 22 55 60 555.

Additional information for the media:
Małgorzata Cieloch, Spokesperson for UOKiK
Department of International Relations and  Communication
Pl. Powstańców Warszawy 1, 00-950 Warszawa
Tel. +48 22 827 28 92, 55 60 314, 55 60 430
faks +48 22 826 11 86
E-mail: malgorzata.cieloch@uokik.gov.pl

29 European countries reviewed 562 websites offering loans. The most common irregularity was failing to inform borrowers about the actual cost of credit.The Office of Competition and Consumer Protection participated in the research

This has been the fifth International Internet Sweep Day held by the European Commission which inspected undertakings offering their products and services online. So far, the reviewed websites concerned e.g. on-line sale of tickets and shops offering electronics and household appliances.

The latest research was initiated by 27 EU Member States, Norway and Iceland in September 2011. Altogether they reviewed 562 websites offering fast loans, thus putting in question 393 of them. The most common problem detected in the case of 258 websites was failing to provide complete information in the advertisement of consumer credit. It turned out that these offers did not provide information on the effective annual interest rate which determines the cost of credit, additional payments e.g. the insurance, or the life of a contract. A consumer lacking the knowledge is not able to compare competitive offers and consequently select the most favourable. Additionally, 244 websites did not inform about the essential components of the offer which may influence the final cost of loan, i.e.  the life of a contract or the preparatory charge. 116 websites misled consumers regarding the cost of credit.

Under the joint action UOKiK inspected the content of ten on-line advertisements by undertakings offering loans and instituted proceedings in four cases. Mainly the lack of information concerning the effective annual interest rate for the credit raised the concern of the President of UOKiK.

At the same time UOKiK reminds you that new conditions for granting consumer credits have been binding since 18th December 2011. It is worth noting that loans given before that time are governed by the previously binding provisions. What changes have been introduced?

14 days for withdrawing from the contract

The new provisions prolong the time provided for withdrawing from the contract to as much as 14 days from its conclusion. Additionally, a consumer will nor bear any costs connected with withdrawing from the contract, apart from the rates for the period between taking the credit to its final repayment. Whenever a consumer resigns from a contract, the credit grantor is entitled to no other payments except for the costs incurred for public administration bodies and the notarial fee.

Information form

The vital change is introducing the information form, which is to include all essential information concerning the credit, such as the cost of loan, the total value of repayment, the interest rate, required securities, obligatory insurances etc. Armed with such data, consumers can make a fully aware decision regarding the credit granted. Moreover, they can easily compare offers provided by different undertakings as the standard form was introduced in all  Member States.

Mortgage

The new provisions only slightly refer to mortgage, e.g. information provided to consumers. Right at the stage before concluding a contract, a consumer must be informed inter alia about the total credit value, own contribution required, terms and conditions for credit repayment, the total value of repayment and the cost of credit. In the case of agreement regarding credit index related to a foreign currency, the provided data includes additionally e.g. information on the method and time limits for fixing currency exchange rates, which essentially is the basis for calculating the value of granted credit as well as the rules for converting into the currency for withdrawal and the credit repayment. The whole data must be provided by the creditor on the information form.

Fees and commissions

The new stipulations suppressed the maximum 5 precent treshold of the total value of all payments, commissions and other costs regarding the conclusion of agreement on consumer credit. The mandatory form provides the previous access to complete information concerning all the costs. It allows for reaching  data regarding any costs incurred on the conclusion of an agreement. It serves not only to compare different offers but also to avoid taking risks of paying excessively high fees and commissions.

The earlier repayment

Credit granting institutions will be able to get a compensation in the case of earlier consumer credit repayment. Under the previous Act on consumer credit, the earlier repayment did not result in any other charges. However, the introduced amendment does not refer to all credits, but only to loans with fixed interest rate and only when the amount repaymed exceeds a particular value in the period of 12 months (in Poland – the triple average reimbursement in business sector acording to data by the Central Statistical Office).

Information in advertisements

In advertisements a  great emphasis was put on the way of communicaton with a potential client. Apart from the effective annual interest rate, a consumer must be provided with complete information whenever a creditor determines the cost of obtaing the loan, i.e. the total value of credit, interest rate with clearly distinguished fees included in the total value of credid.
 

Additional information for the media:
Małgorzata Cieloch, Spokesperson for UOKiK
Department of International Relations and  Communication
Pl. Powstańców Warszawy 1, 00-950 Warszawa
Tel. +48 22 827 28 92, 55 60 314, 55 60 430
faks +48 22 826 11 86
E-mail: malgorzata.cieloch@uokik.gov.pl

Powszechny Zakład Ubezpieczeń and Maximus Broker will be obliged to pay over PLN 56 mln for concluding competition-restricting agreement. Their unlawful cooperation concerned group insurance for children and youth as well as workers of education centres in Kujawsko-Pomorskie voivodeship

Under antimonopoly law, agreements which have as their object or effect elimination or restriction of competition are pronounced prohibited. Market division is considered one of the most harmful practices. It occurs whenever undertakings divide a given territory, products and target groups and thus intentionally avoid competition. Many entities lose a lot from this malpractice, however, consumers are particularly affected as they miss out on the opportunity to select the supplier of goods and services. A maximum financial sanction for participation in a collusion is 10 percent of revenue gained in the year preceding the issuance of the decision.

Notification on conclusion of agreement consisting in market division between PZU and Maximus Broker (a company from Toruń) was submitted to UOKiK by a journalist in 2009. The information collected by the Office demonstrates inter alia that the inspection with search perfomed at the companies’ premises proved the collusion was entered in 2009 and it regarded the sale of group personal accident insurances (pl.NNW) to education centres in Kujawsko-Pomorskie voivodeship. These are insurances concluded on behalf of students and school personnel, and however not compulsory, they gained popularity thanks to their low premium. Insurance agreements are usually entered into by the founding body of the centre, e.g. village-mayor, city-mayor or the staroste. The insured party may directly use the offer of the insurer or the intermediary – agent or broker. In Kujawsko-Pomorskie voivodeship over half of communes (gminas) i.e. 85 out of 144 entitled Maximus Broker company to conclude such insurance agreements on their behalf.

Before the collusion the companies were competitors as the insurer intended to contact local governments directly, with no assistance of agents. In July 2009 the companies ceased competition and divided the market.

PZU undertook the commitment to sell group personal accident insurances to education centres exclusively with the assistance of Maximus Broker. In return, the agent recommended the offer of Powszechny Zakład Ubezpieczeń (PZU) to its customers and promoted the package as the most favourable irrespective of its real quality and conditions provided by other insurers. Under the law, the only link between a broker and an insurer can be the agreement on commission rates. Moreover, in compliance with the law, good practice and sector regulations, a broker should act for the benefit of the insuring party (schools and local governments in this case). He should provide the party with the negotiated terms of insurance policy and recommend the most favourable package. As a result of applying the unlawful practice, Powszechny Zakład Ubezpieczeń did not have to compete with its rivals and prepare more favourable offers. Instead, PZU could easily sell its services in schools situated in more than half of communes (gminas) of Kujawsko-Pomorskie voivodeship. Consequently, Maximus Broker wouldn’t run the risk of losing clients if a commune concluded the agreement directly with PZU.

- The results of prohibited practice affected other insurers, entities concluding agreements with Maximus Broker and directly the insured parties. Competitors of collusion participants were taken away a significant distribution channel for selling their services in Kujawsko-Pomorskie voivodeship, schools and local governments lost an opportunity to choose the best offer, students and education staff were not provided with more favourable insurance conditions – states the President of UOKiK, Mrs. Małgorzata Krasnodębska-Tomkiel

It is worth noting that the market position of Maximums Broker has remarkably improved since it concluded agreement with PZU. It has evolved into one of the most powerful insurance brokers in Poland in respect of sale of group personal accident insurances (pl. NNW) for children, youth and personnel of education centres. Thus the undertaking tripled its share on this market.

For the participation in unlawful agreement PZU and Maximus Broker were imposed financial penalties respectively - PLN 56 604 783 and PLN 61 858. The discrepancy of the amounts stems from different incomes gained by the punished entities, not the gravity of offence. Additionally, the President of UOKiK ordered to discontinue the prohibited practice. The decision is not final, it can be appealed to the court.

Counteracting inadmissible agreements of undertakings is one of priorities of the Office of Competition and Consumer Protection. For this reason in 2012 UOKiK will carry out educational campaign targeted at public opinion. Its aim is to show negative effects of collusions for the economy, e.g. higher prices paid by consumers as well as warning against stringent punishment for the application of unlawful practice. In 2012 the Office will be providing information on the action by mass media. Furthermore, UOKiK intends to hold debates and conferences with the participation of all the interested parties. Also, undertakings will receive letters informing on the harmul effects of prohibited agreements.

Simultaneously, the Office reminds you that participants of prohibited agreements may evade financial sanctions thanks to the leniency programme. Undertaking may submit a formal application in person at the seat of the Office of Competition and Consumer Protection in Warszawa, to the employee of UOKiK for official record, by mail, faks or email: leniency@uokik.gov.pl. Answers to all questions regarding the programme, even anonymous, are provided by UOKiK lawyers under the telephone number: +48 22 55 60 555.

Additional information for the media:
Małgorzata Cieloch, Spokesperson for UOKiK
Department of International Relations and  Communication
Pl. Powstańców Warszawy 1, 00-950 Warszawa
Tel. +48 22 827 28 92, 55 60 314, 55 60 430
faks +48 22 826 11 86
E-mail: malgorzata.cieloch@uokik.gov.pl

Sending back a text message implied participation in the lottery and receiving paid text messages until the end of the lottery or until cancellation – this is one of the rules of the lottery “Did you become a millionaire today”, organized upon request of Polska Telefonia Cyfrowa. The President of UOKiK imposed on the undertaking a fine exceeding  PLN 21 million for providing unreliable information

The Office of Competition and Consumer Protection received several hundreds of consumer complaints regarding the lottery “Did you become a millionaire today”, which was organised in the telephony networks operated by Polska Telefonia Cyfrowa. Most people were not aware of how they took part in the lottery. The notifications indicate that the fact of participation in the lottery and the related costs became apparent after they received their phone bills. Concerns of the President of UOKiK were raised by the contents of the messages encouraging to take part in the lottery, received by PTC customers. For example: ERA: This is the time to change your life! You can win one million zlotys from Era today! Send a YES message to 8007 – It’s free! Messages to 8007 are free! Reg: 100m.era.pl PLN 4.88 /day.

The President of the Office of Competition and Consumer Protection took action with respect to the lottery in November 2010. The lottery lasted from 25 October 2010 to 2 February 2011 and offered an opportunity to win a million zlotys. The basic condition for participation was the use of telecommunications services of PTC or purchasing mobile phone wallpaper, a ring tone or a game. To participate in the lottery, one just had to send back a text message to a specified number or answer a voice message by selecting the key tone "1". From this point participants received from PTC one text message per day, for which they had to pay PLN 4.88 VAT inclusive.

The Office determined that the information provided to customers suggested that the notification of participation in the lottery covered one day only. As it turned out – sending back a message implied participation in the lottery until its completion or sending a resignation, and receiving a paid text message every day. The complaints received by the Office suggested that many customers were convinced that participation in the lottery was a one off event.

Another practice questioned by President of UOKiK was the misleading information as to the costs of participation in the lottery. The text message encouraging to participate in the lottery stated that sending a message was free of charge, and at the end it said PLN 4.88/day. According to the Office, this way of communication was unclear and incomprehensible, and was intended to give the impression that the customer was not to incur any costs by taking part in the lottery.

The President of UOKiK found that PTC had misled its customers by providing unreliable information on terms and conditions of the lottery. For the infringement of collective consumer interests PTC was fined PLN 21 262 842 and the duty to publish a decision on the website www.t-mobile.pl for a period of six months. The company ceased the practice. Decision is not final, the undertaking has the right to appeal to the court.

Consumers can receive free of charge assistance in pursuing their rights from consumer ombudsmen, or by calling toll-free number 800 007 707 open Monday to Friday from 9 am to 5 pm. Pursuing the claims may also be facilitated by the Act on combating unfair commercial practices, which gives consumers the opportunity to bring an action in their individual disputes with entrepreneurs. In the course of such proceedings, the court shall verify whether the undertaking’s market practices are unfair. In this case, the entity must prove in court that its market practices did not mislead the consumers. Answers to frequently asked questions can be found on the website of UOKiK.

Additional information for the media:
Małgorzata Cieloch, Spokesperson for UOKiK
Department of International Relations and  Communication
Pl. Powstańców Warszawy 1, 00-950 Warszawa
Tel. +48 22 827 28 92, 55 60 314, 55 60 430
faks +48 22 826 11 86
E-mail: malgorzata.cieloch@uokik.gov.pl