Seven enterprises dealing in communal waste collection in Częstochowa concluded an illegal agreement fixing prices for their services, ruled the President of UOKiK. The enterprises were ordered to pay a total of nearly PLN 3 million

Proceedings concerning the case were launched on the basis of press information received by the Office. According to the information, the biggest enterprises collecting waste in Częstochowa, holding at least 70 % of the market’s share, were planning to raise prices for their services to the same or similar level. During the antitrust proceedings opened in December 2007, the Office investigated whether the activities of companies operating under the following names: Ochrona Środowiska, Sita, Remondis, Firma Professional, Zakład Oczyszczania Miasta, Prywatny Zakład Oczyszczania Miasta and Wywóz Nieczystości oraz Przewóz Ładunków resulted from an illegal agreement.

The Act on competition and consumer protection contains a very broad definition of illegal agreements. These may be agreements concluded in whatever form between two or more independent enterprises and having or threatening to have a negative influence on competition.

According to UOKiK, as of 1 October 2006, five of the enterprises increased their communal waste collection prices to the same level. On 1 November 2006, an identical increase was put in place by the two remaining companies. What is more, the decisions on increasing prices were taken by particular entrepreneurs at the same time.

According to the Polish antitrust authority, the simultaneous introduction of unified prices for the communal waste collection services was a result of arrangements between the enterprises. The amount of the price increase is an evidence for illegal agreement, as prices which were previously diversified to a certain degree, were subsequently increased to the same level.

The Office of Competition and Consumer Protection does not undermine the companies’ right to increase the prices for their services but the way it was effected. Establishing price levels jointly is forbidden by the antitrust law. Concluding the agreement on common price levels, the companies eliminated price competition between each other, simultaneously avoiding the risk of losing their market shares, which may have taken place if they increased prices individually. The agreement was also detrimental to the recipients of the services, including consumers. They were deprived of their basic free market economy right, i.e. the possibility to choose the offer which is the best in terms of price.

Under the Act on competition and consumer protection, when competition restricting practices are found, the President of UOKiK may impose financial sanctions of up to 10% of the involved company’s previous year revenue. In this case, the following fines were imposed: Ochrona Środowiska - PLN 9 186, Sita - PLN 480 759, Remondis - PLN 1 852 213, Zakład Oczyszczania Miasta - PLN 87 230, Prywatny Zakład Oczyszczania Miasta - PLN 238 908, Wywóz Nieczystości oraz Przewóz Ładunków - PLN 267 557, Professional - PLN 34 240.

Already during the Office’s proceedings, the companies introduced new pricing for the their services. Consequently, in its decision UOKiK recognised that the practice had been discontinued.

The decision is not final, the enterprises have the right to appeal to the Court of Competition and Consumer Protection.

Additional information:
Małgorzata Cieloch, Spokesperson for UOKiK
Pl. Powstańców Warszawy 1, 00-950 Warsaw, Poland
Tel. (+48 22) 827 28 92, 55 60 106, 55 60 430
faks (+48 22) 826 11 86
E-mail: mcieloch@uokik.gov.pl

UOKiK Branch Office in Katowice
ul. Kościuszki 43, 40-048 Katowice, Poland
Tel. (+48 32) 255 26 47, 256 46 96, 255 44 04
faks (+48 32) 256 37 64
E-mail: katowice@uokik.gov.pl