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Office of Competition and Consumer Protection

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Procedure against Allegro. A new platform for whistle-blowers

< previous | next > 10.12.2019

Procedure against Allegro. A new platform for whistle-blowers
  • Did Allegro violate the antitrust law by favouring its on-line shop compared to other sellers?
  • UOKiK will decide it during its proceedings.
  • The Office also launched a special system for collecting information from anonymous whistle-blowers.

Allegro is by far the most popular on-line shopping platform in Poland. Research conducted in 2019 by Kantar at the request of UOKiK shows that when it comes to buying new items on-line, 79% of consumers prefer buying products from Allegro than from other e-commerce sites. For some entrepreneurs, the opportunity to sell on Allegro may be the only way to reach a wide range of customers. However, many of them complained to the Office about unequal conditions of competition. On the one hand, Allegro acts as an intermediary platform in electronic commerce, on the other - it competes on this platform with other sellers, in particular through its own on-line shop known as the Official Allegro Shop.

 Complaints from entrepreneurs coincided with the Office’s observations. That is why we initiated an investigation and searched the premises of Allegro. Analysis of the collected material showed that illegal practices may have taken place. We brought a charge of abuse of a dominant position against the company. We suspect that by using its high market status, Allegro favoured its own sales activity compared to the sales activity conducted by other sellers on its platform, says the President of the UOKiK, Marek Niechchiał.

What did Allegro do?

Firstly, the company might have used information on the platform’s operation, including the relevancy algorithm, unavailable to other sellers, in order to better position and display its own offers in the search results according to the relevancy criterion. Secondly, some sales or promotional features were only available to the Allegro Official Shop, and other sellers were unable to use them. Suggesting the right search phrase could serve as an example here: when consumers were searching for a particular product via search engines, they received an automatic message suggesting they go to the Official Allegro Shop. Thirdly, the platform owner had an option of using special promotional banners on an exclusive basis, which increased interest in its own offers on the platform.

Actions taken by Allegro could have adversely affected the competitive situation of independent on-line shops whose products may have been less visible on the platform compared to Allegro’s offers. Consequently, products offered for sale by independent sellers may have been less frequently chosen by consumers, says Marek Niechciał, President of UOKiK.

Why could such actions be considered unlawful?

In accordance with the antitrust law, it is prohibited to abuse one’s dominant position. In practice it means that entrepreneurs who have considerable advantage over their competitors are not privileged. Some actions that smaller entrepreneurs are allowed to take cannot be undertaken by entrepreneurs holding a dominant position. In the case of Allegro, favouring its shop over other sellers can be considered such an action. Antitrust authorities have handled or are still handling similar cases all over the world. For example, the European Commission decided that Google was abusing its position on the search engine market by promoting other products it offers.

The fine imposed on the company amounted to € 2.4 billion. The EC and several other countries are currently conducting similar proceedings regarding the dual role of Amazon.

We do not question the fact that Allegro can run a shop on its own platform and compete there with other entities. We also do not prohibit the company from developing sales algorithms or collecting information on consumer behaviour. We do however claim that Allegro’s own shop should operate in same conditions as any other seller selling its products on this company’s platform. It cannot be favoured, says Michał Holeksa, Vice-president of UOKiK.

What fines can be imposed on the company?

There is a fine of up to 10% of company’s turnover for using competition restricting practices. Allegro’s practice could have an impact on trade between EU countries, which is why the Office is conducting proceedings in connection with the violation of both Polish and EU regulations.

Website for whistle-blowers

Detecting competition-restricting practices is one of the UOKiK’s priorities. In order to increase efficiency in this area, the Office needed help from people willing to expose misconduct or illegal activity anonymously.

When I was appointed the President of UOKiK for the second time in 2016, a program for whistle-blowers was one of my first ideas. We opened a dedicated hotline and email address to encourage individuals to report any competition-restricting practice on an anonymous basis. As a result, we received several thousand reports. This is a very good result, but we want them to contain more valuable information. That is why we developed a special platform that will make it easier for people to report irregularities, says President Marek Niechciał.

Anyone who wants to notify the Office of rival companies cooperating for their mutual benefit may use the following website: https://konkurencja.uokik.gov.pl/sygnalista/. Filing a report is simple and intuitive as all one has to do is filling in the fields of the form. The platform allows its users to attach documents confirming irregularities, e.g. photos or scans. This will help the Office assess the information more efficiently.

Importantly, the system protects the whistle-blower’s identity. Once an individual comes forward as a whistle-blower, he/she will receive a unique identifier and a password that will allow him/her to log back into the system and, if necessary, continue communication with the Office. The connection is encrypted and any metadata from attachments are removed. Only a limited number of UOKiK employees have access to notifications, but even they are unable to discover the whistle-blower’s identity.

We value internal whistle-blowers in particular as they can provide us with information that is not publicly available, such as e-mails, internal notes, information about meetings between competitors. Such people may particularly care about their anonymity because they take the risk of facing retaliation from the employer. Thanks to our platform they will not have to fear this, because their anonymity will be protected, says Michał Holeksa, the Vice-president of UOKiK.

The system used by UOKiK is also used by companies throughout Europe and antitrust authorities from Sweden and Austria. The German Bundeskartellamt and the European Commission have adopted similar solutions.

Obtaining evidence relating to antitrust violations was one of the topics of the conference entitled “Effective Combat Against Collusion: Practice and Challenges”. The meeting was organized by UOKiK on the occasion of the World Competition Day. It was attended by representatives of the European Commission, antitrust authorities from various countries, lawyers and experts on competition law.

Additional information for the media:

UOKiK Press Office
Pl. Powstańców Warszawy 1, 00-950 Warszawa, Poland
Phone +48 695 902 088, +48 22 55 60 246
E-mail: [SCODE]Yml1cm9wcmFzb3dlQHVva2lrLmdvdi5wbA==[ECODE]
Twitter: @UOKiKgovPL

Attached files

 

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