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Office of Competition and Consumer Protection

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30 years of competition protection in Poland

< previous | next > 11.12.2020

30 years of competition protection in Poland
  • More than 4 thousand decisions on anti-competitive practices and more than 12 thousand decisions on merger, demerger and transformations - are the outcome of 30 years of work of the Polish anti-monopoly office.
  • The record-high fine exceeding PLN 29 billion was imposed on Gazprom for merger without the consent of the President of Office of Competition and Consumer Protection.
  • The Office has been active in the international arena for many years now.

The Polish Antimonopoly Office was established on 13 April 1990 under the Act on Counteracting Monopoly Practices. It was the first institution of this kind in the post-communist countries.

Over the 30 years of the Office history its tasks, competences and tools have changed. Throughout this time, however, we have consistently monitored the compliance with the rules of competition and fair playing field. Thanks to the activities of the Office, the market-driven economy can develop freely to the benefit of both fair businessmen and consumers who, as a result, get wider choice, high quality products at an affordable price. Fair competition is sheer profit for businessmen, consumers, economy. However, the market still requires a lot of effort to operate efficiently and fairly,” says Tomasz Chróstny, the President of the Office of Competition and Consumer Protection.


Download message from Tomasz Chróstny, president of UOKiK

 

 

 

 

 

 

 

 

 

 

 

 

Evolution of Office powers

Initially, the responsibilities of the Anti-monopoly Office included control of the ownership transformations of state-owned enterprises and the merger of market players as well as combating monopolistic practices through eradication of market position abuse and anti-competitive alliances. In 1996 the Anti-monopoly Office was renamed into Office of Competition and Consumer Protection (UOKiK).

Another turning point in the Office operations was the enactment of the Act amending the Act on Competition and Consumer Protection (“Act”) in 2001. The Act put into order the existing solutions, taking into account the need to harmonize the national regulations with the EU legislation. Upon the Poland’s accession to the European Union in 2004 the President of the Office of Competition and Consumer Protection (“Office”) obtained a new tool for combating illegal restrictive agreements - the Leniency Programme. In 2007, the current Act on Competition and Consumer Protection was passed, and in 2015 it was significantly amended, which introduced, inter alia, two-stage procedure in merger control cases. Then the President of the Office was also given power to impose financial fines on individuals responsible for participating in competition restrictive agreements. The Act also established the institution of voluntary submission to punishment. 2017 saw the launch of the Whistleblower Programme.

Over the years, the President of the Office has gained new powers in the field of broadly understood competition protection.

  • Since 2000 the Office has been monitoring public aid granted to the Polish businessmen, and since 2004 it has been coordinating its proceedings in front of the European Commission.
  • Since 2017, under the Act on Counteracting the Unfair Use of Contractual Advantage, the President of the Office has been intervening in the agri-food market to eradicate unfair commercial practices against weaker market players such as farmers.
  • Effective from 2020 the Office has been equipped with the power to combat payment backlogs with an option to impose penalties on the largest debtors.

Key decisions and fines

During the 30 years of the Office operations (1990-2019), the President of the Office issued 4250 decisions on anti-competitive practices and 12 143 decisions on corporate structure. It should be born in mind that in the first period up to 2001, the latter concerned not only merger as is now, but also demerger and transformations - a total of 8658 decisions were issued in that period. Meanwhile the decisions on antitrust practices totalled 2247 at that time.

The first decision in the history of the Anti-monopoly Office, taken in 1990, concerned the pricing practices of the Warsaw Passenger Car Factory (FSO). In a single month, the price of the Fiat 125 passenger car tripled. One of the effects of the measures taken by the President of the Office at that time was the reduction of customs duty on this type of cars by 70 percent. Consequently, in the following year, imports exceeded domestic production three times, thus creating market competition, which was beneficial for the consumers.

Between 2002 and 2019 The President of the Office issued 3485 merger control decisions, 1599 decisions on the abuse of dominant market position and 404 decisions on competition restricting agreements. We picked up 5 decisions, since we believe they played a pivotal role:

  1. Prohibited agreement between the paint manufacturer and DIY markets - 2006. The President of the Office imposed fines with a total of almost PLN 110 million on the parties to the prohibited agreement: Polifarb Cieszyn-Wrocław and the owners of seven (7) DIY markets. The Office recognized that traders jointly set prices for the offered products, which had an impact on consumers' pockets.
  2. Illegal practices of banks - 2006. Twenty banks jointly set interchange fees for Visa and MasterCard payment card transactions. It was a kind of tax imposed by banks on traders, which could also translate into higher consumer prices. The President of the Office imposed fines on the banks with the value exceeding PLN 164 million. 
  3. Cement Cartel - 2009.  The maximum fines totalling over PLN 411 million for participation in the cartel were imposed by the President of the Office on the major cement producers, with the total market share reaching almost 100 per cent. Seven companies had divided the market and set prices for more than 11 years, exchanging confidential information for that purpose.
  4. Construction of the Nord Stream 2 Gas Pipeline - 2020. The President of the Office imposed a record-high fine exceeding PLN 29 billion on Gazprom and a fine over PLN 234 million on 5 other companies participating in the gas pipeline construction - this is a result of the lack of Office consent for the deal. The entities involved also have to terminate contracts concluded for financing the NS2 gas pipeline.
  5. Price fixing and market sharing in the Warsaw heat supply market - 2020. The President of the Office imposed nearly PLN 120 million of fines on member companies of the Veolia Polska Group for an agreement with member companies of the PGNiG Group concerning market sharing, price and bid rigging and, as a result, higher heating prices for the City of Warsaw. For the first time, the manager directly responsible for the infringement was also punished.

In total, in 2000-2019, the President of the Office for Competition and Consumer Protection imposed over PLN 1.36 billion of fines for entering into anti-competitive agreements and almost PLN 620 million of fine for abuse of the dominant market position.

International co-operation

An important aspect of the 30th anniversary of Office operations are its international activities, which complement and strengthen national activities. The Office is particularly closely committed to the activities of the European Competition Network (ECN). The Office became ECN member on par with the Poland’s accession to the EU in 2004. The network consists of the European Commission and the competition protection authorities of the Member States. The ECN aims at securing consistent and uniform application of competition law across the EU. It is a platform facilitating the exchange of experience and provide support in the application of investigative tools and conduct of proceedings. The representatives of the UOKiK are involved in the ECN activities participating in working groups on cartels or vertical agreements and in sector subgroups concerning, inter alia, banking, energy, food, media and the digital sector. Currently, one of the most important challenges within the ECN framework is the application of competition rules during Covid-19 pandemic and the implementation into the Polish law of the ECN+ Directive, which provides superior tools for antitrust authorities to enforce competition rules.

Once the ECN+ Directive is transposed into national law, all NCAs will have the same minimum toolbox to make them as effective as the European Commission is. I understand that for the Polish Office the Directive will strengthen its independence and will provide it with more effective decision making powers” says Olivier Guersent, Director General, DG Competition, European Commission. He wishes all the best to UOKiK on its 30th anniversary and says that since its creation in 1990 the Polish Office has played an important role in ensuring proper functioning of the economy in Poland.


Download message from Olivier Guersent, European Commission

 

 

 

 

 

 

 

 

 

 

 

 

As a result of cooperation on the ECN platform decisions are issued by the national antitrust authorities in proceedings conducted under the EU legislation. The European Commissions issues opinions on them. The first such decision was issued by the President of the Office in 2006 and concerned the abuse of dominant market position by Telekomunikacja Polska (the Polish Telecom), which illegally raised the prices of some international calls. The latest example of successful cooperation is the fine for Yamaha Music Europe for setting minimum prices with distributors for the resale of music equipment in on-line stores in Poland with distributors.

Since 2001 the Office has also been a member of the International Competition Network (ICN). The main task of this organization is to exchange information and experience on the best ways to combat restrictive practices. In addition to the representatives of anti-monopoly authorities, also non-governmental advisers, e.g. representatives of business, consumer groups, academics, participate in the meetings. In 2013 the Office hosted the 12th Annual ICN Conference. Currently, the Office is involved in the work of Cartel Working Group and Agency Effectiveness Working Group.

Another important structure in which the Office is a member is the OECD Competition Committee. It brings together the heads of the antitrust authorities of the Member States from all over the world to analyse competition policy and promote market reforms, including measures to counteract competition restrictive practices.

Future Challenges

The 30 years of history of the Polish anti-monopoly authority is an obligation. We want to enforce the principles of fair competition in Poland even more effectively. We focus on analytics, new technologies and the development of computer forensics. New tools will help us meet the challenges of the changing economy,” says Tomasz Chróstny, the President of the Office.

Currently, the UOKiK is working on the Competition and Consumer Protection Policy for the years to come. Thirty-year-old Office focuses on the application of artificial intelligence (AI) in its proceedings and the knowledge and experience gained during three decades of economic development.

 

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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