Member Article

An amendment to the Competition and Consumer Protection Act went into force on 18 January 2015. The changes are sweeping.

The Act of 10 June 2014 Amending the Competition and Consumer Protection Act and the Civil Procedure Code was published on 17 July 2014 and went into force six months later, on 18 January 2015.

Below we review some of the key changes introduced by the amending act, which we also reported on several times during the course of the legislative process.

Merger control

The new system of merger control will have two stages. Cases that do not require market research or generate doubts as to their effect on the market should be decided within one month, and cases that are complicated or require further market analysis will enter a second stage that may take an additional 4 months.

At the applicant’s request, conditional approval may be kept confidential with respect to the deadline by which the applicant must meet the conditions.

The range of concentrations that require notification has also changed to exclude the following:

• A merger of undertakings or creation of a joint undertaking where none of the participants had turnover of greater than the equivalent of EUR 10 million in either of the two financial years preceding the concentration
• Acquisition of control over one or more undertakings belonging to one capital group, accompanied by acquisition of a portion of the assets of the undertaking(s) belonging to the capital group, where the combined turnover of the acquired undertaking(s) and the turnover generated by the acquired assets did not exceed the equivalent of EUR 10 million in the territory of Poland in either of the two financial years preceding the concentration.

The rules for calculating turnover for specific types of concentrations and multi-stage transactions have also been clarified.

Leniency

A new “leniency plus” programme has been introduced, with the grant of an additional reduction in penalties (by 30%) and the status of the initial leniency applicant in further proceedings, in exchange for information about another anticompetitive arrangement the undertaking has been involved in.

The requirement to cease participation in the anticompetitive arrangement is now more flexible (no later than immediately after filing the leniency application).

The initiator of the anticompetitive arrangement has been removed from the group of entities that are ineligible for obtaining leniency.

The general rules for calculation of penalties in the case of leniency have been modified. Previously a ceiling for penalties was set. Now, instead, a specific percentage will be deducted from the penalty that would have been applied if the leniency procedure were not followed.

The specific requirements for the contents of a leniency application, a short-form application and a simplified application, as well as the conditions for filing of the applications, have been carried over from the administrative practice into the act itself.

Remedies

Under this entirely new institution in Polish law, the President of the Office of Competition and Consumer Protection (UOKiK) may issue a decision prohibiting or requiring specific actions on the part of an undertaking guilty of participation in an anticompetitive arrangement or abuse of a dominant position.

Settlement

Another new feature is a reduction in penalties by 10% when, at the request of the President of UOKiK, an undertaking voluntarily admits that it applied a particular practice, or acknowledges the findings of the regulator, and does not dispute the amount of the penalty or appeal against the decision.

Liability of individual managers

This change is perhaps the most controversial and commented on. Individuals (defined as “managing persons”) may be fined up to PLN 2 million for knowingly, by act or omission, allowing an undertaking to violate the prohibition against anticompetitive arrangements (except for bid-rigging in public tenders). In an open letter to the business community recently published by the President of UOKiK on the regulator’s website, encouraging leniency applications, it is stressed that this liability applies only to acts or omissions occurring from the effective date of the amendment forward (Art. 6 of the amending act).

Inspection and search

The procedures for inspection and search have been divided, and the rights and obligations of inspectors and the targets of inspection have been clarified. A procedure for challenging actions violating the rights of persons being searched or other persons (without suspending the search) has been introduced, and the regulations concerning fines for failure to cooperate during an inspection have been clarified.

Time periods

• Limitations period with respect to anti-competitive practices: instead of one year, 5 years from the end of the year in which the practice ceased to be applied (for businesses) or the end of the year in which a manager ceased the behaviour for which he or she may be held liable (for individuals)
• Period for filing an appeal against a decision of the President of UOKiK: one month instead of 14 days
• Period for conducting explanatory proceeding: 4 months, and in particularly complicated cases 5 months (instead of 30 days and 60 days respectively).

Other changes concern, among other things, public warning of suspicion of violating the collective interests of consumers; penalty provisions (including adoption of the “turnover” of an enterprise in the prior financial year, instead of “revenue,” as the basis for determining fines); and procedure before the President of UOKiK (including in connection with the new rules for inspection and search).

At the UOKiK website, users can obtain a general list of changes as well as the consolidated text of the Competition and Consumer Protection Act of 16 February 2007, in .pdf, reflecting the recent changes.

Executive regulations pursuant to the amended Competition and Consumer Protection Act were published on 15 January 2015:

• Regulation of the Council of Minister on the Method of Calculation of the Turnover of Enterprises Participating in a Concentration of 23 December 2014 (Journal of Laws Dz.U. 2015 item 79)
• Regulation of the Council of Ministers on Notification of the Intended Concentration of Enterprises of 23 December 2014 (scope of required information and documents as well as a new “WID” form—the list of information and documents that must be submitted with notification of a concentration, Journal of Laws Dz.U. 2015 item 80)
• Regulation of the Council of Ministers on the Method and Procedure for an Application for Waiver or Reduction of a Fine of 23 December 2014 (formal and procedural issues of leniency, Journal of Laws Dz.U. 2015 item 81).

Like the amendments to the act, they went into effect on 18 January 2015.

In the near future, Poland’s competition regulator is also expected to issue new guidelines for merger control, penalties and leniency. The first set of guidelines have already completed the public consultation process.