J. Sroczyński for WuW No. 12/2010 – Proceedings brought by the Office of Competition and Consumer Protection against PKN Orlen and ZAiKS
The President of the Office of Competition and Consumer Protection (“OCCP”) issued a prohibiting decision to the Polish leading oil producer, PKN Orlen, and two undertakings operating so-called “patronage” petrol stations. The OCCP contested the provisions of the distribution agreements which reserved for PKN Orlen the right to fix petrol sale prices on the two stations. The resale price maintenance practice was found contrary to the provisions of the Polish antimonopoly law which prohibits price fixing, recognized as a hard-core restriction of competition. This means that the OCCP did not need to take into account whether and to what extent a given arrangement was actually implemented and whether it fulfilled its purpose or caused any effect. The OCCP underlined that vertical price fixing is always negative for consumers because it limits their ability to choose between offers differentiated by price and quality.
The fine imposed on PKN Orlen exceeds 12.5 million Euro. The OCCP’s decision is not final and can be appealed to the Court of Competition and Consumer Protection.
The leading Polish copyright collective society, ZAiKS, enters into agreements with authors and other persons authorized to copyright enforcement. ZAiKS performs the collective management of copyrights, whereby it collects fees from entities using them, such as media companies or publishers. Subsequently, it distributes the collected fees among its contractual partners. The OCCP examined the content of the collective management agreements concluded by ZAiKS and questioned the applied termination clause. In particular, the OCCP challenged the duration of the termination period, determined as six months with effect at the end of a calendar year. This means that in some cases the time between submission of the termination notice by an author and the final termination date of the agreement could extend to almost one-and-a-half year. The OCCP expressed an opinion that such long term could lead to a restriction of competition on the market for collective management of copyrights in musical and textual-musical works. Bound by the agreements with ZAiKS, authors could not choose another, i.e., non-collective form of management of their copyrights. In addition, authors were largely precluded from the possibility to accept alternative, competitive offers of other collective societies. As a result, this petrification of the market resulted in significant entry barriers for competing collective societies.
ZAiKS decided to eliminate the likely threat of a prohibition decision and fines by offering commitments to the regulator. ZAiKS committed to amend termination clauses in its agreements until December 31, 2010. The new termination period will be shortened to three months, effective on each calendar six-month period. The OCCP accepted this commitment and did not impose any fine on ZAiKS. The OCCP’s proceedings were conducted pursuant to the Polish antimonopoly law, in connection with Article 102 TFEU. The EU law was applicable in light of the effect of ZAiKS’ practice on trade between Member States, given the foreclosure of the Polish market to other European collective societies. The OCCP’s final decision was adopted in consultation with the European Commission.
The OCCP has released for consultation the draft merger guidelines, intended to facilitate preparation of merger notifications. The OCCP assumes that the guidelines will help making the decision process more smooth and thus expedite. All interested parties were invited to submit comments to the guidelines before September 30, 2010. At the same time, the OCCP informed that the average yearly input of merger notifications exceeds 100.
J. Sroczyński, Wirtschaft und Wettbewerb. Developments in national competition law, No. 12/2010.
