J. Sroczyński for WuW No. 6/2011 – A review of decisions by the Office of Competition and Consumer Protection and the case law of the Court of Competition and Consumer Protection

The President of the Office of Competition and Consumer Protection (“OCCP”) issued its fourth prohibiting merger decision since the joining by Poland of the European Union in 2004. This time the blocked merger was notified by PGE, the largest Polish producer of electric energy. PGE intended to take control of Energa, a regional producer and distributor of energy operating in the north-central Poland. Both companies are State-owned and the merger was part of the governmental plans to reorganize the energy sector. However, the OCCP has found that the effects of the merger would be anticompetitive. In particular, a detailed market analysis indicated that the new entity could easily dictate sale conditions and prices of energy. Thus, the merger would adversely affect the situation of consumers. The President of the OCCP issued a prohibiting decision in spite of strong political pressure to clear the notified transaction.

The President of the OCCP issued another prohibiting decision in a series of vertical resale price maintenance cases under review since 2005. The collusion took place on the paints and do-it-yourself markets. The decision was issued to the producer of paints and coatings, Akzo Nobel, and its four DIY customers, Castorama, Leroy Merlin, OBI and Praktiker. All were accused of vertical price fixing, aimed at maintaining a similar level of prices for main paint products. Castorama successfully applied for leniency and received the full immunity. Akzo Nobel, who was the second leniency applicant, benefitted from 50% reduction. The remaining undertakings were fined in the total amount of 13.5 million Euro.

The Court of Competition and Consumer Protection (“CCCP”) upheld the OCCP’s decision issued to State Forests, prohibiting discriminatory treatment of smaller purchasers of wood, in the situation of constant deficit of the relevant product. In recent years, State Forests, enjoying a monopolistic position on the Polish wood market, applied more favorable trading conditions to its larger customers, who could purchase wood in limited tenders. Smaller buyers could create a “history of purchases”, through participation in open electronic auctions. The OCCP questioned the disproportionate privilege established for larger customers, for whom almost 80% of the product volume was reserved. In effect of the OCCP’s decision, State Forests lowered the limited tender level to 55%. Nevertheless, State Forests challenged the OCCP’s decision to the CCCP, which confirmed the reasoning of the regulator. The CCCP’s ruling is not yet final and can be appealed to the Appellate Court.

The President of the OCCP initiated the antimonopoly proceedings against the National Medical Chamber (“NIL”), the professional organization of medical doctors and dentists, whose membership is obligatory and which can exercise various powers over its members. NIL was faced with allegations of applying anticompetitive practices on the market of homeopathic medicinal products prescribed by doctors. The allegations remain in connection with a series of steps undertaken by NIL to eliminate homeopathic medicines from any form of treatment applied by doctors. NIL issued several official statements in that regard, accusing doctors who prescribe homeopathic medicines of violation of the deontological medical code. A complaint against NIL was filed by the business organization of homeopathic producers, who indicate that NIL’s campaign against homeopathy is illegal, since the medical authorities have no right to interfere with decisions of doctors applying officially admitted medicines, registered and accepted for circulation by the relevant state drug control authorities.

J. Sroczyński, Wirtschaft und Wettbewerb. Developments in national competition law, No. 6/2011.