J. Sroczyński for WuW No. 9/2012 – Launch of antitrust proceedings against chipboard manufacturers

The Court of Competition and Consumer Protection (the “CCCP”) dismissed an appeal  of the largest Polish producer of electric energy, PGE, from the decision of the President of the Office of Competition and Consumer Protection (“OCCP”), in which the OCCP prohibited an acquisition of Energa, a distributor of energy in the northern Poland. The OCCP was concerned that the planned acquisition would lead to a significant impediment of effective competition on the energy sales market, to the detriment of consumers who would be forced to accept higher prices. The confirming ruling of the CCCP is not yet final and can be appealed to the Court of Appeals.

The OCCP has raided five companies producing chipboards and fibreboards, i.e., Kronospan Szczecinek, Kronospan Mielec, Pfeiderer Grajewo, Pfleiderer Prospan and Kronopol. In result of the dawn raid, allegations were raised against all the above companies, concerning horizontal price fixing and exchange of sensitive market information. The initiated antimonopoly proceedings cover also potential violations of EU law, since the activities of the companies exert effect also on the Common Market. In addition, Kronopol was charged with allegations of vertical price fixing, consisting in setting resale prices with its distributors.

Polskie Górnictwo Naftowe i Gazownictwo (PGNiG), a gas incumbent, infringed the Third Party Access rule (TPA), stipulating overly long termination periods in contracts for the delivery of gas. In extreme cases, clients intending to change the gas supplier, would have to wait 15 months until termination of their contracts with PGNiG. PGNiG committed to change this practice and to allow earlier termination. As a result, the OCCP issued a commitment decision to PGNiG, which by operation of law may not include financial fines. Otherwise, fines for a violation of the dominant market position and collective consumer interests, which could be considered in the case of PGNiG’s restrictions of the TPA, may reach 10% of turnover for the previous fiscal year.

Carrefour lost its appeal from the OCCP’s conditional merger decision concerning the FMCG market, in which the OCCP agreed to Carrefour’s acquisition of rival Ahold, on the condition that Carrefour divests nine shops within 18 months from the date of the decision. However, Carrefour delayed the sale of two shops for one month, for which delay it received a fine of 140,000 euro. Carrefour argued that the full, timely divestment was impossible for independent reasons, including a lack of satisfactory purchase offer. The Court of Appeals upheld the first instance ruling of the CCCP, and thus the OCCP’s decision imposing the fine on Carrefour, describing the nature of the liability for a delayed divestment as in fact unrelated to diligent behavior of the fined undertaking. The ruling of the Court of Appeals is final but can be subject, on certain conditions, to an extraordinary appeal to the Supreme Court.

J. Sroczyński, Wirtschaft und Wettbewerb. Developments in national competition law, No. 9/2012.