J. Sroczyński for WuW No. 3/2018 – Decision of the President of the OCCP concerning a cartel in the market for furniture wood panels
The President of the Office of Competition and Consumer Protection (“OCCP”) has cleared the acquisition of EDF Polska by PGE, a state-controlled major producer of energy. In the course of the merger control proceedings, the OCCP raised competition concerns as to a possible dominance of PGE on the Polish energy market after the acquisition. According to the OCCP, energy produced in EDF’s power plant in Rybnik would be mainly sold within the PGE group, which would threaten competition on the retail market. In response to the OCCP’s concerns, PGE proposed a behavioural remedy, consisting in an obligation to sell all energy produced in Rybnik on the power exchange market until 2021. Upon acceptance by the OCCP of this remedy, the transaction was conditionally cleared.
The OCCP investigates whether Polska Press, a large player on the media market, complied with a decision permitting it to acquire rival Media Regionalne, on the condition to divest a local newspaper, Dziennik Wschodni. The OCCP will verify whether the new owner of the newspaper is fully independent of Polska Press. If the condition imposed by the OCCP would not be fulfilled, the authority may impose daily fines up to 10,000 euro and order a divestment through an administrative decision.
The OCCP initiated several proceedings on the media market to assess its current structure and degree of concentration. The test focuses on advertising, distribution, press, printing, internet platforms, pay TV, and internet services. The OCCP is checking the position of main market players and their potentially abusive practices. The authority claims that especially the advertising market has become highly concentrated, which may facilitate illegal behaviour.
The OCCP prohibited bid-rigging practices on the market of heating services provided for the Polish army. Three suppliers of those services agreed on a bid-rigging scheme, pursuant to which the cheapest offer would be deliberately incomplete and thus rejected. In consequence, the subsequent, more expensive offer would be winning. The army officials became suspicious of this mechanism and notified the OCCP, whose investigation confirmed the existence of the prohibited practices. The OCCP fined only two violators, since the third one liquidated its activities during the investigation.
The OCCP opened antimonopoly proceedings against PKP Polish Railway Lines, a state-owned monopoly owner of Polish railways. PKP was confronted with allegations of abusing its market position vis-à-vis suppliers of products and technologies applied on railways. The abuse takes form of various onerous terms of supplies, imposed in the pertinent procedures and regulations. In particular, the OCCP questioned the excessive limitation of PKP’s liability for damages arising in connection with testing of the supplied products. The OCCP also objected against the rule which automatically suspends a supplier who filed a lawsuit against PKP.
The OCCP prohibited a cartel of five companies producing furniture wood panels, which were engaged between 2008 and 2011 in price collusions and exchange of sensitive information. Two violators belong to the Kronospan Group, two others to the Pfleiderer Group, and one belongs to Swiss Krono. Kronospan and Pfleiderer received total fines of 30 million euro, while Swiss Krono escaped fines due to successful leniency. The illegal arrangements took place between top managers and board members, who had meetings at fairs, airports or in company headquarters. The cartelists were monitoring their mutual behaviour and those who departed from the common actions were reprimanded. The OCCP consulted its decision with the European Commission, due to an effect of the cartel occurring on the EU market.
J. Sroczyński, Wirtschaft und Wettbewerb. Developments in national competition law, No. 3/2018.
