J. Sroczyński for WuW No. 6/2020 – Financial penalty imposed on aviation companies for collusion in the market for services relating to the vaccination of foxes against rabies

The President of the Office of Competition and Consumer Protection (“OCCP”) fined six aviation companies a total of 0.6 million euro for bid-rigging on the market for fox rabies vaccine services. The vaccines are applied to foxes by dropping them from airplanes onto forests and meadows. Tenders for the vaccine services are organised by the District Veterinary Inspectorates. The fined companies, which represent a majority of service providers, participated in the tenders in consortia. The OCCP has found that in the years 2014 – 2015, these consortia were created for the purpose to eliminate competition. The consortia were either not necessary to perform the services or could consist of a smaller number of participants. The OCCP obtained evidence that the consortia were used as tools to coordinate offers or otherwise obstruct competition. In 2014, all 12 tenders were coordinated by the bidding companies, and in 2015, nine out of 10 tenders.       

Following a market test and presentation of competition concerns, the OCCP has conditionally cleared the acquisition of Multimedia Polska by rival Vectra, both active on the market for cable television and access to the internet. The OCCP defined the geographic market as the area of a town where the services are provided. On the product side, the OCCP distinguished between paid cable and satellite television, and digital terrestrial television, and between landline and mobile internet access. The consent of the OCCP has been conditioned upon a structural remedy of Vectra divesting television and internet networks in eight towns. The other remedies are behavioural. Vectra should enable subscribers from 13 towns to freely change the operator. The level of the performed services until divestment should be no worse than hitherto offered. In addition, prior to divestment Vectra should not conduct active marketing to attract subscribers of potential buyers.

The OCCP cleared an acquisition by the pharmacy network DOZ of its franchisee Medix. The remedy imposed by the OCCP concerns a divestment of one pharmacy. The notification was considered in two stages and the OCCP presented competition concerns in relation to the local market of the town of Tczew. The potential buyer should be accepted by the OCCP and should guarantee to continue operation of the pharmacy. The geographic market was defined by the OCCP as the area of one kilometer from a pharmacy.

Dino Polska, a supermarket network, was fined 23 thousand euro for not notifying the acquisition of assets of Domex, consisting of 12 shops. Dino Polska submitted the notification but described the transaction as “multi-stage”, involving an acquisition of real estate, its lease to Domex and, upon clearance by the OCCP, subsequent takeover of the material and non-material assets of the shops. The OCCP has nevertheless decided that the concentration was already consummated at the first stage, hence the imposed fine.

Following market test, the OCCP has unconditionally cleared the acquisitions by Kaufland of four shops of Tesco, in different towns of Poland. The OCCP has defined the market as the local HSD market (hypermarket, supermarket, discount shop). The OCCP has found that the participants of the concentration are exposed to strong competition from other large networks, such as Biedronka, Leclerc, Piotr i Paweł, Stokrotka, Carrefour, and Auchan.

The OCCP initiated antimonopoly proceedings against Spokey, a distributor of rollers and scooters, under charges of setting minimum prices with resellers since 2010. The OCCP obtained evidence that resellers were disciplining themselves and complained to Spokey if some of them would sell below the fixed minimum prices. Similar proceedings were initiated against Fellowes Polska, a distributor of office equipment, such as shredders and binders.

In the years 2010 – 2017, Brother, a producer of printers, was imposing minimum resale prices upon online resellers. The OCCP imposed on Brother a fine of 0.3 million euro. The fine would have been 60% higher, had Brother not applied for leniency and voluntarily submitted to it.

The OCCP initiated proceedings against two wholesalers of protective masks who terminated agreements with hospitals, for the purpose to obtain higher prices as the demand was increasing because of the COVID-19 pandemia. The OCCP will check whether the wholesalers could have abused dominance or entered into a collusion. The OCCP has established a special infoline for hospital directors to report any similar unfair practices.

J. Sroczyński, Wirtschaft und Wettbewerb. Developments in national competition law, No. 6/2020.