J. Sroczyński for WuW No. 12/2013 – Heavy fine for a undertaking operating in the waste management sector

The President of the Office of Competition and Consumer Protection (the “OCCP”) issued a precedential decision concerning the recently reorganized Polish market of waste management. Since January 2012, this market is subject to a statutory regulation which has introduced a system of local monopolies of undertakings authorized by the municipal authorities to offer waste management services. Priorly, these services could be performed by all interested undertakings on a fully competitive basis. The OCCP was always highly critical about the new law, pointing out to its negative effect for competition and finally for consumers. In effect of complaints by customers of Chemeko-System, a local monopolist in the Wrocław region, the OCCP initiated the antimonopoly proceedings, issued a decision confirming an abuse of dominance and fined Chemeko-System 100,000 euro. The OCCP qualified as excessive pricing an increase by 115% of Chemeko-System’s prices charged for waste storage and processing. The OCCP prohibited the abuse, having found that the price increase was unjustified, placing Chemeko-System 40% above the pricing level applied by comparable operators in other parts of Poland. The decision must be immediately enforced by Chemeko-System. The OCCP initiated almost 30 other proceedings screening the waste management market for compliance of its players with the rules of competition.

The OCCP prohibited the National Chamber of Town Planners from imposing the minimum levels of prices to be charged by town planners for their services. The Chamber is a professional organization which membership by qualified town planers is compulsory and which can apply restrictive measures against its members for a violation of the code of ethics and other common rules. The OCCP challenged the provisions of the code and the resolutions of the Chamber, insofar as they obliged town planners not to decrease their prices by more than 25% of the officially approved rates. The OCCP qualified such conduct as the fixing of minimum prices and imposed a fine on the Chamber in the amount of 11,000 euro.  

The OCCP approved a takeover by Burda International of several companies belonging to the Bertelsmann Group, all active on the Polish media market. The OCCP has established that a significant increase of post-merger market shares would occur in the segment of cookery magazines, which was defined as a distinct relevant market. However, the OCCP has taken into account the fact that entry barriers to that market are quite low. Besides, vast amount of cookery recipes is available in the Internet. Accordingly, the merger was unconditionally cleared.

J. Sroczyński, Wirtschaft und Wettbewerb. Developments in national competition law, No. 12/2013.