J. Sroczyński for WuW No. 12/2014 – Publication of the amendment to the Act on the Protection of Competition and Consumers in the Journal of Laws
The amended Law on the Protection of Competition and Consumers has been published in the Journal of Laws, which determines its date of entry into force as of January 18, 2015. The extensive amendment includes an introduction of remedies which can be imposed in decisions prohibiting anticompetitive arrangements and abuses of dominant market position. The remedies may include an obligation to change the agreement, grant a license, provide continued supplies, an access to the essential facility, or an obligation to specifically differentiate activities within a vertically integrated entity. In the area of merger control, the amendment provides for a two-phase proceedings, the first phase lasting one month, the second phase, destined for cases which raise competition concerns, lasting for an additional four month period. The amendment will introduce numerous procedural changes, including a prolongation of the statute of limitation to five years from the current one year, the new institution of settlement with the authority (in exchange for a ten percent maximum reduction of fine), an extension of the leniency benefits to additional anticompetitive arrangements (so-called leniency plus), various changes in the provisions concerning dawn raids and a list of the aggravating and mitigating circumstances, taken into account when fines are imposed by the authority. Concerning fines, for the first time individuals will become subject to financial liability for concluding anticompetitive arrangements. A fine imposed on a manager guilty of a cartel activity may reach 500 thousand euro.
Polska Grupa Zbrojeniowa (The Polish Armament Group), a company controlled by the State Treasury, has secured a consent of the President of the Office of Competition and Consumer Protection (“OCCP”) to assume control over eight companies from the defense sector. The takeover is a final step in the reorganization of the Polish defense sector by the Polish Government. The adopted strategy was to consolidate the designing, production and servicing of arms into one holding group. In the past, the OCCP has given clearance to other takeovers of the military companies by state-controlled holdings. The OCCP has examined the competitive effects of the notified transaction and did not disclose any significant limitations of competition. This is due to the fact that most of the companies subject to the takeover are not competitors and their only purchaser is the Ministry of the National Defense. In turn, the Ministry is obligated to purchase military equipment through public tenders, in which strong foreign players also submit bids. The new holding will thus face competition from those other bidders.
KDWT, a company from the Eurocash Group, has obtained a conditional clearance of the President of the OCCP for an acquisition of eleven tobacco warehouses from Kolporter. The consent was granted on the condition of excluding one warehouse from the scope of the planned transaction. This approach of the OCCP is quite novel, since in the conditional merger decision issued so far, the authority was imposing only post-transaction obligations to divest certain assets or shares. In turn, the OCCP has confirmed the hitherto applied market definition, which excludes non-specialized warehouses and the cash-and-carry sector from the relevant product market. Only those warehouses, which achieve a majority of their turnover from the sale of tobacco products, were qualified as competitors. The relevant geographical market was defined as a radius of fifty kilometer drive by car from a given warehouse. The OCCP has established that within such radius the tobacco warehouses generate most of their profits. Accordingly, the test of significant limitation of effective competition has proved positive in the area of Sosnowiec and the warehouse located in that town was excluded from the acquisition by KDTW. The decision is the 21st conditional merger decision issued by the President of the OCCP since 2004 and the fourth such decision issued in 2014.
J. Sroczyński, Wirtschaft und Wettbewerb. Developments in national competition law, No. 12/2014.
