J. Sroczyński for WuW No. 3/2011 – OCCP’s approval for the takeover of a steelworks. Heavy fine for a mobile phone operator
The President of the Office of Competition and Consumer Protection (“OCCP”) conditionally approved an acquisition of control over Łabędy Steelworks by Kompania Węglowa, a holding of coal mines. Łabędy Steelworks is a major producer of steel casings mounted on pathways in coal mines. Both companies are owned by the Polish State Treasury. The President of the OCCP has established that the notified concentration could lead to significant impediment of effective competition on the Polish market of steel casings and accessories. The target and the buyer are, respectively, the largest supplier and purchaser of the relevant products. The OCCP identified a risk of market foreclosure, should the post-concentration status be petrified over a prolonged period of time. The OCCP has found that significant entry barriers would prevent imports and hinder potential new investments. On the long run, the transaction could thus lead to price increases and lack of sufficient supplies.
In light of those findings, the OCCP imposed a condition obligating Kompania Węglowa to divest Łabędy Steelworks within two years. The controlling stake should be sold to an independent investor. Furthermore, Kompania Węglowa was obligated not to decrease the production capacities of the relevant products of Łabędy Steelworks below 80% of the current level.
Both conditions, convergent with the business plans of Kompania Węglowa, were accepted and thus the OCCP’s decision has become final.
The President of the OCCP approved a joint acquisition by the Warsaw Stock Exchange, the National Depository for Securities and WSEInfoEngine of selected assets of Elbis, a group company of the largest Polish energy producer, PGE. The acquired assets constitute an Internet Based Electricity Trading Platform, used for exchange transactions in electric energy, carbon dioxide emissions and trading in biomass. The acquisition opens up new opportunities for the Warsaw Stock Exchange to engage in dealing transactions on new markets. The acquisition is also intended to develop so-called market coupling transactions, consisting in dealing in energy production capacities of two Member States or on a regional EU level.
The OCCP issued another set of soft law, i.e., new merger guidelines, which replace the old guidelines and take into account new merger control regulations, enacted in 2007. The new merger guidelines exhaustively address a number of important issues, which usually accompany merger notification analyses. The guidelines offer interpretation of such issues, as calculation of turnover in joint venture groups, effect principle, deadlines, early implementation, remedies, etc. The new guidelines will be published in the Official Journal of the OCCP.
A mobile telephony operator, PTC, was dawn-raided by the OCCP, under suspicion of concluding anticompetitive agreements. When the officials, assisted by the Police, arrived at the premises of PTC with the search warrant issued by the Court of Competition and Consumer Protection, they were not admitted to any office rooms but had to wait at the reception for nearly one hour. According to the applicable regulation on inspections carried out by the OCCP, upon presentation of the court warrant, an undertaking must grant immediate access to all its premises and objects, including documents, hard discs, etc. The OCCP qualified PTC’s behavior as willful hindering of the inspection and issued a decision, imposing a fine in the amount of 123 million zlotys (over 30 million Euro). The OCCP ruled that the delayed commencing of the inspection could affect its results, since PTC was able in the meantime to destroy the aggravating evidence. The OCCP stressed the key role of surprise effect during dawn raids, which is to minimize a risk of destruction of evidence or coordination of testimonies. The OCCP’s decision is not final and was appealed by PTC.
