J. Sroczyński for WuW No. 3/2021 – Record fines imposed on entities involved in the Nord Stream 2 project

The President of the Office of Competition and Consumer Protection (“OCCP”) imposed maximum fines (10% of turnover) on Gazprom and the other five companies participating in the Nord Stream 2 project. The OCCP also decided that the financing agreements concluded between the Nord Stream 2 parties should be terminated. The OCCP’s decision is a result of the proceedings lasting several years. In 2015, the parties notified in Poland the creation of a joint venture to build and operate the Nord Stream 2 gas pipeline from Russia to Germany. When the OCCP issued competition concerns, clearly indicating that the joint venture will be prohibited, the parties withdrew the notification and subsequently concluded several financing agreements to continue the project. The OCCP opened an investigation and qualified the financing agreements as equivalent to a joint venture. Because the financial structure was not notified as a concentration, the OCCP issued the decision with fines and termination order. The fine imposed on Gazprom amounts to 6.5 billion euro and is the highest fine ever imposed by any world’s competition authority. The other fines amount to 12 million euro for Engie, 6.6 million for Uniper, 19.5 million for ÖMV, 6.7 million for Shell and 6.8 million for Wintershall. In a separate proceeding concerning a refusal to provide documents during the OCCP’s investigation, Gazprom was fined the maximum amount of 50 million euro and Engie 38 million. The OCCP’s decisions are not yet final and were appealed to the first instance court.

The Association of Marketing Communication (SAR) was investigated by the OCCP for distorting competition between its members, over 120 branding agencies, in tenders for various creative projects, such as posters or packaging designs. SAR induced the agencies not to participate in tenders which rules did not provide for a rejection fee to be paid to participants who submitted a design but were not accepted. SAR also organised common “tender rooms”, enabling the agencies to coordinate each other’s behaviour in tenders and limiting the number of participants to only five. In order to eliminate the anticompetitive practices and their effects, SAR proposed to the OCCP a number of commitments which were accepted.

The OCCP imposed a fine of 110 thousand euro on Yamaha Music Europe for fixing, during the last 13 years, the minimum resale prices of musical instruments sold by its distributors in Polish online shops. The fine includes a 50% reduction due to leniency filed by Yamaha Music Europe and was further reduced by 10% under a settlement with the OCCP.

The OCCP opened a preliminary investigation on the market for medical oxygen supplied to hospitals, under suspicion of anticompetitive practices. The Polish market for medical gases is highly concentrated. Four players (Linde, Air Products, Messer and Air Liquide) have over 90% of that market. The OCCP is inspecting signals from hospitals concerning problems with supplies of medical oxygen, the demand for which has increased due to its use in curing illnesses caused by COVID-19.

The OCCP dawn raided four pharma distributors and two suppliers of software applied in the wholesale of medicines, under suspicion of enabling the exchange of sensitive price information. According to the OCCP, the software’s functionality enabled distributors to observe each other’s pricing decisions,  leading to price stabilization or increase, to the detriment of competition.

The OCCP issued a prohibition decision to PGNiG Termika and Veolia, under charges of dividing the heating market in Warsaw and participating in price and tender collusions. Veolia agreed with PGNiG Termika not to build a new heating plant, in exchange for the promise of PGNiG Termika not to develop sales to final customers. Both companies were also coordinating supply tenders and structure of tariffs for heat. While PGNiG Termika and its manager avoided fines due to leniency, Veolia received fines of 26 million euro and its manager 45 thousand euro. The fine imposed on the manager is the first in Poland and equals to 10% of the maximum level of 2 million PLN.

J. Sroczyński, Wirtschaft und Wettbewerb. Developments in national competition law, No. 3/2021.