J. Sroczyński for WuW No. 6/2009 – OCCP’s guidelines on fines for practices infringing the collective consumer interests

On March 2, 2009, the Polish competition regulator, OCCP, has launched its first guidelines on fining policies applicable to practices violating the collective consumer interests. The prohibited practices include the application of the registered, illegal contractual clauses, the misinformation of consumers and unfair business practices or acts of unfair competition. Under the Polish Antimonopoly Law, the President of the OCCP has the power to issue administrative decisions in favour of harmed consumer groups and impose fines on violators in the same maximum amount as imposed for 81- and 82-type offences, i.e., up to 10% of the annual turnover.

In fixing the amount of the fine, the OCCP should first establish the so-called base amount. The violation will be “weighed” for its significance to consumers, depending on whether it was committed prior to conclusion of the contract (from 0.02% to 0.3% of turnover), in the process of conclusion of the contract (from 0.05% to 0.6% of turnover) or during the performance of the contract (from 0.1% to 0.7% of turnover). The application of the registered illegal clauses will be valued from 0.02% to 0.1% per each clause, capped by 0.6% of turnover.

The base amount can be increased or decreased, based on aggravating or mitigating circumstances, respectively. The aggravating circumstances include intentional and repeated violations, sizeable benefits for violators and large territorial scope. The base amount can be accordingly increased, even twice, where the aggravating circumstances cumulate. The mitigating circumstances include ceasing of the prohibited practice, active cooperation with the OCCP, and voluntary compensation of damages incurred by the consumers. The resulting decrease of base amount can range from 10% to 30%. The fines can be also increased based on extraordinary criteria, such as exceptional harm or multiple repetition, provided the final amount does not exceed the statutory 10% turnover.

The guidelines do not constitute a formal body of law but will be applied “one-sided” by the regulator in calculating the actual amounts of fines. Undertakings may thus enjoy more certainty and transparency as to the expectation of financial sanctions for prohibited practices.

J. Sroczyński, Wirtschaft und Wettbewerb. Developments in national competition law, No. 6/2009.