Proceedings before the President of the Office of Competition and Consumer Protection (UOKiK) – what is worth knowing?

The President of the Office of Competition and Consumer Protection – Powers

I would like to begin this article with a brief introduction to the matters dealt with by the Office, in accordance with the Act of 16 February 2007 on Competition and Consumer Protection (Journal of Laws of 2024, item 1616. hereinafter referred to as the “Act”), the Office of Competition and Consumer Protection (UOKiK) and its President.

We most often hear about the President of the UOKiK in connection with high-profile media cases and multi-million-zloty fines imposed, for example, on entities involved in retail trade. These usually generate the most controversy and interest, as they touch upon matters close to everyone’s heart and part of everyday life; it is no wonder, then, that they attract the public’s attention.

However, this is not the sole remit of one of the most important authorities operating in Poland. Article 29(1) of the Act, found in Section V: Organisation of Competition and Consumer Protection, states that the President of the Office is the central government body responsible for matters relating to competition and consumer protection. The President’s duties are set out in Article 31 of the Act, the most important of which are:

• monitoring compliance by undertakings with the provisions of the Act;
• issuing decisions on practices restricting competition, on concentrations of undertakings, on the declaration of standard contract terms as unlawful, and on practices infringing the collective interests of consumers, as well as other decisions provided for in the Act;
• conducting research into the state of economic concentration and the market behaviour of undertakings;
• preparing draft government programmes for the development of competition and draft government consumer policy;
• cooperating with national and international bodies and organisations whose remit includes the protection of competition and consumers;
• performing tasks relating to the designation of authorised entities entitled to bring actions in national collective proceedings and cross-border collective proceedings, maintaining a register and transmitting data covered by the register to the European Commission;
• performing the tasks and exercising the powers of a competition authority of a Member State of the European Union, as set out in Regulation (EC) No 1/2003 and Regulation (EC) No 139/2004;
• performing the tasks and exercising the powers of the competent authority and the single liaison office of a Member State of the European Union, as set out in Regulation No 2017/2394;
• performing the tasks set out in the Act of 23 September 2016 on the out-of-court resolution of consumer disputes (Journal of Laws, item 1823);
• performing the tasks of the responsible authority within the meaning of Article 7(1) of Regulation 2018/302 in relation to combating practices restricting competition and practices infringing the collective interests of consumers; drafting and submitting to the Council of Ministers draft legislation concerning competition and consumer protection;
• addressing undertakings on matters relating to competition and consumer protection;
• collecting and disseminating case law on matters relating to competition and consumer protection, in particular by publishing the President of the Office’s decisions on the Office’s website;

As can be seen, the scope of these powers, excluding a few that are not relevant to this article, is very extensive. Moreover, some of them actually encompass a range of other activities or proceedings. In particular, this concerns activities related to the issuance of decisions referred to in point 2 above, and it is on these that I would like to focus.

Proceedings before the President of the Office of Competition and Consumer Protection

The President of the Office conducts a range of proceedings resulting in the issuance of decisions. In accordance with the Act, the authority’s jurisdiction covers the following categories of cases:

• cases concerning practices restricting competition;
• cases concerning concentrations of undertakings;
• cases concerning the declaration of standard contract terms as unlawful;
• cases concerning practices infringing the collective interests of consumers.

Each of these proceedings differs in its course, and the powers of the parties involved also vary. For the sake of clarity, we will discuss them in turn, highlighting their key features and setting out the powers available to the parties involved.

Proceedings concerning practices restricting competition

In cases concerning practices restricting competition, the President of the Office conducts two types of administrative proceedings:

• an investigation;

as part of this procedure, initiated where there is a suspicion that competition rules may have been breached, the authority conducts activities ‘in the matter’, and thus not against specific entities. The authority does not formulate allegations against undertakings or their managers. There are also no parties in preliminary investigations, and undertakings do not have the right to inspect the case file.

As part of these proceedings, the Office of Competition and Consumer Protection (UOKiK) may issue requests to undertakings to provide documents and information. Such requests may also be issued to natural persons who are not undertakings, legal persons, and organisational units that are not legal persons but to which separate provisions confer legal capacity.

The Office may also decide to carry out an inspection or search of the business’s premises and property.

If the evidence gathered confirms the UOKiK’s suspicions, this may result in the initiation of a second set of proceedings:

• antitrust proceedings concerning practices restricting competition

These are conducted in connection with an alleged breach of competition law. They may be initiated against undertakings, trade unions and, in certain cases, also against the person or persons managing the undertaking. The entity against which proceedings are being conducted is a party to the proceedings within the meaning of the Code of Administrative Procedure and enjoys the rights to which it is entitled. This means the right to inspect the case file, to present evidence relevant to the examination of the case, and to present its position.

As I have already explained, the Office of Competition and Consumer Protection (UOKiK) may, both within the framework of ongoing proceedings and independently of them, obtain information from businesses that constitutes trade secrets. Furthermore, it may include documents in its possession (and thus those constituting trade secrets) as evidence in the proceedings in question.

What can an entrepreneur who wishes to preserve trade secrets do about this? First and foremost, they may submit a request to restrict the parties’ right of access to information contained in the documents, if such information constitutes trade secrets. Where there is more than one party to the proceedings, each may request that the information they provide be protected from disclosure to the other parties.

Once the proceedings have been concluded, the President of the Office of Competition and Consumer Protection (UOKiK) is obliged to issue a specific decision. This does not, however, mean that it is impossible to reach an agreement with the authority regarding its final form. The Act provides for two settlement-based solutions:

• voluntary acceptance of a penalty;

in this case, both the party to the proceedings and the UOKiK may propose voluntary acceptance of the penalty. As a result, the undertaking has the opportunity to reduce the financial penalty by 10 per cent compared to the penalty that would have been imposed had the party not participated in the procedure. The condition is that the business operator submits a declaration of voluntary acceptance of the penalty, confirms its amount (as determined by the President of the Office of Competition and Consumer Protection) and submits a declaration that they have been informed of the allegations and the opportunity to respond to them.

Furthermore, by voluntarily accepting the penalty, the business operator waives the right to appeal the decision to the administrative court, which brings the proceedings to a quicker and more efficient conclusion and also significantly reduces their costs.

• the issuance by the President of the Office of Competition and Consumer Protection (UOKiK) of a decision obliging the business to take specific actions;

if the business operator does not wish to voluntarily accept the penalty but at the same time wishes to avoid a decision imposing a penalty, the Act also provides for the possibility of approaching the President of the Office of Competition and Consumer Protection (UOKiK) at any stage of the proceedings with a proposal to take specific measures that will lead to the removal of the negative effects of the alleged anti-competitive practice.

If the proposal is accepted, the President of the Office for Competition and Consumer Protection issues a decision imposing specific conditions on the undertaking, which it has undertaken to fulfil. The primary benefit for the undertaking is that the practice alleged against it is not found to have been carried out and no financial penalty is imposed.

However, it is not always possible to take advantage of the second option. As a rule, the President of the Office for Competition and Consumer Protection does not issue a decision imposing obligations in cases involving allegations of the most serious agreements restricting competition. In such cases, the only option available to the undertaking is to voluntarily submit to a penalty or participate in a leniency programme.

Penalties for breaches of competition law

Except where a binding decision is issued (see above), if it is found that an undertaking has infringed competition law, the President of the Office for Competition and Consumer Protection (UOKiK) imposes a fine of up to 10 per cent of turnover, calculated in accordance with Article 106 of the Act.

In the case of managers, a penalty of up to PLN 2 million may be imposed for a breach of competition rules. This applies to both current and former employees (as well as persons employed under equivalent civil law contracts). They are liable solely for their own intentional acts or omissions which led to a breach of the prohibition on agreements restricting competition.

Managers, within the meaning of the Act, are natural persons managing an undertaking, in particular those performing managerial functions or forming part of the undertaking’s management body. These are persons holding the highest positions within the undertaking’s organisational structure, who influence its market conduct.

Merger control

Another category of cases dealt with by the President of the Office of Competition and Consumer Protection (UOKiK) concerns business concentrations. One of the Authority’s primary objectives is to prevent the creation of monopolies that would lead to a significant restriction of competition in the market.

For this reason, actions by undertakings involving mergers, the acquisition of control, the acquisition of an organised part of assets, and the creation of a new undertaking are subject to control by the Authority in order to prevent excessive consolidation, leading to a significant restriction of competition in the market, in particular through the acquisition or strengthening of a dominant position.

Which transactions are subject to review by the President of the Office of Competition and Consumer Protection (UOKiK)?

Not every action by economic operators relating to the aforementioned merger, acquisition of control, acquisition of an organised part of an undertaking or establishment of a new undertaking is subject to the control of the President of the Office of Competition and Consumer Protection (UOKiK). Under the Act, transactions must be notified to the Authority if the combined worldwide turnover of the undertakings involved in the concentration in the year preceding the year of notification exceeds EUR 1 billion, or if the combined turnover of those undertakings in Poland in the financial year preceding the year of notification exceeds the equivalent of EUR 50 million.

It should be clarified here that, pursuant to Article 13(2) of the Act, the notification obligation applies to a concentration defined as:

• the merger of two or more independent undertakings;
• the acquisition of undertakings – through the purchase or subscription of shares, other securities, or in any other manner – of direct or indirect control over one or more undertakings by one or more undertakings;
• the establishment of a joint venture by undertakings;
• the acquisition by an undertaking of part of another undertaking’s assets (the whole or part of the undertaking), if the turnover generated by those assets in any of the two financial years preceding the notification exceeded the equivalent of EUR 10 million within the territory of the Republic of Poland.

The Act also sets out a list of transactions which, due to their potentially minor impact on the market, are exempt from the notification requirement. These include, amongst others, the following situations:

• where the turnover of the undertaking over which control is to be acquired, in accordance with Article 13(2)(2) of the Act, did not exceed the equivalent of EUR 10,000,000 within the territory of the Republic of Poland in either of the two financial years preceding the notification;
• involving the temporary acquisition or subscription of shares by an undertaking for the purpose of securing a claim, provided that it does not exercise the rights attached to those shares, with the exception of the right to sell them;
• taking place in the course of insolvency proceedings, excluding cases where the party intending to take control or acquiring part of the assets is a competitor or belongs to a capital group to which competitors of the undertaking being taken over or of which part of the assets are being acquired belong.

The President of the Office of Competition and Consumer Protection (UOKiK) grants consent to a concentration if, as a result, competition on the market is not significantly restricted. Consideration is given to whether the concentration will lead to the creation or strengthening of a dominant position of an undertaking.

However, if the Authority concludes that the concentration may result in a significant restriction of competition in the market, it issues a decision prohibiting the merger. It is also possible that the Authority will grant authorisation for the concentration subject to certain conditions – e.g. the sale of part of the assets.

Furthermore, the Act permits the granting of authorisation for a concentration leading to a restriction of competition if it contributes to economic development or technical progress, or may have a positive impact on the national economy.

If a concentration is carried out without the consent of the President of the Office of Competition and Consumer Protection (UOKiK), he may take measures to restore effective competition – for example, by ordering the division of the undertaking or the sale of part of the shares, and may also impose a financial penalty of up to 10 per cent of the previous year’s turnover on the parties involved. If you have further questions regarding, amongst other things, the Office of Competition and Consumer Protection, please contact HWW Hewelt Wojnowski Lindner i Wspólnicy.