Competition law in Poland: businesses should be aware about new guidelines on penalties for competition law infringements

If you’re a small business owner in Poland, you should not worry too much about the new guidelines issues on 9 April 2024 by the Polish Office of Competition and Consumer Protection (UOKiK) on penalties for competition law infringements. This does not apply to you.
 
However, if you’re a part of the capital group operating in Poland, you should be aware about these new guidelines on penalties because it could be about you. Competition law is not only a concern for big companies - smaller firms and even charities have been among the recent targets of antitrust authorities in Europe.
 
Based on the new guidelines (which will apply to cases initiated after 1 January 2024) penalties for competition law infringements could reach in practice the maximum level of up to 10% of worldwide turnover of the entire capital group. Moreover, the directors of a parent company can also obtain a severe penalty.
 
What matters will be covered by the new guidelines on penalties?
 
The new guidelines on penalties for competition law infringements will cover matters regarding agreements restricting competition and matters regarding the abuses of the dominant position. The new rules will not cover merger control issues, practices infringing the collective consumer interests or abusive clauses.
 
Are you a part of the capital group? Be aware of responsibility
 
Up until May 2023, entrepreneurs who directly infringed the anti-competitive prohibitions in Poland could be given a fine of up to 10 per cent of their turnover in the financial year preceding that in which the fine was imposed. Additionally, penalties of up to PLN 2 m could have been imposed on managers who intentionally allowed an entrepreneur to infringe such prohibitions.
 
This was changed in May 2023 and the liability of parent companies for anti-competitive practices was added. Under the current rules, in cases where a company (i.e. a direct infringer) infringes on the prohibition on competition-restricting practices, an infringement is also considered to be committed by an economic entity that exercises a decisive influence on company. A decisive influence is deemed to be exercised if the economic entity that exercises the decisive influence holds more than 90% of the share capital of that company.
 
The legislation, however, does not provide detailed rules for calculating penalties imposed on more than one company within the same group where the liability of the parent company is based only on the fact that it exercised a decisive influence. The UOKiK’s previous guidelines on penalties for competition law infringements also did not provide guidance on how the office would calculate penalties in such a situation.
 
How will UOKiK impose a penalty on a capital group?
 
It seems that the UOKiK will tend to carry out proceedings only against one company (i.e. against the direct infringer) but a fine to be imposed will be a combined fine taking into account a company that has directly infringed competition law and a parent company. This does not mean, however, that the UOKiK rules out the possibility of imposing more than one penalty. The authority has stated that “if the context of a particular case gives rise to the imposition of two or more fines rather than a combined fine, the President of the Office will inform the parties of this before issuing the decision”. There is no clarity as to what this situation might be. It is possible that the UOKiK would consider imposing more than one penalty in a situation where two group companies have an independent stand-alone role in a competition law infringement.

As regards the amount of the penalty, the UOKiK will take into account the relevant turnover i.e. the turnover of a company or companies directly involved in the infringement in the last calendar year of the infringement period. However, the turnover of the entire group will be taken into account when calculating the maximum penalty that can be imposed (i.e. 10% of the turnover achieved in the financial year preceding the year when the fine is imposed).
 
In addition, both the management of the parent company and of the direct infringer in Poland can be held liable for infringements of competition law. The UOKIK can impose fines of up to PLN 2 m for intentionally allowing an infringement of competition law to be committed.
 
What do the new guidelines mean in practice?
 
For many years now, a visible trend in the UOKiK’s decisions has been to increase the amount of fines imposed on economic operators. The new guidelines are undoubtedly part of this trend.
 
The new guidelines are particularly relevant for capital groups whose liability for an infringement often arises from their control over a company infringing competition law rather than from direct participation in the infringement through more than one company in the group. The maximum penalty that can be imposed under the new rules is up to 10% of the group’s worldwide turnover.
 
It is now vital for every manager to have a working knowledge of the competition law and be aware of the consequences, especially if the business has a dominant position on the relevant market.