Traple Konarski Podrecki & Partners | View firm profile
The President of the Office for Competition and Consumer Protection (UOKiK) announced the imposition of fines amounting to more than PLN 37 million for alleged price collusion and market sharing. The importer of a well-known brand of electronic monitoring equipment, several of its distributors, and seven managers were sanctioned. The importer itself has been fined just over PLN 22 million. While this is not the highest fine imposed by the competition authority in an antitrust case in recent years, it will probably prompt many businesses to take a closer look at their policies for working with entities in their distribution network.
The President of UOKiK challenged two practices adopted by the undertakings. Firstly, the importer allegedly agreed resale prices with the distributors, imposing minimum prices and maximum discounts they could apply. What is more, the authority stated in a communication that fixed prices were also imposed by the importer on the distributors in the case of promotions organised by the importer. Furthermore, the distributors allegedly asked the importer to intervene when any of them undercut the agreed prices. This sounds like a classic example of vertical restrictions.
The second practice is yet another story. According to a succinct press release (the statement of reasons for the decision has not been published yet) the importer allegedly would grant a higher discount and “project’s protection” to the distributor who was the first to report a transaction above a certain value threshold for the installation of products. Unfortunately, there are no details as to how this “project’s protection” was supposed to work. The President of UOKiK pointed to the result, i.e. another distributor allegedly being prevented from presenting a competitive offer in a given case.
This decision of the President of UOKiK is in line with the authority’s previous actions – combating anticompetitive vertical agreements and resale price maintenance within distribution networks remain a priority for the authority. Moreover, managers’ liability and fines have now become a common tool in the hands of the authority. Therefore, undertakings should exercise the utmost diligence to prevent wrongdoing occurring in their organisations. Indeed, certain procedures or rules of cooperation with distributors may, on closer inspection, prove to be risky in terms of antitrust exposure.
Author: Katarzyna Menszig-Wiese