Facts
OCCP assessment
Fine
The Office for Competition and Consumer Protection (OCCP) recently issued a decision in which it concluded that the Association of Polish Centres for Infertility Treatment and Reproduction Development had:
- entered into an anti-competitive agreement; and
- violated Article 6 of the Competition Act (the equivalent of Article 101 of the Treaty on the Functioning of the European Union).
According to the OCCP, the association had fixed prices which were offered by its members in competitions organised by the Ministry of Health in April 2013 and March 2014 to select companies to run the government's infertility treatment programme.
The Association of Polish Centres for Infertility Treatment and Reproduction Development groups together companies that are active in the infertility treatment field. In April 2013 and March 2014 the Ministry of Health launched a competition and called for tenders to realise an infertility treatment programme. In both competitions, the majority of the bidders were members of the association, which made 25 of the 37 offers in the first competition and 27 of the 40 offers in the second.
Based on the evidence collected by officials during a dawn raid, the OCCP concluded that the association had sent a number of emails to its members regarding a pricing policy for both competitions. The price to which bidders should have adhered had also been discussed during official meetings organised by the association.
As a result, almost all offers made by the members of the association had contained the same price for a treatment cycle, which was either the maximum price accepted by the Ministry of Health (PLN7,510) or an amount close to it (PLN7,500).
During the antitrust proceedings, the association explained that the price recommendations that it had made and forwarded to its members had not been binding, and that the idea behind them had been to avoid setting prices below costs for association members.
The OCCP explained that because the association was an organisation of undertakings, it was subject to antitrust law prohibitions. Therefore, the OCCP clarified that:
- the non-binding recommendations and guidelines of an organisation of undertakings can be considered to constitute an agreement, even if there are no penalties for non-compliance; and
- such coordination of behaviour can affect market competition.
According to the OCCP, the association had executed a price-fixing agreement to coordinate the prices offered by its members in the abovementioned competitions. The OCCP concluded that the association had aimed to persuade bidders to offer the maximum price accepted by the Ministry of Health.
In the OCCP's opinion, the agreement between members of the association amounted to restrictions of competition by object. Further, the OCCP argued that this behaviour had aimed to harmonise market prices, and that such practices are anti-competitive by their nature.
Further, the OCCP stated in its decision that the agreement had harmed competition in the relevant market. The association's practice had resulted in its members not setting prices offered in competitions independently and instead following the association's recommendations in this respect. As a result, association members had not competed with each other on price, but had instead set prices at the maximum level accepted by the Ministry of Health (or close to it).
The OCCP imposed a fine of PLN13,211 (approximately €3,060) on the association. The fine reflects the fact that price-fixing agreements are regarded as serious infringements of competition law. The OCCP also stressed that the practice had had a harmful effect on the state's budget, as the fertility treatment programme had been financed by the Ministry of Health.
Conversely, the OCCP also considered that:
- the practice had lasted less than one year; and
- it had been the association's first breach of competition regulations.
For further information on this topic please contact Katarzyna Terlecka or Pawel Kulak at Schoenherr Attorneys at Law by telephone (+48 22 223 09 00) or email ([email protected] or [email protected]). The Schoenherr website can be accessed at www.schoenherr.eu.