Legislation and jurisdiction

Relevant legislation and regulators

What is the relevant legislation and who enforces it?

The basic act regulating merger control in Poland is the Act of 16 February 2007 on competition and consumer protection (the Act). Other major legislation on this issue includes:

  • the Regulation of the Council of Ministers of 23 December 2014 concerning the notification of the intention of concentration of undertakings (establishing, inter alia, the official filing form); and
  • the Regulation of the Council of Ministers of 23 December 2014 concerning the method of calculation of the turnover of undertakings participating in the concentration.

Although not legally binding, there is another regulatory instrument worth mentioning because of its considerable practical significance, namely the Guidelines on the criteria and procedure of notifying the intention of concentration to the OCCP (the Guidelines), which were issued by the Polish competition authority, the Office for Competition and Consumer Protection (OCCP). The aim of the Guidelines is to help entrepreneurs assess how the OCCP generally understands procedural aspects of the Act. Additionally, the authority also published Clarifications concerning the assessment by the OCCP of the notified concentrations on its website. These Clarifications provide a discussion and explanation of the substantive aspects taken into account in the framework of the assessment of concentrations carried out by the Polish competition authority.

In Poland, the OCCP is the sole authority responsible for the enforcement of competition rules, including merger control.

Scope of legislation

What kinds of mergers are caught?

The following types of transactions are subject to the notification obligation:

  • a merger of two or more independent undertakings;
  • one or more undertakings to take direct or indirect control over one or more undertakings, whether by acquisition of stocks, shares or other securities, or otherwise;
  • several undertakings to create one joint undertaking; and
  • acquisition by the undertaking, of a part of another undertaking’s property, if the turnover generated by the assets in any of the two financial years preceding the notification exceeded the equivalent of €10 million on Polish territory.

What types of joint ventures are caught?

There were some doubts as to whether the notification requirement should also extend to a situation where one undertaking first creates another undertaking and then disposes its shares to others. The Guidelines and case law (Decision No. DKK-104/10 of 10 November 2010, PGNiG/Tauron) confirm that such a scenario requires notification. However, there is no such certainty with regard to the treatment of situations where a company exists on the market for some time and then a new shareholder acquires a minority interest (which does not give control over the company). The Guidelines seem to suggest that such a situation also needs to be notified. However, it is difficult to agree with this approach (it should be mentioned here that the acquisition of a minority interest was removed from the list of concentration types several years ago). It may be thus assumed that a situation where one undertaking creates a joint venture and then transfers it to another party shall be notifiable when this is in fact one functionally linked process of creation of a new undertaking, albeit divided into stages and not a situation where a minority stake in an already running business is acquired.

Is there a definition of ‘control’ and are minority and other interests less than control caught?

The Act defines ‘takeover of control’ as a situation where an undertaking acquires in any form, whether directly or indirectly, such rights which, whether individually or jointly and taking into account all legal or factual circumstances, allow it to exercise a decisive influence upon another undertaking or other undertakings; in particular, such powers are created by:

  • holding directly or indirectly a majority of votes at the shareholders’ meeting or general meeting of shareholders, also in the capacity of a pledgee or user, or on the management board of another undertaking, also under agreements with other persons;
  • the right to appoint or dismiss a majority of members of the management board or supervisory board of another undertaking, also under agreements with other persons;
  • appointing members of one undertaking’s management board or supervisory board to form more than half of the members of another undertaking’s management board;
  • holding, directly or indirectly, a majority of votes in a dependent partnership or at the general meeting of a dependent cooperative, also under agreements with other persons;
  • the ownership of all or some of the assets of another undertaking; or
  • an agreement for the management of another undertaking or transfer of profit by such undertaking.

It is worth noting that the above is not a close-ended list.

The Act does not provide for an obligation to notify a concentration where the acquisition involved is that of a minority or other interests that does not result in a takeover of control. Nevertheless, acquisition of control may also take place in case of some factual circumstances that eventually lead to takeover of control (eg, possession of a substantial package of shares, not giving the right to more than 50 per cent of votes in the bodies of another undertaking, but for example to 40 per cent of votes with the significant fragmentation of votes of other partners).

Thresholds, triggers and approvals

What are the jurisdictional thresholds for notification and are there circumstances in which transactions falling below these thresholds may be investigated?

An intention of concentration is notifiable where:

  • the combined worldwide turnover of undertakings participating in the concentration in the financial year preceding the year of the notification exceeds the equivalent of €1 billion; or
  • the combined turnover of undertakings participating in the concentration in the territory of Poland in the financial year preceding the year of the notification exceeds the equivalent of €50 million.

The turnover of an undertaking that is jointly controlled by any member from the capital group of a party to the concentration will be attributed to such capital group in proportion to its interest in the jointly controlled undertaking.

In the case of acquisition of control, the turnover mentioned above relates to the turnover generated by the buyer’s group as well as to the turnover generated by the target and its subsidiaries. In the case of acquisition of property of another undertaking, the turnover mentioned above relates to the turnover generated by the buyer’s group as well as to the turnover generated by the acquired property.

It is also important to point out that in the case of separate concentrations occurring between the same groups of undertakings taking place within a period of two years, the turnover figures of the acquired targets have to be added together. This is meant to prevent undertakings from circumventing the obligation to notify by splitting a larger transaction into smaller parts that would not qualify for the notification if considered separately.

Apart from the aforementioned, there are no other thresholds (eg, related to market shares of the participants). This means that even those transactions that have de minimis impact on competition on the relevant markets are caught by the merger control regime, if only at least one of the thresholds is met. There are, however, exemptions from this general rule.

Is the filing mandatory or voluntary? If mandatory, do any exceptions exist?

Under the Act, filing is mandatory when the jurisdictional thresholds are met and no exemptions from the notification obligation apply. The obligation to notify an intention of concentration does not apply in the following cases:

  • the turnover generated by the undertaking over which the control is to be taken (the target undertaking and its subsidiaries) in the territory of Poland did not exceed the equivalent of €10 million in any of the two financial years preceding the notification;
  • the turnover of none of the undertakings taking part in a merger or founding a joint venture exceeded in the territory of Poland €10 million in each of the two financial years preceding the transaction;
  • where control is taken over an undertaking or a group of undertakings belonging to the same capital group and simultaneously a part of the assets of the undertaking or the group of undertakings belonging the capital group is acquired – if the turnover of the undertaking or undertakings to be taken over and the turnover generated by the part of assets to be acquired did not exceed in the territory of Poland €10 million in each of the two financial years preceding the transaction;
  • a financial institution, the normal activities of which include investing in stocks and shares of other undertakings, for its own account or for the account of others, acquires or takes over, on a temporary basis, stocks and shares with a view to reselling them provided that such resale takes place within one year from the date of the acquisition or taking over, and that:
  • this institution does not exercise the rights arising from these stocks or shares, except from the right to dividend; or
  • exercises these rights solely in order to prepare the resale of the entirety or part of the undertaking, its assets, or these stocks and shares;
  • an undertaking acquires or takes over, on a temporary basis, stocks and shares with a view to securing debts, provided that such undertaking does not exercise the rights arising from these stocks or shares, except from the right to sell;
  • the concentration arises as an effect of insolvency proceedings, excluding the cases where the control is to be taken over or the assets are to be acquired by a competitor or a participant of the capital group to which the competitors of the undertaking to be taken over or whose assets are to be acquired belong; and
  • the concentration applies to undertakings participating in the same capital group.

Do foreign-to-foreign mergers have to be notified and is there a local effects or nexus test?

There may be situations where foreign-to-foreign transactions will have to be notified to the OCCP. Under the Act, the notification obligation (even with respect to a transaction to be finalised outside the territory of Poland) exists where a concentration causes or may cause effects in the territory of Poland.

The Act is silent on what criteria are to be taken into account when assessing the effect. According to the Guidelines, it can be presumed that if at least one of the participants of the concentration (in practice, any member of the capital group to which the buyer or the seller belongs) generates any turnover in the territory of Poland, the local effects test is met and such transaction has to be notified to the OCCP.

The broad interpretation of the local ‘effect’ applied by the Polish competition authority may mean that, in the case of formation of joint ventures especially, many foreign-to-foreign concentrations will formally be caught by the Polish merger control rules. For example, if ‘A’ and ‘B’ intend to form a joint venture in the United States, and ‘A’ and ‘B’ have joint worldwide turnover in excess of €1 billion, it will be sufficient for the obligation to notify to arise if any of ‘A’ or ‘B’, or any entity from the capital group of ‘A’ or ‘B’, has any (even insignificant) turnover in Poland.

Are there also rules on foreign investment, special sectors or other relevant approvals?

No. There are no special rules with respect to foreign investment. However, there are special rules for financial institutions when it comes to calculation of turnover for threshold purposes. Moreover, according to other special legislation, transactions in sectors such as banking may require special approval from regulatory bodies other than the OCCP.

It is worth pointing out that on 30 September 2015 the Act on Control of Certain Investments (ACCI) entered into force. According to the ACCI, the Minister of Energy as well as the Prime Minister becomes another authority empowered to scrutinise mergers and acquisitions in Poland (the Control Body). The ACCI aims to create mechanisms to protect against hostile takeovers of companies operating in key sectors of the Polish economy. According to the ACCI, prior to the acquisition of shares of strategic companies (including the acquisition of proprietary interests in entities or their enterprises) the purchaser will need to notify the Control Body and get the required approval. The obligation to inform the Control Body is to apply to transactions involving the acquisition of at least a ‘material stake’ in companies doing business in the sectors that are deemed strategic for the Polish economy (ie, companies operating in the gas, power generation, chemical, petrochemical and defence sectors). Please note that because of an amendment that entered into force on 6 February 2016, the application scope of the ACCI covers also transactions undertaken by firms operating in the production of rhenium and the extraction and processing of metal ores used in the manufacture of explosives, weapons and ammunition as well as products and technologies intended for military or police purposes. Upon the receipt of the notification, the Control Body will assess the impact of a given acquisition on strategic sectors of the Polish economy. The ACCI provides for broad and general criteria for assessment (‘the market share of the entity in question’; ‘the scale of the business’, as well as the transaction’s potential to ‘upset public order or public security’). The Control Body has 90 days from the receipt of the notification or from the initiation of proceedings in a given case to decide whether or not to object. A decision is preceded by a non-binding recommendation presented to the Control Body by the Consultative Committee, an advisory body that involves representatives of relevant ministries and state authorities. As a rule, an objection made by the Control Body (as well as a transaction undertaken without prior notification) will result in rendering the acquisition null and void or in making it impossible to exercise rights attached to shares (except for the right to sell such shares) and in declaring the invalidity of resolutions adopted by the decision-making bodies of companies.

Notification and clearance timetable

Filing formalities

What are the deadlines for filing? Are there sanctions for not filing and are they applied in practice?

The Act does not provide for a specific deadline as such for the filing of the notification. The ‘intention of concentration’ has to be notified. It means that the notification has to be submitted before the concentration is implemented (ie, prior to closing). In other words, the parties to a concentration are obliged to refrain from implementing the transaction until (unconditional or conditional) clearance is obtained or a one-month waiting period elapses without the authority making its decision (the ‘guillotine effect’). However, it should be added that clearance by the mere passage of time is rather unlikely to occur.

It is worth noting that the Act provides for a worldwide bar on closing.

If an undertaking has implemented a concentration, even if unintentionally, without the OCCP’s clearance, the Act allows the OCCP to fine the undertaking by way of a decision, with a fine not to exceed 10 per cent of the turnover earned by the undertaking in the financial year preceding the year in which the fine is imposed.

Moreover, article 108 of the Act authorises fines on persons holding managerial positions or members of managing bodies of such undertakings if the persons or members have not notified an intention of concentration. The fine may be up to 50 times the average monthly remuneration in the business sector in Poland in the last month of the quarter preceding the day of issuance of a decision.

Additionally, the OCCP may revoke its decisions if they were based on misrepresentations for which the undertakings participating in the concentration were responsible or where undertakings did not comply with the conditions (remedies) specified by the OCCP. Once revoked, the decision may be re-adjudicated by the OCCP on the merits of the case.

If, in cases described above, the concentration is already implemented and restoration of the competition in the market is otherwise impossible, and if the intention to concentrate has not been notified, or if a concentration ban has not been respected, the OCCP may order such measures as division of the merged undertaking, disposal of the undertaking’s assets, disposal of stocks or shares conferring control, or dissolution of a jointly controlled company.

Sanctions were imposed, for example, in decision No. DKK-1/07 of 12 July 2007, where the OCCP fined Sobieski Trade 40,000 zlotys for failure to notify. In decision No. DKK-37/09 of 18 June 2009, the OCCP imposed a fine of 70,000 zlotys on Przedsiebiorstwo Panstwowe ‘Porty Lotnicze’ (the national airport operator) and the provincial government of the Subcarpathian Voivodeship, again, for failure to notify. Moreover, in 2012 the OCCP issued two decisions and in 2013 only one decision imposing fines for non-compliance with the obligation to notify the concentration. Among more recent cases please note two decisions from 2017: in decision No. DKK-86/2017 of 5 June, the grocery wholesaler Bać-Pol S.A. was fined of 527,000 zlotys for failure to notify of the takeover of a portion of assets of another company called Klementynka. The authority initiated proceedings against Bać-Pol after receiving information that one of its subsidiaries implemented a concentration without prior authorisation by the OCCP. In a second case the consumer eggs producer was obligated to pay 339,000 zlotys for failure to notify of its takeover of a portion of the assets of another company operating in the same relevant market (decision No. DKK-145/2017 of 19 September).

All fined undertakings were Polish-based companies. No penalties on individuals (management board members) were imposed.

Nevertheless, it should be noted that, to the best of our knowledge, there have been no cases so far in Poland where the focus of the OCCP was on actions of the undertaking concerned that could qualify as a ‘gun jumping’ (ie, a de facto implementation of the concentration prior to clearance). The only cases that have been made public are the cases where the concentration has been consumed (ie, the transaction has been closed or the joint venture has been formed and registered) prior to clearance. Moreover, such fines were imposed on undertakings that have notified a merger already, but their action was taken too late.

Which parties are responsible for filing and are filing fees required?

The intention of concentration should be notified by:

  • the merging undertakings jointly;
  • an undertaking taking over the control;
  • jointly all undertakings participating in the creation of a joint undertaking; or
  • an undertaking acquiring some of the assets of another undertaking.

The general rule is that the notification has to be submitted by the undertakings directly participating in the concentration. However, where a dominant undertaking implements a concentration through at least two dependent undertakings, the notification should be submitted by the dominant undertaking. Moreover, if the undertakings directly participating in the concentration include a corporate vehicle established only for the purpose of the transaction and to which the intent of concentration cannot be attributed, the notification can be submitted by the dominant undertaking with respect to such a corporate vehicle. However, in such a case the notifying party has to clearly indicate in the notification that the undertaking taking over control is a corporate vehicle only.

The fee to be paid for an application to initiate proceedings in concentration cases was raised on 1 January 2017 and currently amounts to 15,000 zlotys.

What are the waiting periods and does implementation of the transaction have to be suspended prior to clearance?

The undertakings whose intention of concentration is to be notified are under an obligation to refrain from implementing the concentration until the OCCP issues its decision or the time limit to issue the decision lapses. 

Pre-clearance closing

What are the possible sanctions involved in closing or integrating the activities of the merging businesses before clearance and are they applied in practice?

Under Polish merger control regime sanctions, closing before clearance is treated similarly as the failure to notify. As a result, the consequences for both types of infringements are the same (see question 9).

In practice, the OCCP rarely imposes fines for such infringements. In 2010 there was one decision imposing a fine on an undertaking for not notifying the intended concentration. In 2011, there were no cases of this kind. In 2012 there were two decisions and in 2013 only one such decision. In 2014 there was also only one decision of this kind. In 2015 and 2016 there were no cases of this kind. An upward trend can, however, be observed with two decisions in 2017 (2018 statistics are not yet available).

Are sanctions applied in cases involving closing before clearance in foreign-to-foreign mergers?

As mentioned in question 9, in the case of closing the transaction without (or before) the OCCP’s clearance, the undertaking in question as well as persons holding managerial positions or members of managing bodies of such undertakings can be fined. The same rule applies equally to Polish and foreign-to-foreign mergers.

Nevertheless, to the best of our knowledge so far, cases where fines for closing transaction without (or before) the OCCP’s consent involved purely domestic transactions.

What solutions might be acceptable to permit closing before clearance in a foreign-to-foreign merger?

The Act provides for a worldwide bar on closing. However, in one of the decisions issued by the OCCP (No. DOK-37/2007 Olympus Capital Holdings Asia/Arysta Life Science, 6 April 2007), the competition authority seemed to hold that the concentration may be completed before its clearance, as long as the parties refrain from implementing its Polish aspect that has local effects in Poland. In this decision, the OCCP did not question the rationale for completing the transaction before clearance. The OCCP only pointed out that no relevant evidence was offered to show that the parties refrained from implementing that aspect of the transaction that had local effects in Poland. Because there is only one such decision and the Guidelines suggest that this scenario is unlikely, such solutions will always be associated with risk and need a case-by-case analysis.

Public takeovers

Are there any special merger control rules applicable to public takeover bids?

The same rules and requirements apply. However, the bar on closing will not be considered breached by implementing a public offer to purchase or exchange stocks that has been notified to the OCCP prior to implementation, provided that the buyer does not exercise the voting rights arising from the acquired stocks or exercises them solely in order to maintain the full value of its capital investment or to prevent substantial damage that might affect the undertakings participating in the concentration.

Documentation

What is the level of detail required in the preparation of a filing, and are there sanctions for supplying wrong or missing information?

The official filing form (the list of information and documents (LID)), as established by way of a regulation of the Council of Ministers, requires rather detailed information regarding the planned transaction to be provided by the notifying party in the notification (even if there are no overlaps between the undertakings concerned). Section 1 of the LID contains questions relating to the undertakings concerned (inter alia, data identifying undertakings involved, authorities authorised to represent them and the subject of the actual activity as well as the detailed description of intended concentration is included); section 2 involves information on the relevant markets and the effects of the transaction on the market.

A detailed market analysis is necessary when the market is affected horizontally or vertically or when the market is affected by a conglomerate concentration.

The LID, as well as the application itself, has to be submitted in Polish. Normally, the application runs to around 35 to 40 pages, plus attachments.

The LID has to be submitted together with certain documents such as inter alia excerpts from relevant commercial registers for the applicants (for undertakings that are obliged to file the notification please see question 10), executed versions of most relevant transaction documents, most recent financial statements of the parties concerned, structure charts of the parties concerned. Documents prepared in foreign languages have to be sworn translated into Polish.

In terms of possible sanctions please note that under the Act providing untrue data in a transaction notification may result in a financial sanction in the equivalent of up to €50 million. Such fines are rather uncommon in practice. Nevertheless, it should be mentioned that in 2012 the OCCP imposed on UPC Polska a fine amounting to 775,000 zlotys for providing false information regarding possessing documents material for an assessment of the pending merger proceedings (decision No. DKK-6/2012, UPC Polska/Aster, 30 January 2012). In short, UPC applied to the OCCP for the consent to acquire Aster. The OCCP addressed the undertaking to complete the notification inter alia with providing information if the company and the to-be-acquired entity possessed any reports, analyses or marketing enquiry concerning the access market to pay TV in Poland. During the proceedings it turned out that UPC concealed the market analysis containing significant information for the examined transaction. The document not revealed by the company confirmed inter alia the OCCP’s opinion, stating that the concentration would have a significant impact on local markets of particular cities. This was contrary to the stance of UPC Polska, which claimed during the pending proceedings that the market of pay TV shall be defined on a nationwide level.

There were cases where OCCP imposed fines on the third parties (competitors, clients, suppliers of the parties to the concentration) for not providing information in course of a market test carried out in a merger control case (such penalties were relatively low and aimed at disciplinary effect).

Investigation phases and timetable

What are the typical steps and different phases of the investigation?

In 2015, Poland finally adopted a two-stage merger review procedure – something that has been desired since the first modern competition legislation was adopted in 1990.

The Act currently stipulates that the antimonopoly proceedings in non-problematic concentration cases should be finalised within one month from commencement (first stage review). Complex cases, cases that can cause competition concerns (where there is a risk that a significant impediment to competition might occur) or that require a sector inquiry will enter (by way of a resolution of the OCCP that cannot be appealed) a second stage of the review. This will entail a four-month extension of the process, prolonging the duration of the whole procedure to five months in total.

However, the OCCP is able to stop the clock – in any of the stages – each time it asks questions or requires new data or documents to be provided in the course of the proceedings. The deadline may also be extended if a statement of objections is issued or remedies are being discussed.

The Act does not provide for any measures to speed up the proceedings. Neither are there any fast-track procedures available.

What is the statutory timetable for clearance? Can it be speeded up?

As indicated in question 17, the Act sets out a two-stage merger review procedure, where the first stage takes up to one month, potentially extendable to five months if the concentration requires an in-depth review in the second stage.

There are no official pre-notification contacts before the formal submission of the notification. However, the Guidelines indicate that it is possible to contact the OCCP before filing.

Substantive assessment

Substantive test

What is the substantive test for clearance?

The OCCP will clear concentrations that do not result in significant impediment to competition in the market, in particular, by the creation or strengthening of a dominant position in the market. This means that in practice the Polish competition authority follows the significant impediment to effective competition (SIEC) test.

The Act defines ‘dominant position’ as the position of the undertaking that allows it to prevent effective competition within a relevant market, thus enabling it to act to a significant degree independently of competitors, contracting parties and consumers. It is assumed that the undertaking holds a dominant position if its market share exceeds 40 per cent.

The OCCP may also issue conditional decisions (in 2011 there were three such decisions issued, in 2012 there was only one, in 2013 there were two such decisions issued, in 2014 there were four conditional clearances issued, in 2015 there was one such case and in 2016 two such decisions were issued – see also question 25) or a decision under article 20.2 of the Act, the latter offering clearance despite significant impediments to competition (there were no such decisions issued during the period 2011–2017).

Is there a special substantive test for joint ventures?

No, there is no special substantive test for joint ventures. As already indicated (see question 3), both full-function and non-full-function joint ventures are caught by the Polish competition law.

Theories of harm

What are the ‘theories of harm’ that the authorities will investigate?

In assessing concentrations, the OCCP focuses mainly on whether the SIEC test is met, especially where a dominant position is created or strengthened. In practice, post-merger market shares, concentration of the market (measured by the Herfindahl-Hirschman Index) and post-merger market structure still play a crucial role in the assessment of concentrations by the OCCP.

Non-competition issues

To what extent are non-competition issues relevant in the review process?

The OCCP may clear a concentration that will significantly impede competition in the market, including by the creation or strengthening of a dominant position, in any case where it is justifiable, including especially where the concentration is expected to contribute to economic development or technical progress or may have a positive impact on the national economy.

In decision No. DKK-32/07 of 28 September 2007, the OCCP concluded that even though the concentration could pose a significant risk to the competition at that particular moment, the following reasons should be taken into account: the transaction will contribute to the economic and technological development and will have a positive impact on the national economy as well as other benefits. In another decision of 8 March 2007, No. DOK-29/07, the OCCP pointed out that the concentration could pose a significant risk to competition, but there were arguments for clearance to be given (such as ensuring Poland’s energy security). As a result, the OCCP issued unconditional clearance in both cases.

However, it should be stressed that those are exceptions and later decisions (in particular decision No. DKK-1/2011 of 13 January 2011) suggest that the current approach is different and the authority is unwilling to follow the above rationale.

Economic efficiencies

To what extent does the authority take into account economic efficiencies in the review process?

As such the Act does not explicitly provide for efficiencies to be a reason to clear a transaction that may otherwise in principle harm competition. However, in some cases the authority took that into account when assessing the transaction. In one of their decisions (decision No. DKK-1/2011 of 13 January 2011 PGE/Energa) the OCCP took into account the economic efficiencies in the process of examining the concentration. However, finally the OCCP prohibited this transaction.

Remedies and ancillary restraints

Regulatory powers

What powers do the authorities have to prohibit or otherwise interfere with a transaction?

The OCCP may, by means of a decision, prohibit implementation of the concentration if it results in a significant impediment to competition in the market, in particular by the creation or strengthening of a dominant position.

If the decision is not complied with, the OCCP may, if strict conditions are met, apply restorative measures, for example, order a division of the undertaking.

The OCCP may also impose a fine if the transaction is closed despite its veto.

Remedies and conditions

Is it possible to remedy competition issues, for example by giving divestment undertakings or behavioural remedies?

Yes. Under the Act, the OCCP may clear a concentration provided the undertakings concerned fulfil certain conditions (conditional clearance).

These conditions may involve, in particular:

  • disposal of all or some of the assets of one or several undertakings;
  • divesture of control over an undertaking or undertakings, in particular by disposing of a block of stocks or shares, or dismissal of one or several persons from the management or supervisory board; or
  • granting a competitor exclusive rights.

The decision will determine the time limit for meeting the conditions.

What are the basic conditions and timing issues applicable to a divestment or other remedy?

In case of transactions that are considered to significantly restrict the competition on the relevant market (owing to substantial aggregation of market share or reduction of strong competitors on the market), it is likely for the OCCP to issue conditional decision including commitments. Commitments are intended as a means to ensure that affected markets remain competitive. The Act provides for two types of commitments: behavioural and structural. The OCCP is willing to impose structural rather than behavioural remedies, such as the obligation to permanently dispose of specified assets (eg, decision No. DKK-9/09 of 25 February 2009, decision No. DKK-64/10 of 12 July 2010, decision No. DKK-128/2011, decision No. DKK-70/11 and decision No. DKK-40/2014 of 31 March 2014). Regarding behavioural remedies, note the OCCP’s decision No. DKK-49/08 of 19 June 2008, where the OCCP gave clearance on condition that the undertaking withdraw from and not initiate any actions designed to acquire any ownership rights in the other undertaking and decision No. DKK-156/2017 of 4 October 2017 where the OCCP gave clearance on condition that the acquirer within agreed time period would sell all the electric energy produced in one of the assets of the acquired company through the commodity exchange. In one of its recent decisions (No. DKK-51/2019 of 25 February 2017) the OCCP combined both structural (divestment of part of the business) and behavioural (certain length of the contracts with the clients, price limits for the certain clients) remedies in order to allow for the concentration and protect the competitive landscape of the markets concerned.

It should be noted that in practice parties submit their proposal of commitments to the OCCP when the latter raises concerns over transaction. Although commitment proposal is subject to the OCCP’s revision, the conditional clearance may be issued only if the party consents to the type and scope of commitments. Otherwise, the OCCP issues a prohibition decision. The authority is entitled to determine, at its sole discretion, the type and scope of commitments. Moreover, the addressee of conditional decision is required to provide the OCCP with information regarding enforcement of commitments. The authority obliges the acquiring party to submit such information in a period of time prescribed in the commitment decision.

What is the track record of the authority in requiring remedies in foreign-to-foreign mergers?

To the best of our knowledge there is no such track record. However, in principle, remedies apply also to foreign-to-foreign mergers.

In decision No. DOK-36/2004 of 18 May 2004, the OCCP gave clearance on condition that an undertaking based in France shall dispose of its assets, including those located in France, to a third party, which proves that the remedies may also involve assets located outside Poland.

Ancillary restrictions

In what circumstances will the clearance decision cover related arrangements (ancillary restrictions)?

The matter of ancillary restrictions is not regulated in the Act. However, the Guidelines Regarding the Assessment of Concentration clearly state that ancillary restraints are not the subject of examination or assessment during the concentration proceedings. Therefore, the clearance of the OCCP does not extend to the anticompetitive contractual clauses accompanying the concentration. In practice, during the concentration procedure, the OCCP may inform the notifying undertakings that the contractual provisions accompanying the concentration raise doubts as to their conformity with the ban on anticompetitive agreements and therefore, if the undertakings refuse to change them, it may result in instigation of the antimonopoly proceedings in order to assess whether the anticompetitive arrangement infringes Polish competition law. It means that, in principle, the OCCP does not make the clearance for concentration dependant on the previous amendment of ancillary restraints. To sum up, although the Guidelines are not legally binding on undertakings, in practice the OCCP’s decisions do not automatically cover ancillary restrictions (that are directly related to, and necessary for, the implementation of the concentration). Therefore, caution and a case-by-case approach may be necessary while dealing with ancillary restraints in Poland.

Involvement of other parties or authorities

Third-party involvement and rights

Are customers and competitors involved in the review process and what rights do complainants have?

Customers and competitors are not parties to the proceedings. That means that they do not have access to files nor can they appeal against the decision. However, third parties may at their own initiative file comments or they may be asked by the OCCP to file input regarding important aspects of the case.

The OCCP keeps a register of all notified concentrations, which may be helpful for third parties. It is available on the authority’s website.

When it comes to complicated transactions, the OCCP will, in principle organize a market test and send questionnaires to competitors, clients as well as suppliers, allowing them to take a position.

Publicity and confidentiality

What publicity is given to the process and how do you protect commercial information, including business secrets, from disclosure?

The fact that a notification has been submitted, the date of submission, the notifying party and the current status of the proceedings are available at the OCCP’s website.

During antimonopoly proceedings, undertakings are obliged to disclose all information available, including one that may involve business secrets. The OCCP may, on an ex officio basis or on application of the undertaking concerned, limit access to some information for other parties (if there is more than one party to the proceedings). In such a case, the undertaking should file all documents in two versions, one confidential and the other non-confidential. The latter is available for all parties. In March 2017, the OCCP published guidelines providing further clarifications on what conditions the undertaking should meet under, to successfully apply for limitations on other parties’ access to the case files (including merger control proceedings) on the grounds of business secrets protection.

It is also worth mentioning that since January 2015, the notifying party is obligated to submit a brief (up to 500 words) description of the intended concentration. This description is posted on the OCCP’s website immediately after notification and should therefore be drafted in such a way that it does not contain secret information.

Furthermore, in case of imposing conditions on an undertaking, the OCCP on application of the undertaking concerned does not disclose deadlines for fulfilling the imposed conditions. The obligation in question is valid until the fulfilment of these conditions, but not later than the expiry of the deadline for their fulfilment. Moreover, in case of the above-mentioned application, the OCCP does not involve such deadlines in the publicly available version of the decision. The amendment in question is aimed at protecting commercial interests of the undertakings concerned.

Notwithstanding that, there is a general obligation on the OCCP employees to protect business secrets. This may mean having to mark information for treatment as a business secret even if there is only one party to the proceeding. Additionally, when the OCCP prepares the statement of reasons for its decision, it shall not disclose information marked as a business secret.

Cross-border regulatory cooperation

Do the authorities cooperate with antitrust authorities in other jurisdictions?

The OCCP is a member of numerous international working groups (eg, the ICN), the most important of which being those involving the competition authorities from other EU Member States. The officials from the Polish competition authority attend meetings of the Advisory Committee established by Regulation 139/2004. This Regulation provides for detailed rules of cooperation between Member States and the Commission in concentration cases.

There are currently three binding bilateral agreements between the OCCP and its Ukrainian, Russian and Hungarian counterparts.

Judicial review

Available avenues

What are the opportunities for appeal or judicial review?

An appeal arises from a decision of the OCCP to the Court of Competition and Consumer Protection. The appeal must be lodged within one month of the date on which the decision is served (owing to amendments, the time limit to lodge an appeal has been extended from 14 days to one month). Upon appeal, the OCCP should, without delay but not later than within three months of the date of filing the appeal, transmit the appealed decision to the court together with the record of proceedings. Where the OCCP considers the appeal to be justified, it may repeal or amend the decision, whether in whole or in part, without transmitting the record to the court. Any such repeal or amendment must be notified to the party concerned without delay by sending it a new decision; such a new decision is also open for appeal. Where justified, prior to transmitting an appeal to the court or repealing or amending his or her decision, the OCCP may also perform additional activities to clarify objections presented in the appeal.

To the best of our knowledge, widely recognised in Poland, one of the merger appeal cases – a prohibition decision in the energy sector PGE/Energa case (Decision No. DKK-1/2011) – was upheld by the court of consumer and competition protection. The second case, the OCCP’s prohibition for the takeover of Merlin by NFI Empik (Decision No. DKK-12/2011) – intended concentration on the online sale of non-specialised books and music CDs – was withdrawn by the undertaking that lodged the appeal a few days before the court hearing.

Time frame

What is the usual time frame for appeal or judicial review?

The usual time frame for judicial review (in the first instance) is one to two years. The whole appeal process (the first and second instance and cassation to the Supreme Court) may take up to five years.

Enforcement practice and future developments

Enforcement record

What is the recent enforcement record and what are the current enforcement concerns of the authorities?

UOKiK activities in numbers – 2017

Number

New concentration control proceedings

228

Issued decisions

concentration approval

205

conditional approval

1

fine for failure to report concentration

3

fine for failure to provide information

1

Other data

discontinuance of proceedings

2

return of the notification of the intended concentration

to the applicant

13

proceedings moved to the 2nd stage

11

average time of proceedings conducted in the 1st stage

33 days*

average proceedings period (2nd stage)

196 days**

cases are given an opinion in terms of the impact of concentration on the Polish market in connection with proceedings before the EC

346

new explanatory proceedings***

7

Concentration approvals in years 2015-2017

 

2015

2016

2017

concentration approvals

218

194

205

conditional approvals

1

2

1

* The actual case settlement period, taking into account the dates subject to exclusion under Art. 96 sec. 2 of the ACCP.

** The actual case settlement period, taking into account the dates subject to exclusion under Art. 96a sec. 8 of the ACCP.

*** It pertains to the level of concentration in the economy and determination of the obligation to report concentration.

Source: OCCP (there are no statistics for 2018 available).

 

Reform proposals

Are there current proposals to change the legislation?

All changes to the merger control regime in Poland have been covered by the amendments to the Act that came into force on 18 January 2015.

Update and trends

Key developments of the past year

What were the key cases, decisions, judgments and policy and legislative developments of the past year?