On 18 January 2015, amendments to the Polish competition law (“Amendment”) entered into force (OJ.2014.945). Besides changes to the merger control regime on which we reported earlier, changes have also been introduced affecting the leniency program, the liability of directors, procedural aspects, and limitation period for competition law infringements.
Apart from immunity from fines, the leniency programme provides for a maximum 50%, 30% and 20% reduction in the fines that could have been imposed on an undertaking absent the leniency application (respectively for the first, second and subsequent applicants eligible for reduction). Immunity from fines can only be granted to those leniency applicants who are the first to submit their application, provide the respective evidence, and did not induce others to participate in a cartel. With the Amendment’s entry into force, the prerequisite of not being an instigator of the infringement has been annulled, as it was difficult in practice to establish who actually initiated a cartel. Further, immunity will be awarded provided that evidence either enables the authority (Poland’s Office for Competition and Consumer Protection – “OCCP”) to commence the proceedings or if it significantly contributes to issuance of a cartel decision by the OCCP in the event that proceedings have already been commenced.
The leniency applicant is further obliged to not disclose their intent to apply for leniency, to cooperate with the OCCP (including providing evidence on their own initiative), and to terminate their participation in the cartel immediately after submitting the leniency application. The Amendment does not regulate the case of a firm continuing, based on the OCCP’s consent, illegal behaviour after applying for leniency.
The standard leniency programme is supplemented by a “leniency plus” programme, the latter being a novelty under Polish competition law. The “leniency plus” programme will apply if an undertaking that files an application for a reduction of a fine discloses to the OCCP information about another anti-competitive practice that had hitherto been unknown to the OCCP. In return, the applicant will receive a 30% reduction in addition to the already granted reduction. The application of this tool is aimed at increasing a detection of anti-competitive agreements. Yet, the notion of “another anti-competitive practice” is subject to clarification by the OCCP or the courts, in particular regarding the criteria for distinguishing the separate infringements.
The leniency and the leniency plus programmes are applicable to both horizontal and vertical infringements.
Liability of directors
The Amendment introduces financial liability on the part of directors (board members, managers) whose actions or omissions led to a competition law infringement. Directors will be liable only for infringements committed intentionally and the maximum fine which can be imposed on the director amounts to PLN 2 mil (ca. EUR 500,000). The fines imposed on the undertaking and its directors are to be imposed in the same decision. The leniency and the leniency plus programmes also apply to directors, with directors able to benefit from immunity or a reduction of fines independently from their undertaking.
In its cartel decision, the OCCP may specify remedies to be implemented by the undertaking with the aim of helping the undertakings to effectively terminate their anticompetitive behaviour. If an infringement relating to the prohibition of anti-competitive agreements or an abuse of a dominant position is found, the OCCP in its decision may impose not only an order to refrain from illegal practice, but also an obligation to apply certain measures (remedies) that will be explicitly enumerated by the OCCP. The benefit for the undertakings in this approach lies in having the legal certainty with regard to the fulfillment of the decision, i.e. the undertakings will exactly know on the basis of the OCCP’s decision what the authority expects them to do in order to cease the questioned behaviour.
The settlement procedure introduced by the Amendment is aimed at the OCCP’s decision becoming final faster, i.e. without taking the case to the court. In exchange for a 10% reduction in their fine, an undertaking will be expected not to appeal against the OCCP’s decision. The undertaking joining the settlement procedure will be informed about the reduced fine and the expected content of the decision. This will give the undertaking an opportunity to assess the settlement procedure’s benefits and disadvantages. In case that the undertaking lodges an appeal anyway, the 10% reduction is annulled. Both the OCCP and the undertaking are entitled to withdraw from the settlement procedure at any stage.
The Amendment has introduced a one-month deadline for lodging an appeal against an OCCP decisions (previously, the deadline was two weeks). In case of an appeal, the OCCP is obliged to forward the files to the court immediately, but no later than within three months (the deadline for the OCCP is only instructive). Further, the limitation period for competition law infringements has been prolonged to up to five years since the end of the year in which the behaviour ended (as opposed to the pervious quite short limitation period of one year).