A little over a year after coming into force, the Act on Counteracting Unfair Use of Contractual Advantage in Agricultural and Food Products Trade (“the Act”) is to be amended.
Since the Act came into force, the President of the Office for Competition and Consumer Protection (“UOKiK”) issued only one decision based on its provisions. In some cases, the UOKiK has carried out more extensive analyses and market research, namely in the milk production and processing industry and soft fruits market.
The original Act is considered unsatisfactory for various reasons, including the following: (i) it establishes turnover thresholds (PLN 50,000 and PLN 100,000,000) that significantly narrow the circumstances in which the Act can be applied; (ii) it fails to address the “fear factor”, whereby a supplier, as the weaker party in a transaction, refrains from reporting a given unfair practice, for fear of destroying its commercial relationship with a buyer.
In response to these shortcomings, the amendment aims to extend the powers of the President of UOKiK to initiate proceedings and improve the control process of the agri-food sector by introducing the following changes to the Act:
- abolition of the required turnover thresholds (PLN 50,000 and PLN 100,000,000). Contractual advantage will be understood as the occurrence of a significant disproportion in the buyer’s economic potential with respect to the supplier or the supplier’s economic potential with respect to the buyer, thanks to which the subjective scope of the Act will significantly expand;
- extending the scope of entities authorised to report an unfair practice to the President of UOKiK – currently only a business against whom an unfair practice has been applied may do it; after the changes anyone will be able to make such a notification;
- whoever reports an unfair practice will be guaranteed total anonymity throughout the proceedings.