The Office of Competition and Consumer Protection (“UOKiK”) has issued its first decision under new regulations on abuse of contractual advantage. In July 2017, the President of the UOKiK was granted wide powers around prosecuting unfair practices related to contractual advantage on the food market. The current decision relates to a possible case of abuse of contractual advantage concerning the activities of a producer of food concentrates, dried fruit and spices.
The UOKiK’s concerns were raised by the food processor’s actions towards its contractors – suppliers of carrots. In the UOKiK’s opinion, abuse of contractual advantage in this case involved:
- extending the payment terms for delivered goods, which meant that suppliers had to wait up to three months for remuneration;
- failing to specify dates for the collection of goods, which meant that suppliers had no guarantee of when or even if such collection would take place;
- forcing suppliers to deduct part of their remuneration to pay membership fees to a trade association.
Under the new regulations, if abuses of contractual advantage are confirmed, the President of the UOKiK may impose a penalty of up to 3% of the annual turnover of the company committing the infringement. The company may avoid the penalty if it voluntarily undertakes to stop the unlawful practices or remedy their consequences.
In the present case, the company has declared its willingness to cooperate with the President of the UOKiK and, in order to avoid punishment, has undertaken to change the relevant contractual provisions. It must make the changes to the contracts within one month of when the decision took effect. Within the following month, the company has to submit a report to the President of UOKiK confirming that it has carried out the changes.