Every year UOKiK imposes fines amounting to hundreds of millions of zloty on participants of prohibited agreements. It is possible to avoid these severe sanctions by cooperating with the antitrust authority. It can be done as part of the leniency programme

Prohibited agreements between businesses concerning e.g. prices of goods or market division are one of the most serious restrictions of competition. Such practices are also the most difficult to detect and prove as, by nature, they are secret. Because they impact the economy in a negative way, the penalties for their participants are severe - they reach up 10% of their revenue. So far, the highest penalty imposed by UOKiK for price collusion was PLN 110 million in total for the participants of an agreement between a producer of paints and varnishes and owners of building materials outlets. The highest individual penalties - above PLN 32 million - were imposed on Leroy Merlin Polska and Polifarb Cieszyn-Wrocław.

One of the methods to gather evidence of a cartel’s existence is to obtain information directly from its participants. This is possible under the leniency programme which, on one hand, requires the applying businesses to withdraw from the unlawful agreement they are part to and, on the other, it provides them with incentives to cooperate with the antitrust authority in return for immunity from a fine or its reduction. 30 years ago such a solution was first introduced by the USA and in 1996 by the European Commission.

In Poland, a leniency programme was launched on 1 May 2004 - 13 applications have been submitted to the Office so far (e.g. Austria has received 11 applications since 2006 and the Czech Republic - 4 since 2001). One of UOKiK priorities for the subsequent years is to promote this tool e.g. by imposing more rigorous penalties on businesses and publishing clear guidelines concerning the criteria for setting the fines, which are currently in preparation.

To give an example of the benefits of participating in the leniency programme: thanks to its cooperation and providing information to the Office, Castorama - one of the participants of the abovementioned collusion between Polifarb Cieszyn-Wrocław and building materials outlets - avoided a severe penalty. While the other companies received fines of even several dozen million zloty, the participant of leniency programme paid PLN 50 thousand.

Also the experience of the other countries shows the beneficial aspects of businesses’ cooperation with antitrust authorities. In the USA, the so called vitamin cartel was cracked thanks to the information provided by one of its participants, who in return avoided the penalty while the rest of the participants received penalties of almost USD 750 million in total and their employees were imprisoned. American antitrust law provides for criminal liability of natural persons who are cartel members - they may be sentenced to up to 10 years’ imprisonment and up to one million dollars in fine.

The nature of sanctions is one of the most significant differences between the American and the European models of the leniency. Criminal liability of executives participating in a cartel has also been introduced in some European countries e.g. the UK, Ireland and Slovenia. The Czech Republic intends to adopt a similar solution. According to UOKiK, liability of natural persons for participating in an unlawful agreement may encourage cooperation with the antitrust authority. However, the nature of the liability - only financial or also criminal - remains to be decided.

The leniency experiences in the European Union and the USA were discussed during an international seminar organized by UOKiK under the Central European Competition Initiative (CECI), which includes Poland, the Czech Republic, Slovakia, Slovenia and Hungary. “Cohesion of laws, predictability and uniformity of decisions, as well as consistent actions are the necessary conditions for a leniency programme to be effective,” said Małgorzata Krasnodębska-Tomkiel, President of UOKiK. Apart from the CECI countries, representatives of the antitrust authorities from Austria, Russia, Romania, Estonia, the US Department of Justice and the European Commission also took part in the meeting.

A company applying for immunity from an antitrust fine cannot be the initiator of the unlawful agreement or coerce the other parties to participate in it. Such an enterprise should also be the first to provide the antitrust authority with information on the prohibited agreement’s existence that is sufficient to launch antitrust proceedings or provide evidence that enables the authority to take a decision in the matter. Moreover, the applicant must actively cooperate with the Office in the course of the proceedings by providing it with all the evidence in its possession and must cease to participate in the agreement. Should the applicant not meet the requirements, it may apply for reduction of a fine on condition that it provides the antitrust authority with evidence contributing to taking a decision in the matter and that it ceases its participation in the agreement.

All the participants of unlawful collusions meeting the above requirements may contact the Department of Competition Protection at the Office of Competition and Consumer Protection by faks +48 22 826 30 51, phone +48 22 55 60 299 or via e-mail: mbychowska@uokik.gov.pl.

Additional information:
Małgorzata Cieloch, Spokesperson for UOKiK
Pl. Powstańców Warszawy 1, 00-950 Warsaw, Poland
Tel. (+48 22) 827 28 92, 55 60 106, 55 60 430
faks (+48 22) 826 11 86
E-mail: mcieloch@uokik.gov.pl