Kronopol and Akuna Polska – these two undertakings entered into prohibited agreements with distributors of their products. Moreover, two companies seated in Białystok and operating on the waste market, and seven taxi corporations from Grudziądz also applied unlawful practices. Last year witnessed a record number of submitted leniency applications. Furthermore, the Office took under scrutiny the consumer knowledge of competition

As much as 77% of us realize that competition provides consumers with a wider selection and higher quality of goods – as reveals the latest survey conducted by TNS Polska* by commission of UOKiK. More than 62% of respondents rightly claimed that fixing by sellers of Christmas trees one price of silver spruce wouldn’t be beneficial to our wallets and will certainly be contrary to law. Unfortunately, as much as 50% of respondents claimed that increasing by traders the price of fireworks right before the New Year’s Eve is prohibited as well. Such practice, however, is in conformity with the law (39% of the surveyed responded correcly) as sellers have the right to price their products themselves, whereas fixing prices in collusion with other undertakings is prohibited. The practice of UOKiK indicates that prohibited and competition-restricting agreements may affect a wide range of products and services. As a result of latest actions undertaken by the Office, UOKiK has issued 4 decisions, imposed fines in total of nearly PLN 14 mln, identified 11 undertakings infringing the law and received two applications under the leniency programme.

Kronopol – wood-derived boards

Following the inspection with search carried out by the Office, in March, 2012 UOKiK instituted the proceedings. The collected evidence and examination conducted revealed that in the years 2001-2012 – for over 10 years - Kronopol had been fixing the minimum wholesale resale prices of its products in cooperation with its authorised representatives and warehouses. This referred both to chip and fibre boards used mainly in furniture industry. As a result of the collusion, the selected products of Kronopol were not available  to purchase at prices lower than the minimum price agreed by undertakings. Applying by authorised distributors the prices lower than the fixed ones could result in imposing financial sanctions by the producer.

A maximum fine for participation in a competition-restricting agreement may amount to 10% of income. The entrepreneur may expect decreasing a fine provided they undertake cooperation with the Office. Kronopol submitted the leniency application, however, it could not expect a full immunity from fine (only its reduction) as the entity was the agreement’s initiator. The producer provided essential evidence, e.g. business correspondence and notes made at meetings with distributors and resigned from colluding. For this reason the President of UOKiK decided to decrease the fine by 30%. Eventually Kronopol was fined with nearly PLN 14 mln (PLN 13 738 187.90).

Akuna Polska – dietary supplemets

Also Akuna Polska concluded an agreement with its distributors. The company deals with selling dietary supplements based on multi-level marketing. In such system, a contractor purchases products directly from Akuna at fixed prices and resells them to another disributor under the so-called sponsor line, or the final user – a consumer. The data collected by the Office demonstrates that for over 10 years (until December, 2011) the company was fixing retail prices at which distributors were obliged to sell products to consumers. Moreover, until February, 2012, the entity was hindering its trading partners to select their contractors freely - instead, it imposed the entities to trade goods both ways. For applying the competition-restricting practice, the President of UOKiK fined Akuna Polska with approx. PLN 160 thousand (PLN 159 534.89).

Bid rigging – municipal waste

The decision concerns the tender for the collection and disposal of municipal waste in the period 2008-2011, held by Zarząd Mienia Komunalnego (ZMK) in Białystok. The consortium of Astwa and MPO submitted the winning bid. They were two largest enterprises operating in Białystok and the only ones which provided services to ZMK before. The undertakings established the consortium, which stemed from their alleged technical limitations making it impossible for them to submit two separate bids. However, the collected evidence clearly demonstrates  that the cooperation of MPO and Astwa (consisting in using the equipment, e.g. dustcarts) was in fact non-existent. Therefore, creating the consortium was to allow the undertakings to maintain their current market shares with the exclusion of competition mechanisms.

The law allows for joint bidding of independent undertakings during a tender. However, whenever the entities have a possibility to render services on their own, and there is no necessity to cooperate with competitors – then establishing a consortium raises doubts of undertaking unlawful and competition-restricting cooperation. The President of UOKiK decided that Astwa and MPO concluded a prohibited anticompetitive agreement.

This is the first decision by UOKiK where the cooperation of undertakings within a consortium – which in principle is not prohibited - has been put into question. The President of UOKiK decided to refrain from imposing a fine on Astwa and MPO. The decision is to be of preventive nature, aimed at pointing undertakings which practices can be regarded as anticompetitive in respect of cooperation when bidding.

Taxi drivers fixed prices - Grudziądz

The antimonopoly proceedings as regards the price fixing by taxi drivers in Grudziądz were instituted upon submitting information by one of participants to the agreement. It revealed that seven taxi corporations jointly fixed the rates for: one kilometer of travel, initial charge and one-hour-waiting. The prohibited practice was in force from 2008, or even longer. The President of UOKiK imposed on the participants to the agreement (Korona Taxi, two company partners of Non Stop Tele Taxi, Grudziądzkie Zrzeszenie Transportu,  Taxi Mercedes and Stowarzyszenie Taksówkarzy Tele Taxi) a fine in total amounting  to nearly PLN 18 thousand. Futhermore, she ordered to discontinue the prohibited practice. Biuro Tele Taxi, the undertaking which informed UOKiK of the collusion, and had quit the cartel before, managed to avoid the sanctions.

The decisions presented in this press release are not final and can be appealed against to the Court of Competition and Consumer Protection.

In 2012, UOKiK was warning all the year the professional market participants against concluding prohibited agreements. During the initiative “Entrepreneur, don’t collude!” we encouraged entities to benefit from the leniency programme, which allows for immunity from fine or decreasing the sanction in return for collaboration. This year UOKiK has received a record number of leniency applications – 15, as compared to eight previous years - 30. Any undertakings interested in the leniency programme may contact the Office at the following phone number: +48 22 55 60 555, where lawyers form UOKiK respond to any questions regarding the leniency applications, even anonymous.

Additional information for the media:
Małgorzata Cieloch, Spokesperson for UOKiK
Department of International Relations and Communication
Pl. Powstańców Warszawy 1, 00-950 Warszawa
Tel.: +48 22 827 28 92, 55 60 106, 55 60 314
Fax +48 22 826 11 86
E-mail: [SCODE]bWFsZ29yemF0YS5jaWVsb2NoQHVva2lrLmdvdi5wbA==[ECODE]

* the survey conducted from 14th to 18th December 2012 by the technique of Computer Assisted Personal Interviewing (CAPI), based on a representative and selected at random group of 1000 Poles aged 15+.