Between December 1^st and early February, Poland’s Court of Competition and Consumer Protection (SOKiK), Court of Appeal and Supreme Court have ruled on 45 cases involving decisions issued by the Office of Competition and Consumer Protection.  

The cases concerned decisions finding infringement of collective consumer interests by insurance companies, banks and a developer as well as cases of limiting competition by a restaurant chain and an electric energy distribution company. The courts fully upheld 33 of the Authority’s decisions, changed another five, and completely overturned three. In terms of lawsuits, the court ruled illegal all the disputed clauses in one case, and in another some of the clauses in the suit. Below is a summary of the most important decisions the courts issued between December 2015 and early February.

Consumer Protection

In January and February 2016 the Court of Appeal (CA) ruled on decisions UOKiK issued in November 2011 on liability insurance contracts. The Office said then that PZU and Uniqua limited their liability on insurance contracts they had concluded with drivers who had liability insurance contracts, not paying a refund or significantly impeding policy holders from collecting one after hiring a replacement vehicle when their car had been damaged in a collision. Consumers could count on reimbursement of costs only if they showed that a replacement car was essential in their everyday lives (eg. access to work, school) and they were not able to use other forms of transport. UOKiK fined PZU more than 11.2 million zł (ca. 2,5 million EUR) and Uniqa more than 1 million (ca.226,000 EUR). SOKiK sided with the Authority, ruling the practice violated collective consumer interests, though it overturned the fine on Uniqua. In the beginning of this year the Court of Appeal handed down two judgments in which it fully overturned UOKiK’s decision. The Court cited a 2015 Supreme Court ruling stating that the victim of a traffic accident is not a consumer.

Also of note was a December 2015 Court of Appeal ruling on liability insurance and UOKiK’s decision from December 2012 in the Association of Insurance and Reinsurance (TUiR) Allianz Poland case. One company practice the Authority challenged was the exclusion or limitation of the rights of consumers to be refunded the cost of renting a replacement vehicle. The CA ruled that if an insurance company refuses to pay compensation and reimbursement for such costs, the victim may claim reimbursement directly from the insured person (the individual at fault in the accident). However, if that individual is a consumer with a liability insurance contract, the insurer practice infringes the collective consumer interests.

With regard to the TUiR Allianz contracts, UOKiK question another provision, which reduced the compensation owed to the consumer under the contract of comprehensive cover by the amount of VAT. The CA ruled this was not the same as the provision included in the Register of Prohibited Clauses. Therefore, the court overturned the fine of over 1 mln PLN (ca. 226,000 EUR) UOKiK had imposed on Allianz.

Another judgment involving an insurer concerned Aegon Life Insurance and unit-linked life insurance policies (UFK). In UOKiK’s view, Aegon misled clients when it informed them it would change its method of calculating termination fees on such contracts. The original resolution on this fee was recognised as illegal by SOKiK and entered into the register of prohibited clauses. Aegon unilaterally and without notice forced upon clients an amendment to the agreement on the basis of an internal resolution of the executive board. According to the law, such a change is possible only with the consent of both parties. UOKiK ordered the company to refrain from the unfair practice and imposed a fine of nearly 23.5 million PLN (over 5 million EUR). In December 2015 SOKiK dismissed the company’s appeal and upheld UOKiK’s decision. In its justification the court pointed out Aegon had clearly violated the law, and neither the desire to pass losses on to consumers, nor the concern that consumers would opt for cost-free termination of contracts based on the amendment, justified the use of illegal practices.

Several rulings in cases on bank practices have also recently come down. One of note concerns Bank Handlowy. In December 2014, UOKiK accused the institution of infringing collective consumer interests for its failure to separate from standard contracts, which specify the conditions for consumer credit, statements empowering it to collect money directly from a client’s employer. This practice enabled the bank to automatically collect the loan installments. UOKiK also questioned a contract provision stating that, during the term of the loan agreement, the bank could freely change the interest rate it charged — for example when National Bank of Poland (NBP) increased the interest rate. UOKiK further challenged the bank’s practice of making the possibility of withdrawing from consumer loan contracts dependent on the condition that a declaration of withdrawal from the contract be delivered within 14 days of signing it. According to the law, just sending such a statement within this time is sufficient to meet the time requirement.

UOKiK fined Bank Handlowy more than 2.8 million PLN (over 630,000 EUR).  In December 2015, SOKiK changed UOKiK’s decision and overturned those parts of the decision pertaining to the mandate provisions, changes of interest and fines. The court recognized as unlawful only the practice regarding contract termination. The part of the decision regarding changes of interest rates was overturned due changes to case law in matters of the clauses listed in the register of contractual provisions. The court overturned the decision because judgments that recognised the provisions as illegal and listed in the register did not apply to Bank Handlowy.

In another banking case, in December 2013 UOKiK issued a decision that found BRE Bank was delaying the provision of information on consumers’ debt repayment to the Credit Information Bureau. UOKiK levied a fine of over 1.5 million PLN (over 340,000 EUR), which SOKiK upheld for the violation of collective consumer interests.

In December 2015 the Court of Appeal found a clause used by SKOK Jaworzno to be illegal. UOKiK had questioned a provision which empowered the company to change the amount of fees and commissions, including when price increases occurred for postal services, energy, and the price indices of goods and services announced by the Central Statistical Office of Poland, among other things. However, In September 2014 SOKiK ruled the clause was not abusive. The Court of Appeal subsequently disagreed, stating that the ability to change the amount of fees and commissions had been understood too broadly, and puts the consumer in a thoroughly unpredictable situation, while the creator of the standard contract reserves complete discretion to raise fees. The court deemed the situation one of total contractual inequality, which clearly violates good practices and consumer interests.

SOKiK also issued a ruling in a case against developer Dombud. In August 2014 UOKiK issued a decision questioning contract clauses the developer concluded with consumers. According to one, consumers were not allowed to pay a lower price or to withdraw from the contract if the size of a premises differed by 1 % from that specified in the design. UOKiK imposed a fine of more than 50,000 PLN (over 11,000 EUR). Fully agreeing with the Authority’s decision, the court dismissed Dombud’s appeal.

The last collective consumer interest infringement case to come before the court involved a case against Vision Express. In July, 2014 UOKiK questioned the company’s "3 in 1" television ads, which encouraged consumers to buy glasses with this offer: buy a pair of glasses now and get two more pairs for free.  According to the Office, such an ad would understandably lead the average consumer to believe that buying one pair of prescription glasses would get them two more, free of charge. In fact, customers received only a discount on just one more pair. UOKiK fined the company nearly 200,000 PLN (over 45,000 EUR) for the violation. In December, SOKiK upheld the Authority’s decision and the fine, on the grounds that offering a product in the way the company did constituted an unfair, immoral market practice that could distort consumer behavior.

Annuity agreements

The courts have ruled also in cases concerning lifetime annuities. The first judgment relates to a 2013 UOKiK decision finding that the joint-stock company Fundusz Hipoteczny Dom was misleading consumers by presenting terms as more attractive than they actually were. The company did this by suggesting that regardless of the annuity paid to the consumer a new landlord would adjust the rent for property acquired. In reality, the rent was paid from the pension mortgage granted to the senior, which reduced the amount directly paid to clients. UOKiK fined the company more than 43,000 PLN (almost 10 000 EUR) for violating collective consumer interests, and SOKiK has now dismissed the company’s appeal. The Court reasoned that, given Polish pensioners’ generally low incomes, numerous consumers could have been interested in the offer of a lifetime annuity, and hence also been misled.

The court also ruled on another enterprise’s annuity advertisements, which in this case were printed on leaflets by a company claiming to be Kancelaria Hipoteczną Alter Ego (the Alter Ego Mortgage Office). However, no company under that name actually existed. For misleading consumers, UOKiK levied a fine of more than 7,000 PLN (ca. 1500 EUR). The decision has now been upheld by both SOKiK and the Court of Appeal. The latter stated that consumers were misled because the name “Kancelaria” arouses positive associations that build confidence and a sense of security.

Competition Protection

Among the noteworthy competition limiting practices judgments was a Court of Appeal ruling in a case against Sfinks Poland. In June 2013 the Office issued a decision finding the company had concluded an agreement with franchisees in which it established inelastic prices on products in the Sphinx restaurants chain. UOKiK imposed a 464,000 PLN (over 100,000 EUR) fine, and SOKiK in 2014 dismissed the company’s appeal. The Court of Appeal, however, overturned that ruling and referred the case to the Court of First Instance to be reheard.

In December2015 SOKiK dismissed another appeal, this one from animal food producer Royal Canin, which UOKiK found to have entered into an agreement with distributors of its products. The group limited distribution channels for dog and cat food sold under the “Veterinary Diet” label, seeking to eliminate all sales channels of the food with the exception of veterinary offices and clinics. UOKiK imposed a fine of more than 3 million PLN (over 670,000 EUR), and in December 2015 the court dismissed the company’s appeal. In its justification, the court stated Royal Canin sought to establish a system of selective sales that would limit the number of entities that could offer the products it distributed.

Another judgment concerned Communications Equipment Manufacturer PZL – Swidnik. In December, 2014 UOKiK stated that the company refused to sell other companies spare parts for its helicopter Mi-2, of which it is the sole manufacturer. For abusing its dominant position, the company was fined more than 320,000 PLN (over 72,000 EUR). Last month, SOKiK dismissed the company’s appeal and upheld the decision and fine. 

SOKiK also ruled on a case against electric company RWE Poland, which UOKiK stated, in a decision going back to December 2011, that the company abused its market position to impose unfavourable terms on contractors on the distribution market and competitors on the energy provision market. UOKiK imposed a fine of 6.3 million PLN (almost 1,5 million EUR) for the abuse of a dominant position. However, in August 2014 SOKiK overturned the decision on procedural grounds, stating that the company’s practice had taken place on the electric energy market covering the entirety of Poland, but the decision was issued by an UOKiK branch office, not the main Office. In 2015, the Court of Appeal backed the Court of First Instance’s ruling and the case was dismissed.  

The last of the competition infringement-related judgments concerns a bid-rigging agreement between IT enterprises in Wroclaw: Incom, Integrit, Itsumi, Dreamtec, KEN Soltuions, (now MobiReg) and Dreamtec Solutions. At the end of 2011, the Lower Silesia Marshal's Office organised a tender for the supply of computer equipment for schools and libraries participating in the project Lower Silesia e-school. The lowest bid, submitted by Itsumi and KEN Solutions, was rejected because the pair knowingly presented the wrong certificate from the Social Insurance Institution on arrears in its social security payments, though it could have furnished the required document. This gave the consortium Integrit and Dreamtec Solutions the winning bid, which was a more expensive deal. Penalties imposed on the bidders for participating in a competition-restricting agreement reached nearly 2 million PLN (over 450,000 EUR). The companies appealed the decision to the Court of Competition and Consumer Protection, which dismissed them (judgments on the individual entrepreneurs’ appeals came down in November 2015 and January and February of this year). In the opinion of the court, the companies were conscious and coordinated in their efforts to withdraw one bid so that another, more expensive one would win.

The Appeal Procedure

An enterprise may appeal an UOKiK decision to SOKiK, and a SOKiK ruling, in turn, to the Court of Appeal in Warsaw. A cassation appeal from a Court of Appeal judgment can be filed with the Supreme Court.

Database of Judgments

Since November UOKiK has maintained a database of court judgments on its website. It contains all rulings handed down since January 1, 2015, including decisions issued on competition limiting practices, concentration control, infringement of collective consumer interests and in cases of the use of prohibited clauses. It also contains rulings announced earlier by courts of lower instance. Last year, Poland’s courts ruled on cases concerning 316 companies. They upheld 170 of UOKiK’s decisions, modified 68 and fully repealed 28. 12 cases were remanded for reconsideration by courts of lower instance. 38 rulings concerned lawsuits on the use of disputed clauses.

Additional information for the media:

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