• Anti-monopoly proceedings concerning the division of thermal energy market in Warsaw, including charges against company managers.
• Searches at the premises of enterprises from the IT industry.
• These are the latest actions taken by UOKiK in the area of competition protection.

2019 will be the year of UOKiK fierce fight against competition-restricting practices, starting from two big cases. The first of these is the initiation of proceedings for the suspicion of collusion. Because of the collusion the residents of Warsaw and the surrounding areas might pay more for heating. The second case concerns searches aimed at gathering evidence of suspected illicit activities which could have an impact on competition in the IT and pharmaceutical sectors, and thus on the prices of certain drugs, says the President of UOKiK, Marek Niechciał.

Veolia and PGNiG: anti-monopoly proceedings

UOKiK suspects that there has been a division of thermal energy market in Warsaw as well as price and tender collusion. The Office brought charges against four entities, including: Veolia Energia Polska, Veolia Energia Warszawa, PGNiG Termika and PGNiG.

The Warsaw-based companies sell thermal energy to end-users, including housing cooperatives, home-owner associations, industrial plants, schools, offices, etc. Veolia Energia Warszawa uses the energy produced by PGNiG Termika, which in turn provides heat through the system belonging to Veolia Energia Warszawa.

The information collected by UOKiK shows that first arrangements of doubtful legality were made around the year 2014. To understand why it could happen, one has to go back a year earlier. In 2013, Veolia Energia Warszawa began to plan the construction of a combined heat and power plant in Ursus residential district in Warsaw, and PGNiG Termika intensified its operations in the area of selling thermal energy to end users. The companies started to compete for customers, and if Veolia’s construction project had worked, their competition would have become more and more intense. However, it did not happen, because a year later the enterprises established a cooperation which, in the opinion of the Office, may violate competition.

During the search at the companies’ premises, we found evidence that the companies jointly agreed that they would not compete against each other and focus on their core business, that is PGNiG Termika on heat generation, and Veolia Energia Warszawa on its sale. If such actions are not the result of individual business calculations but have been agreed jointly by independent and competing entities, then it may constitute a violation of competition rules through the division of the market, says the vice-president of UOKiK, Michał Holeksa.

According to the findings, Veolia Energia Warszawa dropped the idea of building a combined heat and power plant, while PGNiG Termika limited thermal energy sale and intended to stop it altogether. In addition, the companies could jointly set their tariffs which were presented to the President of the Energy Regulatory Office for approval.

Construction of a new heat plan would increase the energy security of the Warsaw agglomeration. The companies we investigated were aware of it but they abandoned this project as a result of their arrangements. This may have consequences in the future and affect directly the residents of Warsaw and the surrounding areas during serious power supply failures, adds the president of UOKiK, Marek Niechciał.

Both enterprises face a fine of up to 10% of their turnover. What is more, The Office brought charges against two managers who performed or used to performed major functions at Veolia Energia Warsaw and PGNiG Termika. UOKiK has evidence that they actively participated in disputed arrangements. The maximum fine in this case is PLN 2 million.

Searches: IT products for the pharmaceutical industry and the healthcare sector

At the end of February, UOKiK began searching the premises of three enterprises, namely Kamsoft and OSOZ from Katowice and PEX PharmaSequence from Warsaw. The case was opened due to numerous complaints sent to the Office. According to these complaints, pharmacies that wanted to sell certain drugs at special prices may have been forced to use a specific IT system or other third-party systems integrated with it. Moreover, integration of these systems could cause problems. Additionally, the complainants stressed that some drugs on special offer were difficult to find, so the fact that selected pharmacies had them for sale at reasonable prices made them more attractive to consumers.

The actions described in complaints could have dual consequences. On the one hand, they could restrict competition between pharmacies and be harmful for those who did not have the required software and thus could not sell selected drugs at special prices. On the other hand, they could adversely affect market situation of producers of information systems other than those specified above, as their offer became less attractive to pharmacists.

The Office decided to check whether the alleged actions actually took place and could constitute a competition-restricting practice. We found out that the enterprises may have had valid evidence at their offices, and we decided to initiate an investigation procedure. That is why we turned to the court and were granted a search warrant, says the vice-president of UOKiK, Michał Holeksa.

We collected evidence in electronic form and hard copy. We will go through these documents carefully and decide against whom specific charged will be brought, if any, says the President of UOKiK, Marek Niechciał.

A search is a measure taken by the Office when it suspects that substantial evidence is in the possession of an enterprise. Search is conducted only after the Office of Competition and Consumer Protection is granted a search warrant from the court and is most often assisted by the police. An enterprise is then required to let officers into the buildings and rooms, and make documents and data carriers available to them.

The leniency programme gives an enterprise participating in an illegal agreement a chance to avoid fine or reduce its amount on condition that it will cooperate with UOKiK and provide evidence or information about the existence of an unlawful agreement. Enterprises interested in the leniency programme are encouraged to contact the Office. UOKiK lawyers can be reached at 22 55 60 555 and they will answer all questions regarding leniency applications, including anonymous ones.

If you know anything about collusions or practices restricting competition, please report them to UOKiK. The Office runs a programme aimed at obtaining information from anonymous persons aware of practices restricting competition. Contact us at 22 55 60 500 or at the following email address: [SCODE]c3lnbmFsaXN0YUB1b2tpay5nb3YucGw=[ECODE]. All information about the programme can be found on: konkurs.uokik.gov.pl.

Additional information for the media:

The UOKiK Press Office
Pl. Powstańców Warszawy 1, 00-950 Warsaw
Phone: 22 55 60 430
E-mail: [SCODE]Yml1cm9wcmFzb3dlQHVva2lrLmdvdi5wbA==[ECODE]
Twitter: @UOKiKgovPL