• The Marketing Communication Association SAR affected the independence of its members in tenders and organized unauthorized exchange of information.
• President of UOKiK Tomasz Chróstny has obliged the Association to change its anti-competitive practices.

The Marketing Communication Association SAR is a group associating more than 120 marketing agencies involved in the development and delivery of promotion and advertising services. In late 2019, the President of the Office of Competition and Consumer Protection initiated antimonopoly proceedings against the Association. It concerned anti-competitive practices.

SAR’s anti-competitive practices

Marketing agencies applying for new orders and participating in tenders are often required to develop an initial project vision. The contested practices of SAR consisted in obliging branding agencies to resign from participation in tenders, in which the creative process, such as the presentation of a poster design or packaging, was not eligible for the so-called rejection fee.

- SAR's practices deprived the members of the Association of their independence in making decisions and limited their freedom. We do not question the right of branding agencies to demand a fee for participation in a tender depending, for example, on the amount of work required to prepare an offer, but each company should decide on this individually and not be obliged thereto by a trade association. This type of coordination is unacceptable - says President of UOKiK Tomasz Chróstny.

Moreover, the Association initiated the exchange of information about tenders through a specially created internet platform. Marketing agencies placed there information on which contest they intended to take part in, and if more than one agency applied for the same contest, SAR linked them to a shared "bidding room". Companies were able to check on an ongoing basis which of their competitors was placing bids. What is more, thanks to the bidding platform, the number of entities competing for the contract was monitored (so that no more than 5 agencies could take part in the tender) and members of the association were monitored whether they were not taking part in tenders without rejection fee. Such practices were a form of agreement that, by its very nature, could be harmful to competition.

- The organization of the tender guarantees the existence of a competition mechanism in the bidding process. Each of its participants should independently develop their own offer and strategy. The exchange of information between competitors infringes competition. These practices distort the purpose of the tender, the aim of which is fair competition of market entities for awarding a service, and the contracting authority's selection of the most advantageous offer on the basis of pre-established criteria - says Tomasz Chróstny, the President of UOKiK.

Consequences of UOKiK intervention

In connection with the antitrust proceedings, SAR has withdrawn from the disputed practices and has undertaken to remedy their impact. The President of the Office for Competition and Consumer Protection obliged the Association to fulfil a number of commitments within certain deadlines and to report on the progress in their fulfilment.

The official documents of the Association shall highlight that the rules and manner of participation in tenders constitute an individual decision of each participant. Existing documents containing questionable solutions are to be withdrawn or revoked. Furthermore, SAR undertakes not to provide its members or other entities with tools to increase the transparency of information concerning contract or tender proceedings, beyond those resulting from publicly available sources. The implementation of the commitment means that from now on the entities belonging to SAR have the right to decide independently and autonomously about joining the tenders. No SAR member will be allowed to refer to any document of the organization indicating the mandatory use of rejection fee.

Under the Act on Competition and Consumer Protection, agreements aimed at eliminating, restricting or otherwise infringing competition are prohibited. Such agreements are also considered to be resolutions or other actions of an association of entrepreneurs, their statutory bodies or trade self-governing bodies. SAR's practice might have had an impact on trade between EU countries, therefore the President of UOKiK carried out proceedings in connection with the violation of Polish and EU regulations.

Notify UOKiK

The Office runs a programme of acquiring information from anonymous whistle-blowers. Visit https://konkurencja.uokik.gov.pl/sygnalista/ and fill out a simple form. The system we use guarantees full anonymity, also towards the office itself.

The President of the Authority would also like to remind the public that anyone who has suffered loss as a result of a breach of competition law may file a civil lawsuit against any of the entities that have broken the law.

Additional information for the media:

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