Polska Telefonia Cyfrowa, in breach of law and contrary to court decision, hindered UOKiK to carry out an inspection with search. The undertaking was fined PLN 123 million for unlawful activities

According to the Act on competition and consumer protection, in the case of suspicion of applying  competition-restricting practices, the President of UOKiK can carry out an inspection with search in the undertaking’s premises. It is aimed at collecting evidence of the application of practices  infringing the provisions of the Act. Authorised employees of the Office may, inter alia, demand access to the premises of the inspected undertaking, request presentation of documentation, data carriers, e.g. hard disks, and providing explanation. During the inspection, employees of UOKiK  may also search the premises or objects upon the consent of the court of competition and consumer protection within 48 hours of filing the request. For failure to collaborate during an inspection, the President of UOKiK may impose on the undertaking a financial penalty amounting up to EUR 50 million.

The inspection of the premises of Polska Telefonia Cyfrowa (PTC), the owner of, inter alia, the mobile network operator ERA, was conducted under the explanatory proceedings aimed at determining whether the competition-restricting agreement was concluded on mobile television service. On 2 December 2009, the employees of the Office, accompanied by the police, commenced the simultaneous inspection of the premises of five entities: PTC, Polkomtel, P4, Info TV FM and NFI Magna Polonia. The President of UOKiK stated that two companies – PTC and Polkomtel – may have hindered the inspection operations and she decided to initiate proceedings in order to impose financial penalties on the undertakings.

It was found that Polska Telefonia Cyfrowa hindered the inspecting party to access the premises and to commence inspection activities without delay. Although the employees of UOKiK submitted their authority to perform inspection with search (inter alia the court authorisation) to the company workers, they were entered to the company’s offices after over an hour of waiting by the reception desk.

According to the regulations, along with filing the relevant authority, the employees of the Office should have access to all rooms of the undertaking’s premises and all objects, documents and data carriers concerning the subject of inspection. Moreover, the inspecting party should be provided with appropriate conditions for performing the operations, e.g. they should be provided access to the specially separated room and means of communication.

Impeding the commencement of inspection might have had significant influence on the conducted explanatory proceedings as regards the conclusion of competition- restricting agreement on mobile television service. The element of surprise during the inspection is the key issue for collecting evidence.It is so because the Office focuses on acquiring unofficial information, such as e-mails or private notes rather than documents (such as invoices or financial statements) the company is obliged to store under separate regulations. Therefore, hindering or causing delay in the commencement of inspection operations under law, may enable the company to obliterate incriminating evidence or to prepare statements to be submitted to the inspecting party. Punctual commencement of inspection is especially important in the case of simultaneous inspections in premises of several entities.

According to the President of UOKiK, Polska Telefonia Cyfrowa intentionally caused delay in performing the inspection, neglecting its duties at the same time. Although UOKiK employees submitted all authorities necessary for the commencement of inspection, they were unable to enter the undertaking’s offices and perform the activities for a long time.

For failure to collaborate during an inspection with search, Polska Telefonia Cyfrowa was fined PLN 123 million. The decision is not final. The company may appeal to the Court of Competition and Consumer Protection. Proceedings on imposing a fine on the second undertaking charged with hindering inspection operations – Polkomtel – is still conducted.

Inspection with search is not often applied by UOKiK. It is, however, helpful in obtaining important evidence. Thanks to this method, information and documents providing evidence of the collusion of cement producers were collected. It was therefore possible to break a cartel lasting for many years. It is also worth mentioning that, in the EU case law, procedural irregularities as regards inspecting operations are considered serious and are severely punished. The EUR 38 million fine imposed by the European Commission in 2008 on E. ON Energie for breach of a seal in the company premises can be given as an example.

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 60 430
faks (+48 22) 826 11 86
E-mail: [SCODE]bWFsZ29yemF0YS5jaWVsb2NoQHVva2lrLmdvdi5wbA==[ECODE]