Establishment by associations of undertakings of minimum and fixed prices for services is prohibited. Every year UOKiK issues several decisions confirming the use of such practices. The latest refer to tour guides and real estate industry. Foreign authorities also issue similar decisions

Agreements of undertakings involving fixing prices of goods or services are the most serious breaches of competition law. For consumers this means the inability to pay for goods and services cheaper than it has been imposed by the association of undertakings

Agreements of undertakings involving fixing prices of goods or services are the most serious breaches of competition law. Associations of undertakings - such as unions, chambers of industry and professional local governments also cannot do that. Prohibited are both price-related agreements between them, and any resolutions or other documents that include minimum or fixed rates for services provided by members of a particular association. In a free market economy, market participants must individually determine the rates charged for services or goods on the basis of their economic calculations.

Because associations of undertakings usually comprise many undertakings, and sometimes even all the companies providing specific services on the relevant market, establishing their rules of behavior applicable to their members, which may affect the state of competition, such as agreeing on pricing policies of their members, may result in the elimination of competition in a substantial part of the market. For consumers this means the inability to pay for goods and services cheaper than it has been imposed by the association of undertakings.

Each year the Office of Competition and Consumer Protection issues several decisions confirming infringement of competition by associations of undertakings. In 2010 there were three such decisions issued. They concerned the Polish Journalists Association, National Council of Notaries and Beskidzka Chamber of Craft and Entrepreneurship. On the other hand, from the beginning of 2011 UOKiK confirmed application of similar practices twice, and five antitrust proceedings are pending.

The first decision concerns the agreement between the Polish Federation of Real Estate Professions Associations, the Polish Real Estate Federation and the Polish Federation of Real Estate Managers. These are some of the federations operating in Poland, covering voluntary associations of specialists in professions related to real estate. By law, they organize apprenticeships in the property trade and management. Participation in them is obligatory to obtain a professional license.

The Office found that in February 2008, the federations have agreed to jointly introduce an additional fee of PLN 250 charged to persons undergoing the apprenticeship - for confirming the conditions of apprenticeship, checking the practical preparation for the profession and making report of these activities. The agreed rate was not based on any legislation, and its joint implementation in the agreed amount meant that associations did not have to compete with each other about candidates to the profession, who in turn had a limited choice of prices of apprenticeship organizers. It is worth noting that UOKiK did not question the fee - but only a common setting in the same amount.

For participation in the competition-restricting agreement, the President of UOKiK charged the participants with fines: PLN 46,628.24 for the Polish Real Estate Federation, PLN 3,709.01 for the Polish Federation of Real Estate Professions Associations and PLN 1,816.37 for the Polish Federation of Real Estate Managers

In the course of the proceedings only the Polish Federation of Real Estate Managers ceased the unlawful practice and lowered the rate, while the Polish Real Estate Federation and the Polish Federation of Real Estate Professions Associations still continue to charge a fixed fee.

For participation in the competition-restricting agreement, the President of UOKiK charged the participants with fines: PLN 46,628.24 for the Polish Real Estate Federation, PLN 3,709.01 for the Polish Federation of Real Estate Professions Associations and PLN 1,816.37 for the Polish Federation of Real Estate Managers.

When establishing the amount of financial sanctions, the President of UOKiK took into account that there was an agreement between the competitors, which is considered the most serious breach of competition. The lower penalty for the Polish Federation of Real Estate Managers was due to the fact that as the only collusion participant it ceased to apply fixed fee and cooperated with the Authority during the investigation. PFZN submitted an application to grant immunity from financial penalty under the leniency programme. Because the evidence was previously known to the Office and did not contribute anything new to the case, the undertaking could not be covered by the leniency programme. However, it was treated as mitigating circumstances.

The decision is not final. The Polish Real Estate Federation and the Polish Federation of Real Estate Professions Associations appealed against it to the Court of Competition and Consumer Protection.

In addition to the agreement between associations of undertakings, it is not permitted to consolidate prices by resolutions or other deeds of a trade union. The Office confirmed application of this practice by the Center of the Tatra Guides (CPT) – union of Tatra guides associations. According to the information obtained by UOKiK, since 2000 the Center Council fixed the minimum suggested rates for tour guides. For example, in 2010, a four-hour trip in Zakopane and Podtatrze with a guide could not cost less than PLN 300, and the price of the expedition to Kasprowy or Giewont was at least PLN 550. As a result, the tourists were not able to pay cheaper for tour guides, who referred to the price list during the negotiation of rates. In its decision, the President of UOKiK ordered the Center of the Tatra Guides to cease applying practices restricting the competition and imposed a financial penalty amounting to PLN 1,000. The low financial sanction was caused by e.g. the specific activity of CPT, which is not focused on business conduction and revenue achievement.

The decision is final. CPT did not appeal against it.

Restricting competition by associations of undertakings does not only happen in Poland. A similar problem is faced by other European countries. For example, the Norwegian competition authority fined association of undertakings involved in the renting of buses. The trade journal published a pricing model, containing e.g. the rates per journey kilometer. Furthermore, in Finland the unlawful practice was discovered, applied by the association of hairdressers/barbers, and in Germany the prices were established by the ironworkers union.

Additional information for 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
faks  +48 22 826 11 86
E-mail: [SCODE]bWFsZ29yemF0YS5jaWVsb2NoQHVva2lrLmdvdi5wbA==[ECODE]