Despite the enforceable decision by the President of UOKiK, PKP Cargo still abuses its dominant position by differentiating its contractors unlawfully. The company was fined with PLN 1.7 mln

PKP Cargo is the leading rail freight carrier in Poland and overwhelms its competitors on domestic market.

Under antymonopoly law dominant undertakings are not allowed to abuse their market position. Applying onerous and not homogenous contract terms, which results in varied competition among contractors, constitutes a prohibited practice. In December 2004, the President of UOKiK decided that such practice was applied by PKP Cargo towards undertakings it rendered transport services under the so-called long-term contracts. The Office stated that the company had abused its dominant market position by failing to treat equally its business partners of similar trading and weight of carried goods (PKP Cargo differentiated discounts for carrying hard coal and conditions regarding the change of declared weight of carried goods). The President of UOKiK ordered the undertaking to cease the contested practice and imposed a fine amounting to PLN 20 mln.

The company ineffectively appealed against this decision to courts of all instances. In November 2008, the decision came into force and as a consequence the undertaking incurred the fine imposed beforehand. Earlier, in July 2007, the Court of Competition and Consumer Protection complied with the appeal lodged by one of competitors to PKP Cargo and made the judgement immediately enforceable. Since then a carrier should discontinue the contested competition-restricting practices. For this reason the entity was obliged to apply contracts which do not impede competition and produce annexes to the previously entered agreements so as to treat all contractors equally. According to the President of UOKiK, two months’ time was long enough to change the challenged practice.

After the decision had become effective, the Office verified its execution. Conducted proceedings including a thorough market analysis towards the market position of PKP Cargo revealed that the carrier failed to execute the final decision. The company ceased to enter into new contracts on conditions challenged by the President of UOKiK, however, other long-term agreements concluded beforehand (containing clauses which were regarded as competition-restricting practice and remained unchanged) were still in force. The undertaking kept giving different unjustified discounts and differentiated conditions regarding the declared weight of carried goods to undertakings of similar trading and weight of carried goods. The President of UOKiK decided that PKP Cargo executed the decision in entirety only at the end of 2011.

The financial sanction imposed for failure to execute the decision of the President of UOKiK is EUR 10 thousand per each day of delay. Last year there were only seven cases of non-execution of decision by the President of UOKiK in due time. The fine imposed on PKP Cargo exceeded PLN 1.7 mln (PLN 1 785 557,65) which is the equivalent of EUR 404 265,00. The decision is not final and may be appealed to the court.

Additional information for the media:
Małgorzata Cieloch, Spokesperson for UOKiK
Department of International Relations and Communication
Pl. Powstańców Warszawy 1, 00-950 Warszawa
Phone: +48 22 55 60 106
Fax: +48 22 826 11 86
E-mail: [SCODE]bWFsZ29yemF0YS5jaWVsb2NoQHVva2lrLmdvdi5wbA==[ECODE]