Götz Drauz - Deputy Director General of the Directorate General of Competition of the European Commission is a guest of honour at the conference “Concentration Control in Poland and the European Union - New Approach”. The event will be an opportunity to exchange views on issues that are important for the economy and related to competition policies and directly - to the European model of administrative control over mergers and acquisitions

All actions undertaken by antimonopoly authorities in the defence of competition de facto serve consumers. It is only in an environment of market competition of many enterprises that lower prices and a more abundant offer of goods and services are possible.

One of the ways to restrict competition is merger of enterprises with the emerging entity with such market advantage that enables it to function independently from other companies functioning in the same sector as well as contractors and consumers. This trend towards construction - by way of mergers and acquisitions - of supranational conglomerates is reinforced with globalisation processes, abolishment of barriers in trade and flow of foreign investments, establishment of an internal market, currency union and expansion of the EU. From this stems the great importance of preventive control of mergers that allows to regulate concentration processes in the economy and thus exert influence on market structure and intensity of competition.

In Poland, consent for concentration of enterprises with joint sales of equivalent of over EUR 50 000 000 is issued by the President of UOKiK. Only EU-wide transactions are reviewed by the European Commission. Since May 2004, the rules of reporting concentration intentions have changed - this is connected with the reform of the European competition law, which has adjusted the EU system of merger control to the new economic and technological environment. Globalisation and increasing concentration in world economy, result in a necessity to allow more economic analysis when issuing decisions on a harmful character of transactions to competition. Therefore, a modification was made to the compliance test of each contemplated merger with the Common Market - thanks to this the EC may block concentrations, which even not leading to the emergence of a dominating entity, may be harmful to competition. The growing importance given to economic analysis in antimonopoly policy is manifested in the creation of the post of Chief Economist in the Competition Directorate General of the European Commission. At UOKiK the function is performed by the Market Analysis Department, whose role is expected to grow in the near future.

There has been a major change in the approach to concentration control after the reform of the European competition law, consisting in taking into consideration also the resultant efficiencies. The antimonopoly authority may agree to a merger of enterprises in result of which efficiencies (e.g. technological progress) will outweigh the deficiencies to competition.

The evolution of the European and global law on mergers is going into the direction of doing away with unnecessary administrative burdens to the enterprises. Therefore, in the amended Act on competition and consumer protection there is no longer the rule, that the notification of the planned concentration should be reported in the obligatory seven-day period. It is only rational to leave the decision to the enterprise. There is no penalty for failure to notify the concentration intention. Thus, a penalty applies only to a merger without the consent of UOKiK and not the failure to notify the Office about it.

Polish antimonopoly law provides a fine of up to 10 percent of joint revenues of enterprises merging without consent of UOKiK. Besides, if restoration of competition is no longer possible, the President of the Office may order the merged enterprise to split up or to sell all or some of its assets. Such decisions have been issued in case of local press in Lower Silesia (take-over by Polskapresse of direct control over Dolnośląskie Wydawnictwo Prasowe, and in result the company became owner of three local newspapers in the region and its market share grew from 36.4 to 60.8 percent) and in Wielkopolska (illegal purchase of “Gazeta Poznańska” by the publisher of “Głos Wielkopolski” resulting in a strongly dominating position by the publisher and thus a severe restriction to competition).

Last year UOKiK reviewed 194 cases concerning mergers and acquisitions.

Additional information:
Elżbieta Anders, Spokesperson of UOKiK
International Relations and Communication Department
Office of Competition and Consumer Protection
Pl. Powstańców Warszawy 1, 00-950 Warsaw
Ph.: (+48 22) 827 28 92, 55 60 106, 55 60 314
E-mail: [SCODE]ZWFuZGVyc0B1b2tpay5nb3YucGw=[ECODE]