Undertakings violating the collective consumer interests may be punished with fines - provides the amendment to the Act on competition and consumer protection. The Bill drawn up by UOKiK is now consulted with various institutions and ministries

One of the aims to amend the Act on competition and consumer protection by UOKiK is to adjust the Polish regulations to the requirements of the Regulation EC No. 2006/2004 of the European Parliament and the Council of 27 October 2004. The regulation provides i.a. establishing the European network of authorities dealing with the consumer protection. The aim of the network is cooperation in the field of counteracting the violation of interests of the weaker market participants at the cross-border level - i.e. beyond the territory of one Member State. In the network Poland will be represented by the President of UOKiK.

The amendment also introduces changes, which the Office deems necessary on the basis of its experience acquired so far. A turning point in Polish law will be possibility of imposing fines on entrepreneurs, who violate the collective interests of consumers. The present Act on competition and consumer protection does not provide such a possibility. The only provision of punishing such undertaking is when it does not comply with the binding decision of the Office. The entrepreneur may then have to pay a fine up to EUR 10 000 for each day of delay. The Bill provides that the President of UOKiK may impose financial sanctions for infringing the collective rights of consumers, as it is in the case of the antimonopoly practices. The maximum fine is 10 % of the entrepreneur's last year income. In the opinion of the Office, this amendment should contribute to more effective counteracting of the most common and serious cases in which the interests of the weaker market participants have been infringed.

The changes to the Act on consumer and competition protection are also intended to provide support to the regional consumer ombudsmen, who help the weaker market participants settle their individual complaints. Their competences include: counselling, interventions and mediations as well as assistance in bringing cases to court. According to the amendment 3/5 majority of votes of the statutory regional (municipal or county) council will be needed in order to dismiss the consumer ombudsman. UOKiK proposal intends to foster independence of ombudsmen and avoid their automatic replacement when political unrest occurs.

Furthermore, the Office proposals provide that the consumer ombudsmen in the cities with population exceeding 100 000 inhabitants will carry out their tasks with the support of their offices. Only a team of professionals will allow to use their competences in free counselling, as well as to represent consumers in their disputes with entrepreneurs. This is mainly the case of big cities where the level of consumer awareness is higher and therefore more interventions are undertaken.

The effectiveness of UOKiK is to be improved with elimination of the initiation of proceedings upon motion. At present, the Office is bound by the request of an entrepreneur or another applicant. Therefore, the proceedings cannot cover other practices which infringe competitiveness or collective interests of consumers. Most of the antimonopoly proceedings in UOKiK are instituted upon motion and large number of them terminates with the ruling that the law has not been violated.

The new Act replaces the motion scheme with a non-binding complaint mechanism. Therefore, the President of UOKiK will be able to initiate the proceedings also for the cases that are not objects of the complaint or to undertake measures, when the same case against the same entrepreneur has already been settled earlier. This will allow considerably reduction of a period for binding decision. Currently a case examined by the Court for Competition and Consumer Protection is resolved within 16 months on the average; whereas the Court of Appeal needs 11 months.

The amendment of the Act provides an increase of the turnover thresholds in the cases of concentration of entrepreneurs. If the participants of the transaction, e.g. of a merger or take-over, exceed these thresholds, they will be obliged to obtain the consent of the President of UOKiK. Under the current law, the transaction is to be reported to UOKiK only when the total turnover of the entrepreneurs who participate in the concentration exceeded the equivalent of EUR 50 million in the preceding year. In UOKiK opinion, only the largest concentrations should be controlled, as they seriously affect the market. Upon the amendment the obligation will apply only to the transactions carried out by the entrepreneurs who have achieved the total turnover that exceeded EUR 1 billion in the world or EUR 30 million in Poland.

Additional information:
Elzbieta Anders, UOKiK Press spokesman
Department of International Relations and Communication
The Office of Competition and Consumer Protection
Pl. Powstancow Warszawy 1, 00-950 Warszawa
Telephone: 22 827 28 92, 55 60 106, 55 60 314
E-mail: [SCODE]ZWFuZGVyc0B1b2tpay5nb3YucGw=[ECODE]