Compliance and competition law | In Principle

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Compliance and competition law

A competition compliance programme should protect an undertaking against commission of violations prosecuted by the competition authority. This applies to anticompetitive arrangements between competitors, or between suppliers and distributors, as well as abuse of a dominant position. Such infringements are threatened by punishment of up to 10% of an undertaking’s annual turnover.

In the case of anticompetitive arrangements, a compliance programme may also reduce the risk of breaking the law by corporate management and the related personal liability of managers (risk of a penalty of up to PLN 2 million).

Companies may wonder whether the Office of Competition and Consumer Protection (UOKiK) will treat implementation of a compliance programme as a mitigating factor when imposing fines. To date UOKiK has not been willing to admit that the use of a compliance programme can lead to reduction (or waiver) of penalties. But the rationale for this approach is worth considering. It is supported by two arguments.

First, in decisions issued to date, UOKiK has not analysed the impact of applying a compliance programme on a manager’s personal liability for allowing an infringement of competition law. The view should be supported that the use of effectively and properly organised compliance programmes may be a condition excluding the personal liability of managers. This is because such liability arises when a manager has knowingly caused a violation. A truly functioning compliance programme in which the manager has actively participated may demonstrate that even if a violation occurred, it was not knowing on the part of the manager. This could rule out personal liability.

Second, an examination of the activity of the competition authorities in countries such as France, Italy and the UK shows that they do not rule out treating implementation of a compliance programme as a factor mitigating or even excluding liability. Indeed, the Italian authority stated that an authentic compliance programme will reduce the scope of an undertaking’s liability.

It should be recognised that an authentic compliance programme is one that:

  • Is actually followed
  • Is consistent with European and national best practice
  • Ensures full, genuine and concrete engagement of managers
  • Appoints a responsible person
  • Identifies antitrust risks reflecting the nature and context of the undertaking’s operations
  • Provides for the conduct of regular training
  • Contains incentives to follow the programme
  • Contains means discouraging violation of the programme, and where
  • Compliance with the programme is monitored and audited.

On the other hand, it is argued that a poorly conducted compliance programme may lead to an increase in fines if it functions as a tool for teaching how to avoid responsibility (for example, to ensure that conspirators cover their tracks).

Dr Antoni Bolecki, attorney-at-law, Competition practice, Wardyński & Partners