Status of bill to amend the Act on Competition and Consumer Protection | In Principle

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Status of bill to amend the Act on Competition and Consumer Protection

Comment and consultation on the proposal are drawing to a close.

The guidelines for a bill to amend the Act on Competition and Consumer Protection, developed by the Polish competition authority in 2007, were adopted by the Polish government in November 2012. In December, the Government Legislative Centre published a draft of the amending act, and the period for public comment and inter-ministerial consultations on the proposal began.

The amendment is designed to strengthen the system of protection of competition and consumers in Poland, increase the effectiveness of the regulations currently in force (particularly in combating cartels), simplify procedures (particularly for merger review), and eliminate doubts in interpretation arising in application of the current regulations. Additionally, as the Office of Competition and Consumer Protection (UOKiK) originally stated in 2007, “the proposal will place particular stress on reinforcing guarantees of the rights of businesses by, among other things, clarifying the regulations on the rights of parties to proceedings, introducing new regulations envisioning an active role in the proceedings, and shortening and simplifying the section of the procedures applied in proceedings before the President of UOKiK.” However, it is clear that the main goal is to increase the effectiveness of the competition authority itself.

Most important from the point of view of M&A transactions is the set of changes concerning merger review. The regulations in this area are to be overhauled by introducing a two-stage procedure, which should reduce the duration of proceedings in the case of simple concentrations and enable more careful analysis of applications involving complicated concentrations. Currently, as a rule, the proceedings should be completed within two months, regardless of the complexity of the case. Based on its own experience under current practice and comments from the business community, UOKiK determined that two months is too long for simple transactions but too short for thorough consideration of complicated cases. If the proposal is implemented, the period for completion of the merger review procedure for cases which do not raise doubts on the part of UOKiK with respect to restrictions on competition will be 30 days. This would be the period for issuance of a decision at the first stage. An additional four months would be provided for more complex cases.

In complex cases and those where there is a likelihood that UOKiK will issue conditional approval or prohibit the concentration, the office would share its competition concerns with the applicant when passing to the second stage.

Under the proposal, in the case of issuance of conditional approval for a concentration the competition authority could order that the deadline for fulfilment of the conditions imposed be kept confidential.

The other changes involve such matters as leniency procedures (with introduction of “leniency plus,” an opportunity to notify UOKiK of other anti-competitive arrangements), imposition of fines (of up to EUR 500,000) on management for the firm’s participation in illegal arrangements, settlement with UOKiK on fines, introduction of non-monetary remedies to limit or eliminate the effects of prohibited practices, and provisions on searches and inspections, including provisions concerning attorney-client privilege.

The deadline for submission of public comment on the proposal was 17 January 2013, but some organisations requested an extension (e.g. the Competition Law Association was given until 7 February to submit its comments). Meanwhile, a conference was held on 22 January to discuss the conclusions from inter-ministerial consultation. It is anticipated that the bill will be approved by the government within the next few months.

Marcin Kulesza, Competition Law Practice, Wardyński & Partners