NEWSLETTER COMPETITION 7/2018

PRIVATE CLAIM FOR DAMAGES DUE TO VIOLATION OF COMPETITION LAW

Violation of competition law is usually associated with the activities of the UOKiK’s President. However, in the majority of cases the decisions made by the Office do not have a direct impact on the interests of the most injured parties, i.e. competitors, contractors or consumers.  It is worth mentioning that the parties injured by anti-competitive actions – e.g. due to application of excessive prices by the cartel – can seek compensation from the participants in the collusion.

Much facilitation has been made in this regard by the act on claims for compensation for violations of competition law of 21 April 2017. Before it came into force (i.e. before 27 June 2017), one could seek compensation from the entity which violated competition law, yet it entailed many difficulties. The implementation of the new regulation has made the process considerably easier.

Firstly, anyone who has suffered damage due to violation of competition law may now seek for compensation – a consumer, contractor or even a competitor of the breaching party. It also means that anyone can make use of facilitations provided for by the Act.

The presumption that the violation of competition law causes damage is of great importance for the injured party. Accordingly, the client or the contractor of the cartel’s participant does not have to demonstrate that he has incurred damage and may focus on evaluating its magnitude. It is the sued business that – in order to avoid liability – has to prove its innocence and that its action did not cause any damage . It is a crucial facilitation for those who seek compensation, especially in cases where there was no decision by the UOKiK’s President.  

However,  if the UOKiK’s President has already made a decision in the case and it is binding, then the court before which the case is brought has an easier task. For the court is bound by the findings contained in the decision of the UOKiK’s President, i.e. on the existence of the violation, the participants of the forbidden agreement, the scope of the agreement and its duration. This significantly shortens the whole evidentiary process. In this case, the court’s task will be only (or as much) to ascertain the damage and the causal link between the violation and the damage.

Determinig  the magnitude of the damage usually constitutes the most difficult part of the process. The Act provides the injured party with several tools to help in evaluation of the extent of the damage. First of all, the court before which the case is brought may request the assistance of the UOKiK’s President or the competition authority from another Member State in evaluating the magnitude of the damage. Moreover, the injured party may ask for a disclosure of the evidence contained in the files of the case brought before the UOKiK’s President. The court may order a disclosure of requested documents or information.

The court can also estimate the extent of the damage, provided that the damage was caused to the injured party and the exact determination of the magnitude of the damage is practically impossible or excessively hampered on the basis of evidence available.

Although the Act has been in force for one year, there have been no media reports of any spectacular cases in which the Act was applied. However, it may be of substantial help for injured parties, especially when the anti-competitive practices have lasted for several years or have covered a very broad market.

CASE LOW: COLLUSION ON THE FITNESS MARKET AND THE FIRST PROCEEDING OF THE UOKiK’S PRESIDENT AGAINST MANAGERS

The UOKiK’s President has recently published a statement in which he suspects that the anti-competitive agreement has been concluded on the fitness market. The Polish Anti-competitive Authority proceeds for the first time not only against businesses, but also against their managers.

The agreement has allegedly been concluded between 16 businesses that are active on the sports and recreational market. Fitness clubs have allegedly split the market between them in a way that some chains opened their new branches only in particular cities. Additionally, there may have been a collusion aimed at eliminating the competitors of Benefit Systems S.A. from the market. Fitness clubs were to refuse cooperation with businesses which offered packages of sports and recreational services regarded as competitive towards MultiSport card.

The initiation of proceedings against six managers of the conspiring companies is unprecedented.  Even though UOKiK has had such powers since 2015, it was only this year that it had been exercised. The maximum penalty which the managers face is PLN 2 million.

The proceedings may influence a very wide range of businesses. It is becoming a standard that the employers offer their employees access to one card that allows them to use plenty of sports facilities in a given place. Many other markets decided to follow in the sports market’s footsteps. Any potential division of the market may have entailed the situation in which the consumers would be those the worst affected – the offer of the clubs available became considerably limited. The elimination of the competitors could have had influence e.g. on the prices which they had to pay employers in return for obtaining the card.

The UOKiK’s President will only prejudge in the final decision whether the anti-competitive agreement has been in fact concluded. However, iIf the Anti-competitive Authority is correct in its assumptions, the businesses risk not only the liability under the Competition and Consumer Protection Act, but also damages claims lodged by the injured parties, i.e. competitors, employers, fitness clubs or the employees themselves.

 

Poprzedni artykuł
Następny artykuł