Poland: Brand new powers for the Polish Competition Authority?

06 July 2015

Krzysztof Korwin-Kossakowski

The Polish government is currently working on further amendments to the Competition Act. This time amendment is aimed at strengthening the powers of the Competition Authority in its fight against practices which infringe collective consumer interests, and the use of unfair clauses in consumer contracts. If the amendments are passed in their present form they will have an impact on many fast moving consumer goods companies, e.g. those offering online grocery services.

Despite the quite recent changes to the Polish Competition and Consumer Protection Act, which entered into force on 18 January 2015, the Polish Government is currently working on yet further amendments to the Act. The draft amendments were published on 16 June 2015 (the "Amendments").

Work on the Amendments began mainly because of the overflowing register of unfair clauses. In Poland any consumer facing company can be sued in relation to its Terms & Conditions by any association or other non-profit organisation established to protect consumer rights in order to obtain a ruling stating that a particular clause is unfair. Unfortunately, the register of unfair clauses has become a victim of its own success since it now contains more than 6,000 different clauses.

The Amendments have two main aims:

  1. Strengthening the powers of the Competition Authority; and
  2. Changing the system of regulation of unfair clauses.

To achieve the first aim, the Amendments propose a number of new powers for the Competition Authority as follows:

  • searches in a company's premises in case of suspected practices which infringe collective consumer interests;
  • sting operations for where it is suspected that certain goods/services sold violate collective consumer interests;
  • publishing "warnings" on public TV and radio concerning acts that can threaten consumer rights;
  • presenting courts with opinions concerning consumer protection in cases where the Competition Authority deems it in the public interest;
  • issuing interim decisions in proceedings concerning practices alleged to infringe collective consumer interests. Such decisions could oblige companies to cease certain actions possibly infringing collective consumer interests. These would be issued discretionarily by the Competition Authority with no right to appeal. However, any interim decision would only have authority up to the issuance of the final decision.

To achieve the second aim, the Amendments grant furthers powers for the Competition Authority to execute the ban on the use of unfair clauses, as follows:

  • The Competition Authority will be able to declare clauses unfair (and to ban their use) by way of administrative decision without the need for any court order. By such decision the Competition Authority could order a company to remove the effects of breaching the ban, by:
    • informing consumers that the clause is unfair, or
    • by way of statements as indicated by the Competition Authority.

The Amendments transfers regulation of unfair clauses to the Competition Authority, from a special Division of the Regional Court in Warsaw - the Court of Competition and Consumer Protection. Currently, only that court has the authority to recognise a specific clause as unfair and thus not binding on a consumer. Once a specific clause is recognised as unfair each common court then applies that decision on a case-by-case basis. If the Amendments are passed, the Regional Court in Warsaw would serve as the appeal court instead.

  • The Competition Authority would be able to impose fines on companies breaching a ban against use of any unfair clauses (up to € 10,000 for each day of delay in complying with the decision referred to above).

The Amendments also determine the effect on the clause being deemed as unfair. According to the Amendments, decisions concerning the unfairness of a certain clause would be effective between the company and all the consumers who entered or will enter into the contract.

The Amendments, which may have a significant impact on Polish consumer law, are still in the early stages of consultation and have not yet been discussed by the Council of Ministers. It remains to be seen whether the current Parliament (and Government) will have enough time to pass the Amendments into legislation. The current Parliament's term expires in in October but Poland has seen bills passed in less than four months. Will the Amendments be important enough? Only time will tell.