UOKiK publishes its guidelines on the principles of imposing fines on managers

By Piotr Dynowski, Marcin Alberski

08-2020

The Polish Competition and Consumer Protection Act foresees that sanctions for implementing anticompetitive agreements may be imposed on companies and their managers. In fact, managers who have intentionally permitted their company to engage in such practices can face a fine of up to PLN 2 million (EUR 445,000).

On 30 July, 2020 the President of the Office of Competition and Consumer Protection (“UOKiK”) published its Guidelines on the method of setting fines imposed on managing individuals pursuant to Article 106a and 111 of the Competition and Consumer Protection Act. The guidelines are available at the UOKiK’s website (in Polish).

Below, we discuss the details of the principles of imposing fines on managers, as well as the practical implications of these guidelines on the UOKiK's current investigations.

The scope of managers' liability

Under Article 106a of the Act, the UOKiK may impose a fine on a managing person (a manager) in an amount up to PLN 2 million if that person intentionally permitted (by action or omission) their company to breach Article 101(1) TFEU or its Polish equivalent.

Such a fine may be imposed on a manager only in a decision imposing a fine on his or her company.

Under Article 4(3a) of the Act, a manager is defined as a person managing an enterprise, in particular a member of the management body of a company or a person in a managerial position. Unfortunately, this definition leaves the UOKiK with a wide margin of discretion.

Principles for determining applicable fine

To make sure that any fines imposed are proportionate and deterring, the amount of a fine is determined in several stages involving the following circumstances.

1. UOKiK will take into account the nature of the infringement (its severity, consequences, and scale).

On that basis, they will establish a base amount which will be used to further determine the amount of the fine. Depending on the severity of the infringement, the base amount can range from PLN 10,000 to PLN 300,000. 

The UOKiK is said to rigorously deal with agreements between competitors (e.g. cartels, bid rigging) but also certain categories of vertical agreements (e.g. practices leading to the setting of minimum resale prices, agreements restricting passive sales).

2. Another prerequisite for determining the fine amount is the manager's impact on (involvement in) the infringement.

3. The UOKiK will take into account aggravating and mitigating circumstances. The former include, for example, the role of the organiser, the significant benefits obtained by the manager, exerting pressure on others to commit the infringement, as well as any previous record of a similar infringement. Mitigating circumstances include the fact of being coerced to participate in the infringement, or cooperating with the UOKiK during the proceedings.

4. The fine amount will also be affected by the duration of the infringement.

5. The UOKiK will also investigate whether the manager has previously breached the Competition and Consumer Protection Act (recidivism).

6. Finally, the UOKiK will verify whether the fine amount is adequate to the manager's income. The guidelines do not, however, specify whether the manager's income from the time of the infringement to the time of the fine will be verified.

All these stages are aimed at issuing a decision in which the fine imposed will be fair and will not exceed the maximum fine of PLN 2 million (EUR 445,000).

Nevertheless, given the range of base amounts and multipliers specified in the guidelines, we believe that the UOKiK intends to impose significant fines on managers.

The leniency programme

Managers can avoid sanctions if they or their company submit a leniency application. To be successful, such an application must meet all the criteria specified in the Act.

Importantly, individuals who fully cooperate with the UOKiK may be granted full immunity or a reduction of the fine, even if the undertaking itself does not fulfill the conditions for lenient treatment.

Practical implications

Following the publication of the guidelines, we expect the UOKiK to shortly issue decisions in at least some of the 4 anti-trust proceedings in which it is currently investigating the liability of managers. These proceedings concern: 

(i) the suspected collusion between undertakings engaged in thermal energy production

(ii) the suspected collusion between DAF trucks dealers 

(iii) the suspected practice of imposing resale prices of dietary supplements

(iv) the suspected collusion between 16 undertakings, including a company offering corporate employee benefits and fitness club operators. 

For more information please contact Piotr Dynowski or Marcin Alberski.