On April 15, 2020, the Chair of the Polish Competition and Consumers Protection Authority (UOKiK), Mr. Tomasz Chróstny, delivered a speech defining UOKiK’s main focus areas amid the coronavirus disease 2019 (COVID-19) epidemic. In a 90-minute address, Mr. Chróstny defined the areas of particular attention for UOKiK in the wake of the COVID-19 crisis.
Counteracting Delayed Payments
Providing enterprises with sufficient liquidity while on lockdown and mitigating lockdown ramifications is among the Polish government’s primary objectives. The government, through state-controlled companies, made available a plethora of loans and other instruments to secure such liquidity. The UOKiK Chair stressed that it will now, in cooperation with other agencies and authorities (including, chiefly, the National Revenue Administration), pay particular attention to counteracting payment delays. Since January 1, 2020, UOKIK has the power to investigate, ex officio, and penalize certain material breaches of the Act on Counteracting Excessive Delays in Commercial Transaction (implementing the EU Late Payment Directive of 2011) and securing the right of creditors in commercial transactions to receive timely payment. While enforcing the Late Payment Act, UOKiK may impose financial penalties on the entities committing certain breaches of the Late Payment Act. The UOKiK Chair emphasized that the enterprises receiving government may not be allowed to use such liquidity in order to secure their position while defaulting on payments to their creditors.
UOKiK further stressed that the current crisis may weaken the position and valuation of numerous businesses in Poland and that such businesses may fall victim to either unfair competition practices or attempts at “hostile takeover” bids, leading, in effect, to market distortions and loss of competitiveness by Polish enterprises and the Polish economy in general. It was also noted that this problem has been recognized by many member states governments and the European Commission itself, which has voiced its concerns of the European strategic assets and technology being “sold-off” to foreign, non-EU investors. UOKiK made a point saying that it will take into account the purpose of the notified transactions and their effects on the Polish and EU markets, not only in terms of existing competition, but also in light of further-reaching effects. In practical terms, it may mean that UOKiK might also analyze the substance of the notified transactions from this angle. It is also likely that UOKiK will propose new legislation to be enacted by the Polish legislator in order to assure protection of the Polish firms weakened by the COVID-19 crisis.
Assessment of Concerted Practices
Counteracting the COVID-19 epidemic may require closer cooperation among entrepreneurs. In certain cases, such cooperation may raise certain competition law concerns. The Polish competition law (like that of the EU) does not provide for UOKiK issuing any kind of formal assessment of such cooperation, making enterprises responsible for proper self-assessment of cooperation and assuring that the conditions for exemptions are met. This may pose certain risks for undertakings and, in order to address this, the European Commission has issued a Communication providing general guidelines on the assessment of such cooperation and for the possibility of issuing “comfort letters” to entrepreneurs, assessing their cooperation from the point of view of competition law. UOKiK does not see the need to issue any general guidelines, since the Polish law provides for the necessary exemptions; however, there is a possibility of UOKiK issuing informal interpretations. It was further assured that the efforts leading to either creating new supply chains or supporting existing ones will be encouraged.
New Tools and Methods
It was also stressed that UOKiK will proceed with digitization, not only moving from paper to e-documents, but also in gaining better access to information gathered in various databases maintained by public agencies. UOKiK intends to make better use of such data in order to expedite proceedings and assure better decision-making based on a wider array of data. Noting that lengthy proceedings very often weaken their effect, UOKiK will now put more emphasis on less formal methods other than instigating formal proceedings, such as letters to entrepreneurs pointing-out potential breaches, phone calls and measures other than formal proceedings. The purpose of such soft measures is to induce the addressee to cease practices viewed as breaching the law, thus nipping them in the bud without instigating formal proceedings. This does not mean that UOKiK will not intervene with full force when the situation so requires.
The Polish version of this article is also available to view online: WERSJA POLSKA