March 2014
Practice Group(s):
Antitrust,
Competition & Trade
Regulation
By Marcin Trepka
On 19 February 2014, the second reading of the draft law on competition and consumers protection in the Polish Parliament was completed. The current shape of the proposed provisions does not essentially differ from the primary draft prepared by the Polish
Antitrust Authority. It seems that the main objectives of the draft law will be implemented, in particular, and for the first time under Polish law, there will be financial liability for chief executives for violations of competition law by their company. The penalties may be as high as PLN 2 million (approx. EUR 500,000) and will be paid personally by the individual. Also, individuals no longer with the company may be held liable if a breach occurred at a time when they were performing managerial functions.
The draft law continues to provide ambiguous provisions on the obligations and the protection of the rights of individuals subject to financial penalties. The definition of a person managing a company - constituting a non-exhaustive list – does not make clear on whom the penalty may be imposed - whether just the board of directors or other decision-makers at other levels within the corporate structure (e.g. senior management).
The responsibility of these people is not limited to the most serious infringements of competition law such as cartels, but also includes anti-competitive vertical agreements, which are very common in the economy (e.g. distribution agreements). There are increasing doubts regarding the lack of any regulation that would guarantee the right of individuals to remain silent in the event of an investigation carried out against them. This is a significant oversight, particularly in the context of the possibility of punishing the individual also for not providing information at the request of the antitrust authority punishable by up to 50 times the average monthly salary (approx. EUR 55,000). For the same breach, a company may receive a fine of up to EUR 50 million.
Also, the proposal of conducting one proceeding against a business and another against the individual by the authority, which is supposed to end with one decision, does not constitute a guarantee of respecting the protection of the rights of the individuals concerned.
The proposed regulation is raising legitimate concerns of businesses as well as legal groups and communities. For several years, a debate has been taking place over the shape of the proposed legislation. Despite a number of critical remarks in this regard, the proposed provisions remain largely unchanged. As recent 27 February 2014, the
Competition Commission of the International Chamber of Commerce (ICC) in Poland raised its voice. The Commission, in its official working document on the draft regulation, presented proposals which, if taken into consideration, would create a balance between the protection of the competition and the guarantee of the protection of the individual and business rights. The working document of the Commission provides among others

things: separation of the administrative proceedings conducted against the business and individuals, limitation of the individual’s liability only to cartels, guarantee to an individual of the right to remain silent, resignation of the obligation of the antitrust authority public warning about a suspicion of the use of practices infringing collective consumer interests before issuance of the decision. The full text of the positions is available at:
Regardless of the responsibility of the individuals, the proposed amendment includes other provisions that may raise legitimate concerns of businesses. In particular, they can be classified as: (i) withdrawal from the amendment provisions on the protection of the written communication between a client and a lawyer (legal professional privilege), (ii) the proposed scope of the settlements, (iii) the commencing of the five-year antitrust limitation period, or (iv) the obligation to inform the public about a business’s use of practices infringing collective consumer interests before a decision in the case.
Even though a considerable number of amendments to be introduced will contribute to the development and reach of competition protection (i.e. by improving merger control provisions, extending the deadline to appeal the decision to one month, providing leniency and leniency plus programs as well as the option to voluntary submit to a penalty for both businesses and the individuals enabling the reduction or complete withdrawal of the financial penalties) and are consistent with the EU competition law trends, in its current form the risks posed to both business and individuals are significant.
A good example of such risk is that on the basis of the proposed legislation, the antitrust authority will have the power to oblige a business in its decisions to undertake measures that would entrust performance of a certain economic activity, including the performance of this economic activity at different levels of the business operations, to different entities within the group or separate organizational units within the structure of the business. In other words, the antitrust authority will be able to order the business to ensure that the commercial activities will be conducted from now on by another company within the capital group that so far was only engaged e.g. in production activities.
Under the draft law, the new provisions on the liability of individuals will apply after the date of its entry into force. Any violation of competition law or any risk of such a violation should therefore be discovered before that date in order to take appropriate remedial actions. It will be also helpful to implement measures to guard against any possible future violations.
As a firm we frequently provide competition law training to companies and their senior management to ensure that they comply with competition laws and avoid incurring fines or other punitive measures which may be enforced in the event of a breach under national or EU laws. Please contact one of our partners in the Antitrust and Trade
Regulation Group to discuss this in more detail.
2

Author:
Marcin Trepka marcin.trepka@klgates.com
+48.22.653.4214
Contacts:
Marcin Trepka marcin.trepka@klgates.com
+48.22.653.4214
Lech Najbauer lech.najbauer@klgates.com
+48.22.653.4216
Anchorage Austin Beijing Berlin Boston Brisbane Brussels Charleston Charlotte Chicago Dallas Doha Dubai Fort Worth Frankfurt
Harrisburg Hong Kong Houston London Los Angeles Melbourne Miami Milan Moscow Newark New York Orange County Palo Alto
Paris Perth Pittsburgh Portland Raleigh Research Triangle Park San Diego San Francisco São Paulo Seattle Seoul Shanghai
Singapore Spokane Sydney Taipei Tokyo Warsaw Washington, D.C. Wilmington
K&L Gates practices out of 48 fully integrated offices located in the United States, Asia, Australia, Europe, the
Middle East and South America and represents leading global corporations, growth and middle-market companies, capital markets participants and entrepreneurs in every major industry group as well as public sector entities, educational institutions, philanthropic organizations and individuals. For more information about K&L Gates or its locations, practices and registrations, visit www.klgates.com
.
This publication is for informational purposes and does not contain or convey legal advice. The information herein should not be used or relied upon in regard to any particular facts or circumstances without first consulting a lawyer.
© 2014 K&L Gates LLP. All Rights Reserved.
3