Amendments to the Competition and Consumer Protection Act - management liability.

On 18 January 2015 amendments to the Competition and Consumer Protection Act came into force, which, inter alia, modify the rules on liability for restrictive practices. As the amendments translate directly into liability of enterprise management personnel for potential breach of competition law, we would like to draw your attention to the scope and rules of this liability, the legal and business implications and the need to make changes to current compliance policy.

Key amendments
- scope of liability for concluding restrictive agreements is extended to cover enterprise management
- penalties of up to PLN 2 million may be imposed on enterprise management
- limitations period for restrictive practices is extended from 1 to 5 years
- UOKiK (Competition and Consumer Protection Office) will be able to specify how the effects of unlawful activities are to be eliminated
- changes are made to leniency programmes
- plea-bargaining is introduced

Practical effects for entrepreneurs

If UOKiK deems any practice carried out by an entrepreneur as a cartel, liability could be borne not only by the entrepreneur but also by the management board and management personnel at various levels of the organisation and in different operational areas. Charges can be brought up to 5 years from the end of the year in which anti-monopoly practices are ceased even if a person is no longer involved with the entrepreneur.

For UOKiK to bring charges effectively against a person managing an enterprise,  the intent of its actions would have to be demonstrated and extenuating circumstances (co-operation with UOKiK, redress of effects of breach) and aggravating circumstances (initiating the cartel, gaining material benefits from the cartel) would influence the final penalty. An interpretation of conditions and rules of liability is also of key importance, as which actions taken by management will be deemed breach of the law may sometimes depend thereon.

DZP's recommendations
- analysing the areas of an entrepreneur's operations that the changes could affect and indicating key risks relating to the entrepreneur's day-to-day operations
- identifying the effects of liability for anti-competitive actions taken by an enterprise on its management
- indicating the effect of the amendments for the purpose of modifying internal supervision procedures and communication and making them unassailable, including the necessity of imposing new obligations on management
- specifying the rules for proceeding in crisis situations (anti-monopoly proceedings being initiated by UOKiK) and preparing management in professional terms for participating in potential administrative proceedings.

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