Changes to Polish Antimonopoly Law in a Nutshell

The Polish Office of Competition and Consumer Protection (Urząd Ochrony Konkurencji i Konsumentów, “UOKiK”) has recently published its 2015 annual report presenting its first experiences with the recent amendments to Polish merger control regulations. However, only future developments will show the effects of the new much more severe rules on cartel infringement proceedings and sanctions for cartel behaviour.

On 18 January 2015 far-reaching changes to the Polish Act on Competition and Consumer Protection (Ustawa o ochronie konkurencji i konsumentów), alternatively named “Antimonopoly Law” (prawo antymonopolowe), came into effect. These have been made to close previously identified gaps and strengthen competition and consumer protection. In addition to important changes with respect to merger control and anticompetitive practices, the Antimonopoly Law as amended has introduced changes that allow for more open dialogue between undertakings and the UOKiK.

Faster and more flexible merger control proceedings

According to UOKiK’s 2015 annual report the average duration of merger control proceedings could be reduced by half despite the fact that the overall number of merger control proceedings increased. The average duration dropped from 57 days in 2014 to 34 days in 2015. Of all merger control proceedings that UOKiK completed in 2015 only three (of 235) were Phase 2 proceedings. This can be explained by the following amendments introduced in early 2015:

  • A new two-stage merger control process: Phase 1 (1 month) and Phase 2 (4 months). The waiting period may be extended by UOKiK in the event that UOKiK requires additional information and documents from the parties;
  • New approach in case of competition concerns: UOKiK informs undertakings about its competition concerns so that they may alter the proposed concentration to alleviate UOKiK’s concerns, e.g. through adequate remedies;
  • Approach towards remedies: Undertakings may request UOKiK that it refrains from publishing in its decisions the deadline by which divestments must be made;
  • De minimis clause extended: mergers and the creation of joint ventures explicitly (just like acquisitions of control already under the old law) do not need to be notified to the UOKiK if the turnover in Poland of each of the parties to the transaction does not exceed the equivalent of EUR 10 million in each of the two financial years preceding the transaction. The de minimis clause also applies to concentrations whereby control and assets are being acquired simultaneously.

Effective fight against cartels

New rules for more effective fights against cartels have been introduced but could not yet show any significant effect in 2015. The number of started proceedings (from 87 in 2013 down to 34 in 2015) and of leniency applications (from 10 in 2014 down to 2 in 2015) has dropped. UOKIK explains the reduction in numbers with the application of its new “soft approach” that contains inter alia best practices and the authority’s possibility to request undertakings to voluntarily terminate an infringement and to apply its best practices.

Nonetheless, one should keep in mind the following amendments to the law:

  • New provisions concerning fines on individuals: individuals can now be fined up to PLN 2 million (approx. EUR 460,000);
  • Limitation period: the limitation period has been extended from one to five years following the cessation of the anticompetitive practice. Through this extension of the limitation period, there is now a higher probability that UOKiK will be in a position to unearth, prevent and punish cartel activity;
  • New provisions concerning leniency: (i) the introduction of leniency plus means that an undertaking may receive a reduction in fines of up to 30 percent for revealing another cartel, (ii) the obligation to end the anticompetitive practice starts with the leniency application (prior to the amendment it could have been continued until the actual presentation of evidence), (iii) even the ringleader of a cartel may apply for a full reduction of the fine that would otherwise have been imposed, and (iv) leniency applicants can benefit from fine reductions according to percentage bands (beforehand, leniency only led to a reduction of the fine’s ceiling);
  • New provisions concerning settlements: these provisions have been introduced in order to simplify and accelerate proceedings. Specifically, settlements may lead to reductions in the fine of up to 10 percent;
  • New provisions concerning behavioural and structural remedies: these new provisions are intended to more effectively eliminate the effects of anticompetitive practices;
  • New provisions pertaining to dawn raids: appeals can now be brought in the event that the rights of the dawn raid’s addressee or a third person are violated during a dawn raid; the appeal has to be filed within seven days after the unlawful action occurred; as a result of a successful appeal the relevant evidence cannot be used in the proceeding concerned or in any other proceeding.

Authority’s open and soft approach

The UOKiK has adopted a more open approach permitting undertakings to contact the authority directly. New clarifying notices have been drawn up with the purpose of facilitating dialogue between undertakings and the authority. Moreover, UOKiK has updated its guidance (i) on how fines are to be calculated, (ii) on leniency application procedures, (iii) on issuing the commitment decision, (iv) on UOKiK’s detailed statement of objections, (v) on publications concerning sector enquiries, (vi) on merger control notifications and (vii) on UOKiK’s rules for contact with enterprises (see most recent documents and older ones available in English). In 2017, UOKiK will again review the new rules in consultation with undertakings and if necessary amend the provisions accordingly.

FTC and DOJ Update Antitrust Guidelines for the Licensing of Intellectual Property

On January 13, 2017, the Federal Trade Commission (FTC) and the Antitrust Division of the US Department of Justice (DOJ) issued updated Antitrust Guidelines for the Licensing of Intellectual Property (the Guidelines). The revised Guidelines follow nearly half a year of consideration and public commentary. According to the FTC, the updates were “intended to modernize the IP Licensing Guidelines without changing the agencies’ enforcement approach with respect to intellectual property licensing or expanding the IP Licensing Guidelines to address other topics.” In that vein, the modest updates to the Guidelines affirm that the antitrust agencies still believe that IP issues do not require an altered analysis and that the licensing of intellectual property is generally procompetitive.”

Read the full article here.

Finally Implemented! The Italian Council of Ministers Approves a Legislative Decree Implementing the EU Antitrust Damages Directive

On 14 January 2017, the Italian Council of Ministers approved the Legislative Decree implementing Directive 2014/104/EU on certain rules governing actions for damages under national law for infringements of the competition law provisions of the Member States and of the European Union (the “Directive”). The final version of the Legislative Decree has not been published yet on the Official Journal. However, the key points emerging from it include:

  1. A strengthened mechanism of evidence disclosure in actions for damages related to alleged infringements of competition rules. In fact, the judge will have the power to request the defendant or a third party, including the Italian Competition Authority (the “Authority”), to disclose relevant evidence which lies in their control.
  2. The extent to which Italian courts will be able to rely on decisions of the Italian Competition Authority or other national competition authorities. For instance, an infringement of competition law ascertained by a decision of the Italian Competition Authority (or appeal judgment), which is not subject to further means of appeal, will be deemed to be indisputably established for the purposes of an action for damages brought before the national courts under Article 101 or 102 TFEU or under national competition law.
  3. The rules applicable to limitation periods for bringing actions for damages, as well as how Italian courts shall assess the joint and several liabilities of companies which are found to have infringed competition rules, and how they shall quantify the harm suffered as a consequence of the alleged infringements.
  4. The business sections of the courts of Milan, Rome and Naples, identified as the only competent courts for such actions for damages, including class actions.

According to the established Italian case-law, in case of actions for damages regarding alleged violations of competition rules, the judge shall use all available investigation means in order to address the obstacles faced by the claimant to access the relevant evidence in antitrust cases, and therefore apply broadly the rules on the disclosure of evidence and information requests (Corte Suprema di Cassazione, judgment no. 11564 of 4 June 2015).

On 26 November 2014, the European Parliament and the Council of the European Union adopted the Directive, which entered into force 26 December 2014, setting 27 December 2016, as the deadline for its transposition at national level. On 27 October 2016, the Italian Council of Ministers approved an initial proposal for a Legislative Decree implementing the Directive and sent it to the relevant commissions of the Italian Parliament for their mandatory (non-binding) opinions. The Legislative Decree was therefore finally approved in the Council of Ministers’ meeting of 14 January 2017. Although it is difficult to predict the likely impact of the Legislative Decree, it will definitely provide a more certain legislative framework for companies and consumers interested in claiming damages on the basis of alleged antitrust infringements.

Gabriele Giunta contributed to this post. 

Unfair Commercial Practices – The Italian Competition Authority and The Italian Communication Authority Sign a Memorandum of Understanding

On 13 January 2017, the Italian Competition Authority (AGCM) and the Italian Communication Authority (AGCOM) signed a memorandum of understanding concerning several aspects of their cooperation in the application of consumers’ protection rules. Under the memorandum of understanding, in the case of consumers’ protection matters, which potentially involve both authorities, there will be coordinated actions, even during the preliminary investigation phase. Furthermore, AGCM will inform AGCOM on cases concerning the violations of rules enforced by AGCOM, which will do the same in case of hypothesis of unfair commercial practices in the electronic communications sector. The authorities agreed also to set up a standing working group in order to promote the debate on consumer protection issues. Finally, the agreement provides rules on the exchange of information between the authorities on investigations.

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President-Elect Trump Has Once-in-a-Century Opportunity to Substantially Revise the FTC’s Law Enforcement and Regulatory Agenda

Bilal Sayyed, a McDermott partner and former official at the Federal Trade Commission, has prepared a thoughtful series of recommendations for actions which the new administration’s FTC might take. His paper considers options which the new administration may take based on prior precedents.

Read the full report here.

Sale of Serie A Broadcasting Rights, the Regional Administrative Court of Lazio Annuls the Decision of the Italian Competition Authority

On 23 December 2016, the Regional Administrative Court of Lazio (the TAR) annulled the decision of the Italian Competition Authority (the Authority), against Sky Italia S.r.l. (Sky); Reti Televisive Italiane S.p.A. (and its subsidiary Mediaset Premium S.p.A.) (RTI); the Italian Football League (Lega Calcio); and Infront Italy S.r.l.(Infront), concerning an alleged violation of Article 101 Treaty on the Functioning of the European Union  (TFEU) on the sale of broadcasting rights of the Italian Premier League “Serie A” for the years 2015–2018. According to the TAR, the Authority failed to observe the mandatory time-limit to contest the alleged conduct. The TAR highlighted that the Authority erred in considering the alleged conduct as a market sharing agreement. Furthermore, the Authority also erred in considering the agreement as a restriction “by object.” In particular,, according to TAR, the Authority has not carried out a thorough analysis of the relevant market and has not followed the recent European case law, according to which “in order to determine whether an agreement between undertakings reveals a sufficient degree of harm that it may be considered a ‘restriction of competition by object’ within the meaning of Article 101(1) TFEU, regard must be had to the content of its provisions, its objectives and the economic and legal context of which it forms part” (see Court of Justice of the European Union, case C-373/14 P, Toshiba Corporation v European Commission, 20 January 2016).

The broadcasting rights for the Italian Premier League “Serie A” are allocated, according to Legislative Decree No. 9 of 9 January 2008, through a tender issued by the Lega Calcio. In the 2014 tender, regarding the broadcasting rights for the years 2015–2018, Sky submitted the best bids for the two most relevant lots (A and B). However, considering the conditional bids presented by RTI and the possible creation of a dominant position in the market, the Lega Calcio, advised also by Infront, decided to allocate the relevant lots between Sky (lot A) and RTI (lots B and D). Then, after having received the authorization of both the Authority and the Italian Communication Authority, RTI granted to Sky the sub license of lot D. However, on 13 May 2015, the Authority opened an investigation on the decision-making process for the allocation of the broadcasting rights, and with decision of 19 April 2016, fined RTI of € 51,4 million, Infront of € 9,04 million, Sky of € 4 million and the Lega Calcio of approximately € 2 million for alleged market sharing in breach of Article 101 TFEU.

Gabriele Giunta contributed to this post.

Changes to Chile’s Competition Law

Chile has amended its Competition Law to “consolidate [its] leadership as a sophisticated agency in Latin America.”

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Overview of the Proposed Reforms of the EU Merger Control Regime

In October 2016, the European Commission launched a public consultation to continue the process of identifying possible areas of the EU Merger Regulation suitable for refinement, improvement and simplification.

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US Supreme Court to Review Patent Exhaustion Doctrine

On December 2, 2016, the Supreme Court of the United States granted cert in a key case regarding the scope of the patent exhaustion doctrine, or “first sale doctrine,” as it relates to (1) sales of a patented item subject to restrictions on post-sale use and (2) authorized sales of a patented article outside of the United States. The US Supreme Court’s resolution of this case will have important implications for secondary markets for patented products and global commerce.

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Aerospace and Defense Series: Trump Administration—Potential for Increased Antitrust Leniency for Vertical Transactions in the Defense Industry

President-elect Donald Trump has called for a dramatic increase in defense spending including purchases of new ships and warplanes as well as the addition of tens of thousands of new troops. This increase in spending generally bodes well for the aerospace and defense industry and potentially signals a new era of growth for companies in this space. This article examines how M&A transactions are likely to be reviewed in a Trump administration, with particular focus on “vertical” transactions.

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