On April 21 2017 Parliament adopted the Act on Private Enforcement of Competition Law, which transposes the EU Antitrust Damages Directive (2014/104/EU) into Polish law.
Although it was previously possible under general tort law to file a civil lawsuit for damages caused by an infringement of competition law, few potential complainants sued cartelists in Poland. This was mainly due to the difficulty in proving the extent of the damage and the causal link between it and the breach of competition law.
The Act on Private Enforcement of Competition Law aims to enhance enforcement of the payment of compensation by companies that have infringed competition rules. This objective will be achieved by:
- the new rules on legal presumptions favourable to claimants;
- specific principles for collecting evidence; and
- extended limitation periods.
Presumptions of culpability and harm
The Act on Private Enforcement of Competition Law introduces a presumption of the infringer's culpability as well as a presumption that the infringement caused harm. Both presumptions are rebuttable and the defendant has the right to contest them and prove otherwise in court. However, due to the introduction of the abovementioned presumptions, contrary to general tort law principles, the burden of proof falls on the defendant.
The scope of the presumption of harm is wider than under the EU Antitrust Damages Directive, as it covers not only cartels (ie, horizontal agreements), but also vertical restraints and the abuse of dominant position.
The Act on Private Enforcement of Competition Law creates a pass-on presumption that any overcharge of a direct purchaser resulting from infringement is presumed to have been passed on to the indirect purchaser that bought the products. As with previously mentioned presumptions, the defendant may try to challenge the pass-on presumption by proving that the overcharge was not passed on or that the pass-on was limited.
Specific rules on collecting evidence
Under the new regulation, a claimant may request a court to order a defendant or third party to disclose the evidence that they possess (eg, written documents or emails) if such evidence may be crucial to influence the court's judgment. Evidence obtained in this way can be used only in private enforcement proceedings. An obligation to disclose evidence can also be imposed on the Office for Competition and Consumer Protection (OCCP) if the evidence cannot be provided to the court in any other way. This rule does not apply to leniency statements and settlement submissions made by an infringer. The purpose of the latter provision is to encourage cartelists to cooperate with the OCCP during anti-monopoly proceedings. The defendant may also submit a request to order the disclosure of evidence subject to the same legal restrictions, as in the case of a claimants' request.
Further, the Act on Private Enforcement of Competition Law stipulates that the OCCP's final decisions will be binding for courts in antitrust damages cases. Nonetheless, the act will also be applied to competition law infringements with respect to which no proceedings were carried out and no decision of the authority was issued.
Under the new act, the court will be entitled to base its judgment with respect to the quantification of damage on the European Commission guidelines or the advice of the OCCP or another national competition authority that has insight into the case. However, the court's assessment will likely be based on the opinion of economic experts and their arguments, as in other EU countries where private enforcement lawsuits are more common.
The lawmakers extended the general limitation period from three to five years, although the limitation period does not commence until the infringement has ended and will be suspended on the launch of an investigation by the OCCP or the European Commission.
The act will enter into force on June 26 2017 and will be applied to competition law infringements occurring after this date. Only some procedural rules (eg, regarding disclosure of evidence or the binding effect of the OCCP's final decisions) will be applied to infringements that occurred before the act's entry into force.
The Act on Private Enforcement of Competition Law should give entities and consumers harmed by competition law infringements the opportunity and encouragement to sue infringing companies more often. The introduction of legal presumptions shifting the burden of proof onto the infringer and specific rules on the disclosure of evidence, which should increase the chances of claimants succeeding in court, are steps in this direction.
However, in practice, the success of private enforcement in Poland will ultimately depend on the OCCP's effectiveness as a public enforcer.
Conversely, the act increases the legal and economic risk for competition law infringers, which should know that a breach of antitrust rules may lead to heavy fines by the OCCP or the European Commission, as well as damages for injured parties and individuals awarded by civil courts. Having effective competition compliance programmes in place is thus more important than ever.
For further information on this topic please contact Katarzyna Terlecka or Pawel Kulak at Schoenherr Attorneys at Law by telephone (+48 22 223 09 00) or email ([email protected] or [email protected]). The Schoenherr website can be accessed at www.schoenherr.eu.
This article was first published by the International Law Office, a premium online legal update service for major companies and law firms worldwide. Register for a free subscription.
