Abuse of dominant position in Poland

Abuse of dominance in EU

A dominant position is a situation where the economic power held by a company allows it to hinder the maintenance of effective competition in the relevant market by behaving to an appreciable extent independently of its competitors, customers and ultimately consumers. As a general rule of thumb, a company is unlikely to be dominant if it has a market share of less than 40%. For these purposes, it is necessary to define the relevant product market, as well as the relevant geographic market (which may be EU-wide, national or even local).

Holding a dominant position is not itself unlawful. However, dominant undertakings have a special responsibility to behave in a way that does not damage or hinder competition. Where a company has a dominant position, it will be in breach of EU competition rules if it “abuses” that position.

Abuse of dominance in Poland

Concept of dominant position in Poland is generally similar as in EU, and as a result above remarks are also valid with regards to Polish regulations.

In Poland dominant position is defined in art. 4.10. of the Competition Act and shall be understood as the position of an entrepreneur which enables it to prevent effective competition on the relevant market by creating the possibility of acting to a large extent, regardless of competitors, contractors and consumers; it is presumedthat the entrepreneur has a dominant position if its share in the relevant market exceeds 40%.

Specific forms of abuse in EU

If the entrepreneur holds a dominant position in a particular market, it shall not:

  1. charge excessive prices (i.e. which do not bear reasonable relationship to the economic value of the supplied goods).
  2. limit production, distribution or technical developments to the unjustified prejudice of undertakings or consumers.
  3. refuse to supply: if entrepreneur is in a dominant position, it must have a reasonable and fair commercial reason for cutting off supplies to an existing customer or denying supply to a new customer.
  4. margin squeeze: charge a wholesale price for an essential input to compete in the downstream market (where entrepreneur is also present), that prevents those companies from effectively competing in the downstream market with the dominant company may amount to an abuse of a dominant position.
  5. apply materially different trading terms (to prices or other conditions) to equivalent transactions in the absence of an objective justification.
  6. apply incentives to induce customers to purchase exclusively or to a large extent from entrepreneur. In particular, to apply conditional and/or retroactive rebates / discounts that have the effect of foreclosing competitors.
  7. make the conclusion of contracts subject to supplementary obligations that bear no link to the subject matter of the contract leading to the foreclosure of competitors.
  8. price at unfairly low levels (e.g. below average avoidable cost), particularly if there is evidence of entrepreneur’s intent to drive a competitor out of the market.

Specific forms of abuse in Poland

If the entrepenur holds a dominant position in a particular market, it shall not:

  1. impose, whether directly or indirectly, unfair prices, including excessively high or drastically low ones, distant payment dates, or other conditions of purchase or sale of goods;
  2. limit production, sale or technical development to the detriment of contracting parties or consumers;
  3. apply, in similar contracts with third parties, onerous or dissimilar contract conditions, thereby subjecting these parties to disparate competitive conditions;
  4. make a contract conditional upon the acceptance or fulfillment by the other party of a performance that is unrelated either by its substance or by customary practice to the object of the contract;
  5. obstruct development of conditions essential to the emergence or development of competition;
  6. impose onerous contract conditions to obtain unfair benefits;
  7. divide the market according to territorial, product-line or by-subject criteria.
Expert team leader DKP Legal Michał Dudkowiak
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