Anti-competitive agreements in Poland

Prohibited agreements in Poland – Art. 6 of the Competition Act

Article 6 of Polish Competition Act defines general prohibition of concluding agreements distorting competition on the relevant market. As a result, the entrepreneurs shall not enter into horizontal or vertical agreements which seek to or result in eliminating, restricting or otherwise distorting competition on the relevant market. This prohibition shall not apply to intra-group agreements.

In particular, the entrepreneur shall not agree any of the following group of specific practices (which are prohibited in all cases):

  1. price fixing, whether directly or indirectly, and other conditions of purchase or sale of goods;
  2. limiting or controlling production or sale, also technical progress or investment;
  3. dividing markets of sale or purchase;
  4. applying in similar contracts with third parties onerous or disparate contract conditions, thereby subjecting these parties to disparate competitive conditions;
  5. making a contract conditional upon the acceptance or fulfilment by the other party of a performance that is unrelated either by its substance or by customary practice to the object of the contract;
  6. restricting market access or eliminating from the market entrepreneurs not being party to the agreement;
  7. entrepreneurs entering into tendering, or these entrepreneurs and an entrepreneur who organizes the tendering, agreeing terms of submitted tenders, in particular the scope of works or price.

It shall be also explained that agreement shall be defined widely to cover:

  1. all contracts entered into by entrepreneurs, association of entrepreneurs, also by entrepreneurs and associations of entrepreneurs, or certain provisions of such contracts;
  2. arrangements, in whatever form, agreed by two or more entrepreneurs or by associations thereof;
  3. resolutions or other deeds adopted by associations of entrepreneurs or their constitutive bodies.

Any agreement containing such clauses will be automatically void in full or in relevant part. Sanctions for concluding such agreement for the entrepreneur or / and its managing staff are presented in section penalties.

Anticompetitive agreements – exemption criteria

The Entrepreneur may conclude an agreement that falls under definition of prohibited agreement (Article 6 of Polish Competition Act) if it is established after careful evaluation that such agreement may benefit from one of the exemptions provided by Polish Competition Act. Currently the Act provides three types of exemptions from the prohibition of concluding agreements distorting competition:

  1. de minimis exemptions;
  2. block exemptions, incl. block exemptions of vertical agreements; and individual exemptions.

1. De minimis exemption

Even if the particular agreement falls under the definition of forbidden agreement (Art. 6 of the Competition Act), entrepreneurs can enter into this type of agreement if it is entered into by:

  1. Competitors if their combined share in the relevant market that the agreement concerns is no higher than 5 per cent;
  2. Non-competing entrepreneurs, where a market share held by any of them in the relevant market that the agreement concerns is no higher than 10 per cent.

With regards to the agreements already concluded by the entrepreneurs and operating underde minimis exemption – they may be continued if the shares in the relevant market referred above have not been exceeded by more than two percentage points during the period of two consecutive calendar years within the agreement’s validity period.

However, it shall be noted that significance of de minimis exemptions is very limited in Poland as they are NOT applicable to the following agreements:

  1. fixing, whether directly or indirectly, prices and other conditions of purchase or sale of goods;
  2. limiting or controlling production or sale, also technical progress or investment;
  3. dividing sale or purchase markets;
  4. entrepreneurs entering into tendering, or these entrepreneurs and an entrepreneur who organizes the tendering, agreeing terms of submitted tenders, in particular the scope of works or price.

As a result, the entrepreneurs may not relay on de minimis exemptions in case of above listed agreements.

2. Block Exemptions

Under art. 8.3 of Competition Act the Counsel of Ministers has powers to issue executive ordinances that exempt in blocks certain types of agreements from prohibition of concluding agreements distorting competition.

As a result, if the agreement falls under the definition of forbidden agreement (art. 6 Competition Act), entrepreneurs can enter into this type of agreement if it is established after careful evaluation that such agreement would be exempted under the terms and conditions of one of the executive ordinances issued by the Council of Ministers.

Currently there are three ordinances in force, issued by the Council of Ministers, setting out conditions for exemption of:

  1. Certain categories of technology transfer agreements (“Technology Transfer Ordinance”) [Rozporządzenie Rady Ministrów w sprawie wyłączenia niektórych rodzajów porozumień o transferze technologii spod zakazu porozumień ograniczających konkurencję z dnia 17 kwietnia 2015 r. (Dz.U. z 2015 r. poz. 585)];
  2. Certain categories of specialization agreements and research and development agreements (“Research and Development Ordinance”) [Rozporządzenie Rady Ministrów w sprawie wyłączenia określonych porozumień specjalizacyjnych i badawczo-rozwojowych spod zakazu porozumień ograniczających konkurencję z dnia 13 grudnia 2011 r. (Dz.U. Nr 288, poz. 1691)];
  3. Certain categories of vertical agreements (“Vertical Agreements Ordinance”) [Rozporządzenie Rady Ministrów w sprawie wyłączenia niektórych rodzajów porozumień wertykalnych spod zakazu porozumień ograniczających konkurencję z dnia 30 marca 2011 r. (Dz.U. Nr 81, poz. 441)].

Exemption for certain categories of technology transfer agreements

Binding force

According to Technology Transfer Ordinance the exemption for certain categories of technology transfer agreements will remain in force until 30 April 2027.

General exemption

As an exception to general prohibition of concluding agreements distorting competition, the entrepreneurs may conclude a technology transfer agreement if:

  1. the agreement is concluded between competitors and their combined share in the relevant market or markets in the year preceding conclusion of the agreement is no higher than 20 per cent and subject to no hardcore restrictions in the agreement;
  2. the agreement is concluded between non-competing entrepreneursand their combined share in the relevant market or markets in the year preceding conclusion of the agreement is no higher than 30 per cent and subject to no hardcore restrictions in the agreement.
Hardcore restrictions in any type of technology transfer agreements (i.e. between competitors and non-competing entrepreneurs)

The entrepreneurs may never agree to include in technology transfer agreement any of hardcore restriction, i.e. any clauses (arrangements) that are directly or indirectly are designed to:

  1. Impose an obligation on the licensee to grant an exclusive license to the licensor or to a third party designated by the licensor or to transfer the rights to the licensor or such third party, in whole or in part, in relation to its own improvements to the licensed technology or its own new applications of this technology developed by the licensee;
  2. Impose an obligation on the party not to question the validity of intellectual property rights held by the other party in the European Union, with the option of terminating, in the case of an exclusive license, the technology transfer agreement if the licensee questions the validity of any of the rights to the licensed technology.
Hardcore restrictions in technology transfer agreements between competitors

In the technology transfer agreement with the competitor the entrepreneurs may never agree to include any of hardcore restrictions, i.e. any clauses (arrangements) that are directly or indirectly designed to:

  1. restrict the freedom of setting the prices of goods by either party for entities that are not parties to the agreement;
  2. restric production, with the exception of production restrictions on the contract goods imposed on the licensee in a unilateral technology transfer agreement or imposed on only one of the licensees in a bilateral technology transfer agreement;
  3. Divide markets or customers, except for:
    1. obligations of the licensor or licensee in a unilateral technology transfer agreement not to produce goods using the licensed technology rights in the exclusive area reserved for the other party or not to sell in the exclusive area or exclusive customer group reserved for the other party,
    2. a restriction, imposed by a unilateral technology transfer agreement, on active sales by the licensee in an exclusive territory or to an exclusive customer group that have been allocated by the licensor to another licensee, provided that the licensee was not a competitor of the licensor at the time the license was granted,
    3. the obligation on the licensee to manufacture the contract goods solely for its own use, provided that the agreement does not restrict the licensee from selling the contract goods as spare parts for its own goods;
    4. obligations of the licensee in the unilateral technology transfer agreement to produce the contract goods only for the customer named in the agreement, if the license was granted to create an alternative source of supply for that customer;
  4. Restrict licensee’s rights to use its own technology rights or restriction of the rights of any party to the agreement to conduct research and development, provided that the restriction of the rights of any party to the agreement to conduct research and development is necessary to prevent the disclosure of the licensed know-how to third parties.
Hardcore restrictions in technology transfer agreements between non-competing entrepreneurs

In the technology transfer agreement with non-competing entrepreneur – the entrepreneurs may never agree to include any of hardcore restrictions, i.e. any clauses (arrangements) that are directly or indirectly designed to:

  1. restrict the freedom to determine the prices of goods by either party, while retaining the possibility of setting a maximum selling price or recommended selling price, provided that this is not tantamount to applying a fixed or minimum selling price determined as a result of pressure or incentives of either party;
  2. limit the area or customers in which or for which the licensee may sell goods covered by the agreement passively, except for:
    1. restrictions on passive sales in the area of the exclusive or exclusive group of customers, which are reserved to the licensor,
    2. the obligation to manufacture the contract goods solely for its own use, provided that the licensee is not restricted in selling the contract goods as spare parts for its own goods;
    3. obligations to produce contract goods only for the recipient indicated in the agreement, where the technology transfer agreement was concluded in order to create an alternative source of supply for that customer,
    4. restrictions on sales to end users by a licensee operating at the wholesale level,
    5. restrictions on sales to unauthorized distributors by participants in a selective distribution system;
  3. restrict sales to end users by the licensee operating in the selective distribution system, which operates at the retail level, with the exception of the restriction of their ability to sell in premises that do not meet the criteria specified in the agreement on which the selective distribution system is established;
  4. Restrict the licensee’s entitlement to use the rights to its technology or restricting the right of any of the parties to the agreement to conduct research and development, except in the case of where this restriction is necessary to prevent the disclosure of the licensed know-how to third parties.

Exemption for certain categories of specialization agreements and research and development agreements

Binding force

According to Research and Development Ordinance the exemption for certain categories of specialization agreements and research and development agreements will remain in force until 31 December 2023.

General exemption – type of agreements

As an exception to general prohibition of concluding agreements distorting competition, the entrepreneur may conclude a specialization agreement (subject to market share requirement and no hardcore restrictions) with two or more entrepreneurs with regards to:

  1. unilateral specialization between entrepreneurs operating on the same market of goods – under which one of the parties undertakes to completely or partially cease or discontinue the production of certain goods and to purchase them from the other party or other parties who undertake to produce and deliver these goods;
  2. mutual specialization between entrepreneurs operating on the same market of goods – under which the parties undertake, on a reciprocal basis, fully or partially to cease or discontinue the production of specific but different goods, and undertake to purchase these goods from other parties to the agreement that agree to produce and deliver them;
  3. joint production – under which the parties undertake to produce specific goods jointly.

As an exception to general prohibition of concluding agreements distorting competition, the entrepreneur may conclude a research and development agreement (subject to market share requirement and no hardcore restrictions) with two or more entrepreneurs with regards to:

  1. running research and development activities jointly in relation to the contract goods or processes and to jointly use the results of these activities;
  2. joint use of the results of research and development in relation to the contract goods or processes carried out jointly under an agreement previously concluded between the same parties;
  3. conducting research and development activities jointly in relation to the goods or processes covered by the agreement, excluding the joint use of the results of these activities;
  4. carrying out paid research and development in relation to the contract goods or processes and share the results of these activities;
  5. sharing the results of the paid research and development with the contract goods or processes in an agreement previously concluded between the same parties;
  6. carrying out paid research and development in relation to the contract goods or processes, excluding the sharing of the results of those activities.
Market share requirement

The entrepreneur may conclude a specialization agreement if the total share of the parties to the specialization agreement and their capital groups in any relevant market does not exceed 20% per cent for each of the goods covered by the specialization.

The entrepreneur may conclude a research and development agreement if the total share of the parties to the specialization agreement and their capital groups in any relevant market does not exceed 25 per cent for each of the goods covered by the specialization.

Hardcore restrictions in specialization agreements

In the specialization agreement the entrepreneur may never agree to include any of hardcore restrictions, i.e. any clause (arrangement) that directly or indirectly, alone or in combination with other factors dependent on the parties, are designed to:

  1. determine the selling prices of goods covered by the specialization to third parties;
  2. limit the production or sale of goods covered by the specialization;
  3. divide sales markets for goods covered by the specialization.
Hardcore restrictions in research and development agreements

In the research and development agreement the entrepreneur may never agree to include any of hardcore restrictions, i.e. any clauses (arrangement) that directly or indirectly, alone or in combination with other factors dependent on the parties, are designed to:

  1. fix prices or fees in the case of selling contract goods or licensing the contract processes to third parties;
  2. limit production or sales, except for:
    1. determining the lines of production, if the joint exploitation of the results includes the joint production of the goods covered by the agreement,
    2. determining the directions of sales, if the joint use of the results includes the joint distribution of goods or joint licensing,
    3. specialization in the exploitation of results,
    4. restricting the freedom of the parties to manufacture, sell or transfer rights in goods or processes, or to license goods or processes that compete with the contract goods or processes during the period in which the parties have agreed to use the results jointly;
  3. restrict areas or assign customers where or to whom the parties may passively sell the contract goods or license the contract processes, with the exception of the requirement to grant the other party an exclusive license to exploit the results;
  4. eliminate or restrict the active sale of the contract goods or processes in such areas or to customers that are not exclusively allocated to one of the parties as part of the exploitation specialization;
  5. oblige the parties to refuse to meet demand from customers in the areas allocated to the parties to the agreement or from customers otherwise allocated between the parties as part of a performance exploitation specialization that would market the contract goods in other areas;
  6. make it difficult for buyers, including resellers, to obtain the contract goods from other resellers;
  7. limit the freedom of participation of the parties to the agreement in carrying out research and development activities independently or in cooperation with third parties in an area other than that covered by the agreement, or after termination of joint research and development activities or paid research and development activities in the field to which the activity relates or related;
  8. prohibit questioning, after completion of research and development activities, the validity of intellectual property rights, including industrial property rights, which are at the disposal of the parties to the agreement, which are relevant for this activity;
  9. prohibit undermining, after the expiry of the research and development agreement, the validity of intellectual property rights, including industrial property rights held by the parties to the agreement, protecting the results of research and development activities;
  10. oblige not to grant third parties a license to produce goods covered by the agreement or use processes covered by the agreement, except where the agreement provides for the use of the results of research and development activities or paid research and development activities by at least one of the parties against third parties.
Permissible restrictions in research and development agreements

Research and development agreement may still benefit from the exemption if:

  1. all parties to the agreement have full access to the final results of the joint research and development activity or the paid research and development activity, in particular to all intellectual property rights arising from this activity, including industrial property rights, or which constitute know-how, for the purpose of further research and use of their results, from the moment the final results are available, however:
    1. it is permissible to limit the parties’ access to the results in order to use them, in particular in the case of specialization in the use of the results,
    2. parties that conduct research and development on a commercial basis, for which the exploitation of results is not their main focus, may agree to limit the use of results only for the purpose of further research,
    3. the research and development agreement may provide for mutual compensation of the parties for gaining access to the results for further research or for using the results, but the compensation must not be so high as to effectively hinder such access;
  2. each of the parties to the agreement has access to any pre-existing know-how of the other parties necessary to use the results of research and development or paid research and development, if the agreement provides only for joint research and development or paid research and development; the research and development agreement may provide for mutual compensation of the parties for gaining access to already existing know-how, but the compensation may not be so high as to effectively hinder such access;
  3. the joint use of the results of research and development or paid research and development concerns only results protected by intellectual property rights, including industrial property rights, or constituting know-how, insofar as these results are decisive for the production of goods or processes covered by the agreement;
  4. obligated undertakings, as part of the specialization in the use of results, to produce the goods covered by the agreement, are required to fulfil orders from other parties to the agreement for the supply of these goods, except where the research and development agreement also provides for joint distribution, or when the parties have agreed that only the party producing the goods may distribute the goods covered by the agreement.

Exemption for certain categories of vertical agreements

Binding force

According to Vertical Agreements Ordinance the exemption for certain categories of vertical agreements will remain in force until 31 May 2023.

General exemption

As an exception to general prohibition of concluding agreements distorting competition, and subject to market share requirement and no hardcore restrictions, the entrepreneur may participate in a vertical agreement between:

  1. Entrepreneurs not being competitors;
  2. Entrepreneurs being competitors – only with regards to non-reciprocal vertical agreement – if:
    1. the supplier is a manufacturer and distributor of non-services goods and the buyer is a distributor and is not a competitor at the manufacturing level, or
    2. the supplier provides services at several levels of trade and the buyer delivers goods or services at the retail level and is not a competitor at the level of trade where it purchases the services covered by the vertical agreement;
  3. Association of entrepreneurs and their members or association of entrepreneurs and their suppliers if:
    1. all association members are retailers of non-service goods, and
    2. the turnover of any association member, including the turnover of entrepreneurs belonging to its capital group, in the previous calendar year did not exceed the equivalent of EUR 50 million.
Vertical agreements with IP and know-how

As an exception to general prohibition of concluding agreements distorting competition, and subject to market share requirement and no hardcore restrictions, the entrepreneur may enter into vertical agreements containing provisions relating to the assignment or use by the buyer of intellectual and industrial property rights or know-how, if these provisions do not constitute the principal object of such agreements and are directly related to the use, sale or resale of the goods covered by the agreement.

Market share requirement

The entrepreneur may conclude a vertical agreement if the total share of the supplier and its capital group in the market of sales of goods covered by that agreement does not exceed 30% per cent and total share of the buyer and its capital group in the market of purchases of goods covered by that agreement does not exceed 30% per cent.

Hardcore restrictions in vertical agreements

In vertical agreement the entrepreneur may never agree to include any of hardcore restrictions, i.e. any clauses (arrangements) that directly or indirectly, alone or in combination with other factors dependent on the parties, are designed to restrict:

    1. buyer’s right to freely determine the selling price – by the supplier imposing minimum or fixed selling prices for goods covered by the vertical agreement;
    2. territory or circle of customers in which or to which the buyer may sell goods covered by a vertical agreement, except for the restriction:
      1. relating to the premises or land on which the buyer conducts business,
      2. active sales to a specific territory or a specific group of customers reserved for the supplier or allocated by the supplier to another buyer, if these restrictions do not hinder the buyer’s customers from selling goods covered by a vertical agreement,
      3. sale to end users through a wholesale distributor, distributors operating in the selective distribution system for the resale of goods covered by the vertical agreement to distributors not belonging to this system, in the territory where the supplier is established or has taken steps to show that he intends to operate in this system,
      4. the buyer’s right to resell the components covered by the vertical agreement to other entrepreneurs who would use them to produce goods which, given their purpose, price and properties, including quality, are considered by buyers to be substitutes for the goods sold by the supplier;
    3. retail distributors operating in the selective distribution system the possibility of selling to end users, except for limiting the possibility of selling them in premises that do not meet the criteria specified in the vertical agreement being the basis for establishing a selective distribution system;
    4. cross-supply between distributors operating in the selective distribution system, including distributors operating at different levels of trade;
  • supplier’s rights to sell components covered by the vertical agreement – as spare parts – to end users, repair plants or other service providers that the buyer has not entrusted with the repair or servicing of goods manufactured with the use of these components.
Non-hardcore restrictions in vertical agreements

In vertical agreements the entrepreneur shall not directly or indirectly prohibit:

  1. competing for a definite period of time longer than five years or for an indefinite period, unless the buyer sells goods covered by a vertical agreement at the premises or in the premises of which the supplier is the owner, perpetual usufructuary, tenant or lessee, or which the supplier rents or leases from third parties not related with the buyer, and the duration of such an obligation does not exceed the time the buyer occupies the premises or land; a non-compete obligation which is tacitly renewed after five years is considered to be concluded for an indefinite period;
  2. distributors operating in the distribution system of selective – sale of goods only of certain competitors of the supplier;
  3. buyers – to manufacture, purchase, sale or resale of goods – after the expiry of the vertical agreement, unless the validity of such clauses:
    1. relates to goods which, due to their intended use, price and properties, including quality, are considered by their buyers as substitutes for goods covered by the vertical agreement, and
    2. is limited to the premises or land on which the buyer carries out business during the term of the vertical agreement, and
    3. it is necessary to protect the know-how transferred by the supplier to the buyer

– and their duration is limited to one year after the expiry of the vertical agreement, except for the possibility of imposing a restriction that does not have a time limit on the use and disclosure of know-how.

3. Individual Exemption

If the agreement falls under the definition of forbidden agreement (art. 6 Competition Act) and cannot be exempted under any of Block Exemptions (art. 8.3 Competition Act) the entrepreneur can enter into the agreement if such agreement meets at the same time all of below listed conditions:

  1. it causes further improvement of production, distribution of goods, or technical or economic progress;
  2. it ensures for buyers or users an appropriate share of benefits resulting therefrom;
  3. it does not impose on entrepreneurs restrictions which are not indispensable to the attainment of these objectives;
  4. it does not make it possible for these entrepreneurs to eliminate competition on the relevant market in respect of a substantial part of certain goods.

The entrepreneurs shall be very careful in exercising the Individual Exemption. The burden of proof of the circumstances referred above shall be on the entrepreneur. Conclusion of the agreement exempted under the Individual Exemption shall be always preceded by careful evaluation of above conditions and consultation with relevant legal department.

Expert team leader DKP Legal Michał Dudkowiak
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