Distribution agreements

Area of expertise

Distribution agreements are generally not considered to be anticompetitive unless they contain anticompetitive provisions that are strictly prohibited by the Polish Competition Act. Moreover, if any of the parties to a vertical agreement has more than a certain market share level, the agreement must be assessed further and carefully as it could be considered anticompetitive under general competition rules.

For several years, the President of the Office for the Protection of Competition and Consumers (the “OCCP – UOKiK”, “Polish Competition Authority”) has imposed high fines on producers and distributors who agreed on an actual level of resale prices or upon minimum resale prices (“resale price maintenance”, “RPM”), a type of agreement that is strictly prohibited by the Polish Competition Act. The European Commission has also been increasingly active in this area, primarily in e-commerce.

Under the Polish Competition Act, clauses prohibited in distribution agreements, in addition to those setting resale prices, include those restricting the freedom of distributors to determine the area of influence or groups of customers to target. This prohibition particularly pertains to e-commerce.

A significant difference between the treatment of illegal vertical agreements by the Polish and EU competition laws is that the Polish Competition Act allows for leniency for vertical restraints whereas the EU law does not.

Experience

Hansberry Tomkiel advises its clients how to create distribution systems and to establish trade policies with respect to vertical relationships between producers and distributors, sellers and buyers of goods or services, to comply with the Competition Act.

If the Competition Authority has already charged an illegal distribution practices, we work closely with our client to identify facts and arguments to defend against the charge. We are skilled in presenting a convincing case to the Competition Authority, working hand in hand with specialised teams of antitrust economists and industry experts, if necessary.

If a client’s conduct appears to exceed what is legally permitted, but the defendant chooses not to defend its conduct, Hansberry Tomkiel assists in identifying available legal remedies to mitigate competition law liability, such as the leniency programme, settlements or commitments.

Our recent experience includes:

representing a personal hygiene goods manufacturer, which resulted in the partial dismissal (by UOKiK, in an administrative decision) of its earlier allegation of a minimum resale price agreement. Our Firm drafted the client’s appeal of UOKiK’s remaining charges and presented the appeal to the Competition Court, whom we persuaded to annul the remainder of UOKiK’s decision;
representing a client in a dispute with the owner of shopping centres that used clauses restricting competition in its agreements with tenants;
preparing a competition law compliance audit and proposals for changes in the distribution rules of a large food manufacturer;
drafting opinions on the compliance of banking franchise networks with the Competition Act; and
providing compliance training to the sales department of a major appliance manufacturer.

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