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The Warsaw Voice » Law » March 27, 2013
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Have you fallen victim to illegal price-fixing practices? Fight for compensation!
March 27, 2013   
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The media report from time to time about cases of illegal collusion between businesses to restrict competition. We read that the President of the Office of Competition and Consumer Protection has discovered price fixing between a producer and distributors, or that the European Commission has warned Poland that it will withhold EU funding for the country because of suspected bid rigging by construction companies... To defend the public interest, the national authorities have taken legal action, imposed fines, and referred cases to courts. This sounds impressive enough, but the question remains whether the measures taken by the national authorities can compensate for damage suffered by businesses and individuals as a result of such practices.

The answer is simple - of course not. Few businesses or individuals in Poland sue for damages for breach of the law on fair competition (private enforcement). European businesses or individuals rarely exercise their rights in this respect. The value of potential damages that victims are thus foregoing is estimated at several billion euros a year. Which is a pity, because a European Commission White Paper as well as Polish judicial authorities both seem to encourage such claims*.

Americans have a completely different approach to private enforcement. The country’s antitrust laws have developed to embrace both the public and private sectors. American businesses and consumers often bring independent suits for damages to courts. There is widespread awareness in the country that a breach of antitrust laws may result in an order to pay huge damages to the victim. American judges decide themselves - without waiting for a ruling by antitrust authorities - whether or not antitrust laws have been breached and determine the amount of compensation awarded to the victim.

It seems there are two reasons for Europeans’ general reluctance to press for compensation:

- low awareness of victims’ rights;

- fear of complex, costly and drawn-out proceedings, something that especially discourages those who have suffered relatively minor harm.

Judges admit that it is not easy to adjudicate collusion cases, even if an anti-monopoly authority has already issued a definitive ruling (binding for a civil court) that the law on fair competition has been broken. The reason is that assessing the damage and setting the level of compensation may be difficult. The situation is even worse when the anti- monopoly authority has not issued a ruling on whether the law has been violated, although Poland’s Supreme Court confirmed in resolution III CZP 52/08 of 23 July 2008 that, in such cases, the court has the right to independently decide that competition law has been contravened and to award damages accordingly. Lack of a previous ruling by the anti-monopoly authority means that, apart from assessing the damage, the court must define a relevant market, determine market share, and so on. That said, it is worth noting that, despite such difficulties, cases of this kind are gradually becoming more frequent.

The difference in approach to the application of the law may be due to a different philosophy on the role of the state - a point which applies not only to competition law. Members of American society tend to be very independent and proactive in enforcing their rights; Europeans, meanwhile, tend to look to state authorities for protection. This clearly makes for greater effectiveness of the American system in enforcing fair competition laws - for two reasons:

- it rewards independent efforts of victims by giving them the possibility of securing compensation for the harm suffered;

- it contributes to enhancing people’s legal awareness and, consequently, may act as a deterrent, discouraging potential breaches. In such an environment, businesses fear not only a fine imposed by an anti-monopoly authority, but also claims for damages.

Have you fallen victim to illegal price-fixing practices? Fight for compensation!

A person aggrieved due to breach of competition law may wish to consider legal recourse. A business enterprise may think twice before entering into an unlawful agreement if it knows that, apart from an administrative fine, it is also risking civil action and, ultimately, damages.

Bernadeta Kasztelan-¦wietlik
Attorney
GESSEL Law Firm


*White Paper on Damages Actions for Breach of
the EC Antitrust Rules, EC, Brussels, April 2, 2008,
COM 2008.


BERNADETA KASZTELAN-¦WIETLIK, Attorney. Graduate of Adam Mickiewicz University in Poznań; qualified as a judge and as an attorney.

Held a number of positions at the Office for Competition and Consumer Protection, most recently as Director of the Infrastructure Department, before moving to private legal practice.

With GESSEL since 2001, where she specialises in competition law, representing the firm’s clients before the Office of Competition and Consumer Protection in merger and acquisition cases, proceedings related to complaints about competition-inhibiting agreements, abuse of dominant market positions, and consumer protection. As an expert in competition law, she is the author of press publications and has lectured at numerous conferences, workshops and training sessions.

Recommended, among others, by Chambers Europe and the Practical Law Company.
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