Prohibited price fixing - what is it?
Price collusion is one of the acts of unfair competition that some entrepreneurs use in trade. What exactly is it and does it have anything to do with marketing and advertising?
Price collusion - the concept and legal regulations
Price collusion is not specifically regulated in any legal act, but we can link it with the concept of a competition-restricting agreement, included in section II, chapter 1 of the Act of February 16, 2007 on competition and consumer protection, a tort. As indicated in art. 6:
Art. 6. 1. Agreements the purpose or effect of which is to eliminate, limit or otherwise violate competition on the relevant market, consisting in particular of:
1) determining, directly or indirectly, prices and other conditions for the purchase or sale of goods;
2) limiting or controlling production or sale, as well as technical progress or investments;
3) dividing the sales or purchase markets;
4) the use of onerous or non-uniform terms and conditions of contracts in similar contracts with third parties, creating different conditions of competition for these persons;
5) making the conclusion of the contract conditional on the acceptance or performance by the other party of another service that has no material or customary connection with the subject of the contract;
6) limiting access to the market or eliminating from the market entrepreneurs not covered by the agreement;
7) agreeing by entrepreneurs joining the tender or by those entrepreneurs and the entrepreneur who is the organizer of the tender on the terms of the tenders submitted, in particular the scope of works or the price.
2. The agreements referred to in para. 1, are invalid in whole or in part, subject to article 22. 7 and 8.
The legislator does not define exactly how this type of settlement can be implemented - these can be various events, from a written contract, signed by the parties, to oral arrangements. Therefore, it is not easy to prove to entrepreneurs that such an act has been committed, especially since such agreements are usually concluded in secret.
Price collusion may take the form of:
horizontal - i.e. between entrepreneurs operating in the same market segment, usually also in the same industry (for example, two drugstore chains),
vertical - that is, between entities that are not competitors to each other, but are in some way related to each other and influence each other's interests (for example, a warehouse and a store to which it supplies goods).
In marketing, the prohibited price collusion is carried out primarily in promotional activities, the result of which is damage to another entrepreneur operating on the market.
Responsibility for price collusion
In the context of liability for price collusion, it should first of all be noted that in order to punish the perpetrators of price collusion, it is not necessary for them to make arrangements. This is confirmed by the judgment of the Court of Competition and Consumer Protection of March 24, 2004, file ref. no. XVII Ama 40/02, in which the court stated that for the purpose of finding a violation of Art. 6 sec. 1 point 1, it does not matter whether competition was restricted or eliminated, since the very goal itself may make the agreement illegal.
Responsibility for price collusion is specified in Art. 106 of the Act on competition and consumer protection:
Art. 106. 1. The President of the Office may impose on the entrepreneur, by way of a decision, a fine of not more than 10% of the turnover achieved in the financial year preceding the year in which the penalty was imposed, if the entrepreneur, even unintentionally:
1) has breached the prohibition specified in art. 6, to the extent not excluded pursuant to art. 7 and art. 8, or a breach of the prohibition specified in Art. 9 (...).
Importantly, the supervisor may also be held liable, leading to a situation in which his subordinate consciously implements the assumptions resulting from the forbidden price collusion.