Michał Surówka
advocatet
SURÓWKA LAW FIRM
What are the legal consequences of violating competition protection regulations?
It is worth emphasizing that this article is of a general nature. For individual consultation, please contact Attorney Michał Surówka directly at phone number (+48) 883-921-775 or via email at: adwokat.m.surowka@kancelariasurowka.pl. The law firm is based in Kraków, but provides services throughout the country.
A violation of competition protection regulations can cost a company up to 10% of its annual turnover. Competition law plays a key role in ensuring fair market practices and protecting consumers, and its importance has only increased in recent years. In light of increasingly stringent regulations, entrepreneurs must be aware of the potential legal consequences that may arise from violating these regulations. In this article, we will take a closer look at this topic, analyzing the penalties that companies may face for failing to comply with the principles of fair competition.
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What are the legal consequences of violating competition protection regulations?
A violation of competition protection regulations carries serious legal consequences that affect both businesses and the individuals managing them. Entrepreneurs must be aware of the potential consequences of their actions to avoid costly and damaging sanctions. In this section, we will discuss the obligation to remedy the damage, the possibility of pursuing compensation claims, and the statute of limitations for claims.
The obligation to remedy the damage caused by a business violating competition law
A violation of competition protection regulations may lead to the obligation to remedy the damage caused by the business. According to the Claims Act, any affected entity has the right to seek compensation. This means that both contractors, suppliers, and buyers can make claims against the business violating competition law. Such civil liability aims to compensate for the losses incurred by the harmed entities and restore equal competitive conditions in the market.
The possibility of pursuing compensation claims by the affected parties based on Directive 2014/104/EU and national regulations.
Under Directive 2014/104/EU and national regulations, affected parties have the right to pursue compensation claims for violations of competition law. This directive establishes rules that facilitate the ability of affected parties to obtain compensation for damages resulting from anti-competitive practices by businesses. It introduces, among other things, a presumption of damage, which relieves the affected parties from the burden of proof, and also provides access to evidence gathered during proceedings conducted by competition authorities.
The limitation periods for claims and the impact of UOKiK proceedings on their course
The limitation periods for claims for damages resulting from a violation of competition law are generally five years. However, the limitation period does not begin during the course of the violation, meaning that the injured parties can pursue their claims long after the anti-competitive practices have ended. Additionally, proceedings conducted by the President of UOKiK can affect the course of the limitation period. The initiation and conduct of administrative proceedings aims not only to punish the perpetrators but also to investigate and document violations, which can assist the injured parties in pursuing their claims.
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What are the legal consequences of violating competition law in administrative sanctions
Violation of competition law can lead to serious legal consequences for businesses. In particular, administrative sanctions imposed by the President of the Office of Competition and Consumer Protection (UOKiK) are a key element of the competition protection system in Poland. These sanctions aim not only to punish businesses for violations but also to deter other entities from engaging in anti-competitive practices.
Administrative proceedings conducted by the President of UOKiK in cases of violations
In the case of identifying violations of competition law, the President of UOKiK initiates administrative proceedings. This process includes a thorough examination of the company’s activities, including reviewing documents, conducting hearings, and analyzing evidence. The goal is to determine whether a violation of competition law has occurred and, if so, what steps should be taken to resolve it.
During the proceedings, the President of UOKiK may issue a decision ordering the cessation of the challenged practices. These decisions are final and binding, and failure to comply may lead to further sanctions. Violating competition laws may also result in the company being required to implement specific changes in its operations to prevent further violations.
The imposition of financial penalties of up to 10% of a company’s annual turnover for anti-competitive practices.
One of the most serious tools in the hands of the President of the UOKiK (Office of Competition and Consumer Protection) is the ability to impose financial penalties on companies that have committed violations. These penalties can reach up to 10% of the company’s annual turnover. Such a financial penalty can represent a significant burden for the company, both financially and reputationally.
High monetary fines are intended not only to punish the company for the violation but also to deter other entities from engaging in anti-competitive practices. These penalties are imposed in proportion to the severity of the violation and the scale of the company’s operations. For example, in cases of serious violations, such as price-fixing or market division, the penalties can be particularly severe.
Liability of company executives and fines up to 2,000,000 PLN
A violation of competition law does not only concern companies as legal entities. Individuals managing a company who intentionally cause a breach of competition law can also be held liable. The President of the UOKiK has the authority to impose a financial penalty of up to 2,000,000 PLN on such individuals.
The responsibility of individuals managing a company aims to increase the personal accountability of business leaders for complying with competition law. These penalties are imposed in cases where it has been proven that the manager intentionally and deliberately sought to violate competition law through the company. This approach is designed to prevent situations where managers make risky decisions without considering their legal consequences.
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Procedures for pursuing claims and the rights of affected parties.
Procedures for pursuing claims arising from violations of competition protection regulations are designed to enable affected parties to effectively enforce their rights. A violation of competition law, in accordance with the Treaty on the Functioning of the European Union and the Competition and Consumer Protection Act, entitles the injured party to seek compensation from the perpetrator. These regulations are particularly significant because they protect the interests of both businesses and consumers.
The burden of proof rests on the defendant business and there is a presumption of damage
In cases of a violation of competition law, the burden of proof rests on the defendant business. This means that the business must prove that it did not commit the alleged act. This is a significant facilitation for the injured parties, as they are not required to prove the violation, which can be a complicated and costly process. These regulations are intended to level the playing field and enhance the effectiveness of claims enforcement.
An expanded circle of affected parties, including consumers and entities outside the transaction chain
One of the key elements of the regulations concerning the pursuit of claims is the expansion of the circle of affected parties. The injured party may not only be a direct supplier or purchaser but also a consumer who is not part of the same transaction chain. This means that any entity that has suffered damage as a result of a violation of competition law has the right to seek compensation. This is important for protecting the interests of consumers, who are often the ultimate victims of anti-competitive practices.
The role of non-governmental organizations in pursuing claims on behalf of businesses and consumers
Non-governmental organizations play a crucial role in pursuing claims arising from violations of competition protection regulations. They work on behalf of businesses and consumers, supporting them in the process of seeking compensation. These organizations can represent the injured parties in court proceedings, which significantly facilitates the enforcement of claims. The work of non-governmental organizations is particularly valuable for consumers, who often lack the necessary resources to independently handle complex legal cases.
In summary, the regulations concerning the pursuit of claims arising from violations of competition protection laws are designed to ensure the effective protection of the rights of affected parties. The burden of proof placed on the defendant business, the expanded circle of affected parties, and the role of non-governmental organizations are key elements that facilitate the enforcement of claims by injured parties. As a result, violations of competition protection regulations carry serious legal consequences, which aim to remedy the damages incurred and ensure fair competition in the market.
Summary
Violation of competition law can result in serious legal consequences – both civil and administrative – as well as personal liability for managers. Adhering to the principles of fair competition is not only a legal obligation but also the foundation of a healthy market and the protection of consumer interests.
To ensure compliance with competition law, it is essential to secure legal support from a professional specializing in this area. At SURÓWKA Law Firm, we are one of the few firms in Poland that comprehensively handle cases related to competition law. Our clients are guaranteed expert assistance and excellent service – we stand out for our proactivity and initiative, ensuring that each client is regularly and thoroughly informed about the progress of their case. It is important to note that our expertise extends beyond business law in Kraków to include services in other areas, namely:
- criminal law Krakow,
- divorce cases Krakow.
- company services Krakow,
- company formation Krakow,
- bankruptcy of entrepreneurs Krakow,
- company liquidation Krakow,
- company division Krakow,
- company agreements Krakow,
- debt collection Krakow.
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