Changes in Competition Policy Over the Last Two Decades Office of Competition and Consumer Protection Plac Powstańców Warszawy 1 Decades Over the Last Two Changes in Competition Policy 00-950 Warsaw, Poland tel. +48 22 55 60 800 e-mail: [email protected] www.uokik.gov.pl Changes in Competition Policy Over the Last Two Decades Edited by Dr Małgorzata Krasnodębska-Tomkiel Warsaw 2010 This publication marks the 20th anniversary of the Polish Office of Competition and Consumer Protection Office of Competition and Consumer Protection Plac Powstańców Warszawy 1 00-950 Warsaw, Poland www.uokik.gov.pl Copyright 2010 Office of Competition and Consumer Protection All rights reserved. No part of this book may be reproduced, stored or processed as a source of data in any form without the prior written permission of the Office of Competition and Consumer Protection. ISBN 978-83-60632-52-9 CONTENTS FOREWORD 7 ChAPTER I COMPETITION-RESTRICTINg practices 9 Scott Hammond and Ann O’Brien ThE EvOluTION OF Cartel ENFORCEMENT OvER ThE Last TWO Decades: ThE u.S. PERSPECTIvE 11 Alberto Heimler PAyMENT CARDS PRICINg Patterns: ThE ROlE OF ANTITRuST AND REgulatory AuThORITIES 27 René Jansen and Ayesha Budd NMA’S BAPTISM OF FIRE: BID-RIggINg IN ThE DuTCh CONSTRuCTION SECTOR 49 Peter Klocker FIFTy yEARS OF ANTI-Cartel ENFORCEMENT IN gERMANy – DEvElOPINg AND IMPROvINg ThE SySTEM 65 Bruno Lasserre MAKINg ThE MOST OF ThE FRENCh ANTI-cartel ENFORCEMENT portfolIO 75 Grzegorz Materna COllECTIvE MANAgEMENT OF RIghTS – ThE ROlE OF ThE COMPETITION AuThORITy AgAINST ThE BackgROuND OF COPyRIghT Law 91 Elżbieta Modzelewska-Wąchal CONSuMER PROTECTION IN ThE POlISh COMPETITION ACT. hORIzontal ISSuES 107 Mercedes Pedraz Calvo COMPETITION AuThORITIES’ POWER OF INvESTIgation AND RESPECT OF Fundamental RIghT: INvIOlABIlITy OF DOMICIlE 115 3 Marta Sendrowicz PARAllEl TRADE AND ThE lIMITS TO ADMISSIBlE ACTIvITy OF DOMINANT PharmaceuticalS Companies IN ThE Case Law OF ThE COurt OF JuSTICE OF ThE EuROPEAN uNION 129 Bohdan Wyżnikiewicz BuSINESS CyClES AND uNlawful AgREEMENTS 141 ChAPTER II MERgER CONTROl 149 Jan Krzysztof Bielecki SElECTED ASPECTS OF COMPETITION AND CONSuMER PROTECTION IN BANK MERgERS 151 Jacques Bourgeois and Cormac O’Daly hARD TIMES: EMPlOyMENT ISSuES IN Eu MERgER CONTROl 163 Peter Freeman A vIEW FROM ThE COMPETITION COMMISSION ON ThE uNITED KINgDOM MERgER PROCEDuRE 175 Nicolas Petit and David Henry Why ThE Eu MERgER REgulation ShOulD NOT ENJOy A MONOPOly OvER Tacit COlluSION 181 Stanisław Sołtysiński, Krzysztof Kanton CRITERIA FOR NOTIFyINg INTENDED MERgERS TO ThE PRESIDENT OF ThE OFFICE OF COMPETITION AND CONSuMER PROTECTION – DE lEgE Lata AND DE lEgE Ferenda COMMENTS 199 Jarosław Sroczyński WhEN CAN A MERgER Threaten COMPETITION? 211 Walter A. Stoffel International MERgERS: SWISS ExPERIENCE 221 Małgorzata Szwaj ThE EvOluTION OF MERgER CONTROl IN POlAND 231 4 Wojciech Szymczak DEFINITION OF ThE MARKET as A KEy ElEMENT IN ThE MERgER ASSESSMENT IN ThE Retail SECTOR 241 Stanley Wong Internationalisation OF MERgER REvIEW: SOME ChAllENgES IN DESIgNINg AN EFFECTIvE SySTEM 265 ChAPTER III gRANTINg AND MONITORINg OF State AID 277 Barbara Brandtner State AID REFORM – ThE State AID ACTION PlAN 279 Claudia Dörr PROvISIONAl lEgAl FRAMEWORK OF ThE EuROPEAN COMMISSION FOR state AID TO facilitate access TO FINANCE FOR FINANCIAl INSTITuTIONS DuRINg ThE CuRRENT FINANCIAl AND ECONOMIC CRISIS 297 Leigh Hancher ThE TEMPORARy FRAMEWORK AND ThE REAl ECONOMy 309 Hanna Jahns ThE COhESION POlICy OBJECTIvES AND ThE State AID CONTROl IN ThE CONTExT OF uSINg STRuCTuRAl FuNDS IN POlAND 327 Magdalena Kąkol ECONOMIC rationalE FOR Supporting ENTERPRISES FROM PuBlIC RESOuRCES – ECONOMIC EFFICIENCy assessment 339 Soultana Paschalidou RECOvERy OF uNlawful AND IncompatiblE State AID – AgAINST All ODDS? 363 Mikołaj Stasiak SElECTED ISSuES RElating TO State AID IN ThE transport SECTOR 375 ChAPTER Iv COMPETITION POlICy ChAllENgES 387 Henryka Bochniarz COMPETITION as A FOundation OF MARKET ECONOMy 389 5 Gergely Csorba, Virág Balogh and Balázs Pálvölgyi COMPETITION POlICy ChAllENgES IN ThE Retail SECTOR: SOME huNgARIAN ExPERIENCES 397 Anna Fornalczyk ThE BEgINNINgS OF COMPETITION POlICy IN POlAND 413 David J. Gerber glOBAlIzation, EuROPEANIzation AND COMPETITION Law: Locating EuROPE, Locating POlAND 429 Stanisław Gronowski COMPETITION JuDICIARy IN POlAND 443 Knut Eggum Johansen and Kjell J. Sunnevåg Understanding ThE MARKETS FOR SERvICES OFFERED vIA ElECTRONIC Networks 455 William E. Kovacic CONvERgENCE AND DIvERgENCE IN ThE Eu AND uS COMPETITION POlICy 469 Małgorzata Krasnodębska-Tomkiel PERSPECTIvES OF COMPETITION POlICy IN POlAND: ON ThE 20Th ANNIvERSARy OF uOKIK 503 Philip Lowe MAKINg MARKETS WORK FOR CONSuMERS: ThE ChAllENgE IN EuROPE 529 Monika Tomczak-Górlikowska CAughT IN ThE NET – hOW ThE INTERNET ChANgED ThE Approach TO ThE APPlication OF COMPETITION Law RulES AND INTEllECTuAl Property RIghTS 539 Tomasz Wardyński COMPETITION ADvocacy as A TOOl Supporting COMPETITION Law 555 BIOgRAPhIC NOTES 565 REFERENCES 579 6 FOREWORD The events of 1989, when for the first time in almost half a century the people of Poland had the possibility to independently determine their future, initiated the process of economic transformation in this country. The introduction of the free market entailed a number of legislative changes. Among the legal acts laying down the foundations for the new system there was also the Act on counteracting monopolistic practices - the legal basis for the establishment of the Antimonopoly Office. Starting its operations in 1990, the new institution was not only to ensure that the newly obtained economic freedom does not evolve into anarchy, but also to shape the scope of this freedom. Therefore, apart from the responsibilities regarding counteracting monopolistic practices, the Office was also given the power to influence the structure of the economy by exercising control over the restructuring processes of enterprises. In the following years, the responsibilities of the authority were repeatedly increased and its priorities changed. In 1996, the Office received its present name - the Office of Competition and Consumer Protection - and since then has also been protecting the interests of non-professional market participants. Another significant change took place in 1999 when the Office started monitoring State aid. 1st May 2004, the day of Polish accession to the European union, was a turning point, although Polish competition and consumer protection law had been harmonised with the Community regulations much earlier. Within the last 20 years, for many reasons, the operations of competition agencies all over the world have undergone significant changes. This was mainly the result of the progressing globalization and dynamic technological development. Instruments used by the institutions to protect competition as well as respective legal provisions needed to evolve in parallel with the changing realities. This publication attempts to take a closer look at these changes. It is an exceptional platform bringing together voices of the leading figures in competition protection in Poland and internationally: heads of competition offices, representatives of international organizations, judges, economists and lawyers. The publication is divided into four parts. The first section is dedicated to competition policy and seeks to find out why efficient competition is the basis for a proper functioning and development of the market economy. The next two chapters concern merger control and State aid. These are the only cases when 7 competition authorities respond ex-ante – before any distortion of competition occurs. The final part of the book covers challenges standing before competition policy. The continuously growing importance of information technology in social relations and economy has reshaped the way that enterprises operate now. Both their organisation and the way they operate on the market are determined to a growing extent by new technologies and high-tech means of communication. Competition authorities have to respond to these changes. Importantly, many papers in the publication are dedicated to competition policy in the time of crisis. This is fully justified as many economies are still struggling with the effects of the current economic downturn. Concluding, I would like to express my gratitude to all the authors for devoting their time and energy to prepare articles for this publication and thus mark the 20th anniversary of the Office of Competition and Consumer Protection. I hope you will enjoy the book. Małgorzata Krasnodębska-Tomkiel President of the Office of Competition and Consumer Protection 8 Chapter I COMPETITION-RESTRICTING PRACTICES Scott Hammond and Ann O’Brien ThE EvOluTION OF Cartel ENFORCEMENT OvER ThE Last TWO Decades: ThE u.S. PERSPECTIvE 1. INTRODUCTION In 1990, the sanctions in cartel cases brought by the Antitrust Division of the u.S. Department of Justice were not sufficiently severe and the original Corporate leniency Program was simply not producing cases. Two decades later, the landscape has dramatically changed in cartel enforcement in the united States and around the globe. The world has seen the proliferation of effective leniency programs, ever-increasing sanctions for cartel offenses, a growing movement to hold individuals criminally accountable, and increased international cooperation among enforcers in cartel investigations. The Antitrust Division has spent the last two decades building and implementing a “carrot and stick” enforcement strategy