Business concentrations are common and significant phenomena that constitute a part of modern economic activity. They include takeovers, mergers, the acquisition of assets, and even the creation of joint ventures. Their primary goal is typically to develop companies and increase competitiveness and efficiency. They can also lead to a restriction of market competition. Therefore, the legislature has introduced the obligation to notify the President of the Office of Competition and Consumer Protection (UOKiK) of any intended concentration in cases where it may affect competition conditions in Poland. This article will discuss when an enterprise must notify the President of the Office of Competition and Consumer Protection (UOKiK), what information should be included, and the procedure conducted by the President of the UOKiK.

Reporting the intention to concentrate

An undertaking is required to notify the intended concentration before implementing it. This is a necessary condition – notification must be submitted first, and only then the transaction must be finalized. The entity must assess whether it meets the required statutory requirements for such notification. Mandatory situations in which an intended concentration must be notified to the President of the Office of Competition and Consumer Protection include: the combined global turnover of the participating undertakings in the previous year exceeded EUR 1 billion; the combined annual turnover in the territory of the Republic of Poland exceeded EUR 50 million (as per Article 13, Section 1 of the Office of Competition and Consumer Protection); and the concentration does not have a Community dimension. This obligation applies to both Polish and foreign undertakings, provided that the effects of the concentration must occur in the territory of the Republic of Poland. Furthermore, the Act also covers extraterritorial concentrations if the effects could potentially occur in the territory of the Republic of Poland. A concentration is not subject to notification if the new entity does not plan to enter the Polish market within three years, and the market of such an undertaking does not produce any effects or overlaps with Polish markets.

Forms of concentration

The most common form of concentration in practice is primarily a business combination (referred to in Article 13, Section 2, Item 1). A merger can take two forms. The first is incorporation, where all assets of the company being acquired are transferred to the acquiring company in exchange for specific shares/stocks granted to the shareholders of the acquired company. The next form is a merger, which involves the creation of a new company that takes over the assets of all merging entities. An intention to concentrate, regardless of whether it is an incorporation or a merger, can be declared by all entrepreneurs, as each of them is a party to such proceedings.

Another form of concentration is the acquisition of control. This refers to the ability to exert decisive influence over another entity, and can therefore take a direct or indirect form. Such control can result from: holding a majority of votes at the shareholders’ meeting, the right to veto key decisions, the right to appoint or dismiss members of the management board or supervisory board, holding a majority of votes in a partnership, or even acquiring ownership of the enterprise or part thereof. This list is open-ended; any other situation that allows one entity to acquire control over another can be added to the above list. Control is also divided into specific types, which include, among others: Sole control – where one entity exercises control independently; joint control – where it is exercised by several entrepreneurs (e.g., when company members hold a 50/50 shareholding or one of them holds a majority and the other has a veto); positive control – where the right to make independent decisions; negative control – where the entity has the ability to block key decisions; and active and passive control – where the acquisition of control may result from factual circumstances (e.g., share redemption). The notification obligation arises in situations where there is an acquisition of sole control, an acquisition of joint control, a change in the type of control (from joint to sole or vice versa), and in situations where the composition of the jointly controlling entities changes. The obligation to notify the intended concentration rests with: in the case of an acquisition of control – the undertaking acquiring such control; in the case of a transition from joint to sole control – the undertaking acquiring sole control; In the event of a transition from sole to joint control, a new joint controlling party is appointed, and in the event of a change in joint controlling party, the intended concentration must be notified by the party joining the joint control. If there is only a replacement of a partner, the previous joint controlling party is not required to notify the intended concentration.

Another form of concentration is the creation of a joint venture. Two or more entrepreneurs create a new entity whose purpose is to perform the functions of an independent entrepreneur and operate on a lasting basis. This applies to companies, partnerships, and cooperatives, but does not include civil partnerships, where the entrepreneurs are the partners, not the company. Notification should also be submitted in special cases, such as the expansion of an existing joint venture into new markets or its function, which may have a specific impact on the market situation. The notification obligation rests with all entrepreneurs who form the joint venture; they may submit a single notification, or each may do so separately, although this remains a single procedure.

Another form of concentration is the acquisition of another company’s assets. This entity may acquire part of an enterprise, a production facility, a press title, a brand, or other assets with independent turnover. However, a necessary condition is that the assets must generate turnover in the territory of the Republic of Poland exceeding €10 million in at least one of the last two financial years. Only the acquirer of the assets must submit a notification. However, if the assets originate from multiple companies in the same group, it is treated as a single concentration, and the turnover of the assets is aggregated.

Non-reportable concentrations

Pursuant to Article 14 of the Act of 16 February 2007 on Competition and Consumer Protection (consolidated text: Journal of Laws of 2024, item 1616, as amended), there are also concentrations that are not subject to notification. This is a closed list, meaning that, apart from those listed below, all others must be notified. These include:

• Taking control of an entrepreneur with a turnover in the territory of the Republic of Poland below EUR 10 million (in each of the previous two financial years)
• Merger of enterprises when the turnover of each of them in the Republic of Poland is below EUR 10 million
• Establishment of a joint venture with a turnover of less than €10 million each
• Concentrations within the same capital group
• Temporary acquisition of shares by a financial institution for the purpose of resale
• Temporary acquisition of shares to secure receivables
• Concentrations during bankruptcy proceedings (with few exceptions)

Turnover issue

Each participant in a concentration is required to report the turnover achieved in its last completed financial year, which means that the financial year is not the same as the calendar year. If an entrepreneur closes their financial year, for example, in July, they use data from the period from July of the previous year, not January to December. Conversely, if one entrepreneur uses a calendar year while another uses a shifted year, each uses its own, which is intended to prevent manipulation of reporting periods. According to Article 4, item 15 of the Act on Competition and Consumer Protection, turnover includes: revenue from the sale of goods and services generated by the entrepreneur, reduced by: value added tax (VAT), excise tax, and various rebates and discounts. In particular, it does not include financial income, gains from the disposal of fixed assets, or internal settlements between companies operating in the same group. Certain sectors have specific rules for calculating turnover. For banks, revenue is the sum of income from banking activities (interest, commissions) less certain costs. For insurers, turnover is gross insurance premiums less payments due. For investment and pension funds, it is management revenue. Two types of turnover are used when assessing the obligation to notify a concentration: global turnover, which includes the sum of the turnover of all concentration participants (and their capital groups), regardless of the country in which the turnover was generated; and turnover within the territory of the Republic of Poland, which is only the portion of turnover related to the sale of goods and services in Poland, sales imported into Poland, and activities conducted for Polish contractors. This turnover does not include exports from Poland or turnover generated outside the territory of the Republic of Poland. If a company generates turnover in a foreign currency, it is converted to euros at the average euro exchange rate announced by the National Bank of Poland on the last day of the previous calendar year. This rule applies to both turnover within the Republic of Poland and global turnover.

Community dimension

Concentrations with a Community dimension fall under the exclusive jurisdiction of the European Commission. There is a basic threshold, where the worldwide turnover of all participants must exceed EUR 5 billion, and the turnover in the European Union of each of at least two participants must exceed EUR 250 million, with the exception of the 2/3 rule (when each participant generates more than two-thirds of its turnover in a single country). This stems from Article 1(2) of Regulation 139/2004. Furthermore, Article 1(3) mentions an alternative threshold: the worldwide turnover must exceed EUR 2.5 billion; the combined turnover in at least three EU countries must exceed EUR 100 million, and the turnover in the European Union of each of two participants must exceed EUR 100 million.

Deadline for submission

An intended concentration must always be notified before the concentration is implemented. The most common prerequisites for an intended concentration include a conditional agreement, a letter of intent, a preliminary agreement, and a tender offer for shares (in the case of public companies). Draft agreements, management board statements, or press releases are not sufficient. Until the President of the Office of Competition and Consumer Protection (UOKiK) issues approval, the parties are required to refrain from implementing the concentration.

Course of proceedings

Concentration proceedings take an administrative form and can be divided into several stages. They begin with the submission of a complete notification by the interested parties to the concentration. These stages include:

• Submission of the notification and formal verification – after the notification is submitted to the Office of Competition and Consumer Protection (UOKiK) Headquarters, the following is checked: the completeness of data and documents; if they are missing, the President requests the entrepreneur to complete them (the deadline for issuing the decision is not counted until the notification is completed); after the notification is deemed complete, the proceedings are formally initiated.
• Concentration analysis (proper procedure) – after receiving the notification, the President of the Office of Competition and Consumer Protection (UOKiK) conducts a market analysis, assesses the position of the concentration participants, and determines whether such a concentration could significantly restrict competition. Furthermore, the President may request additional information from the concentration participants, contractors, other entrepreneurs present in the market, state authorities, or foreign institutions.
• Decision – the proceedings may usually end in two stages; If the concentration does not raise any major doubts, the President of the Office of Competition and Consumer Protection (UOKiK) gives his consent or discontinues the proceedings (if the transaction is not subject to notification) – this usually lasts up to one month; on the other hand, if an in-depth analysis is needed, the proceedings may last up to 4 months in total, the UOKiK may examine the market more thoroughly and this occurs in situations where the parties have high market shares, the markets are highly concentrated and there is a risk of dominance emerging
• Decisions – The President of the Office of Competition and Consumer Protection (UOKiK) may: issue consent to the concentration, issue conditional consent (i.e., impose certain measures to ensure its success: divestment of part of the assets, deactivation of the brand, guaranteeing access to infrastructure), and prohibit the concentration (if such a concentration could clearly lead to a restriction of competition). The decision is delivered to the parties, and its content is published on the UOKiK website.
• Appeals – An appeal against a decision may be filed with the Court of Competition and Consumer Protection, and then with the Court of Appeal. Filing an appeal does not suspend the enforcement of the decision unless the Court issues a ruling to that effect.
• Sanctions – Until consent is obtained, entrepreneurs cannot carry out a concentration (standstill obligation), and the violation of such an obligation may result in a fine of up to 10% of turnover and invalidates the effects of the concentration

Summary

Notifying an intended concentration is an extensive procedure that includes: assessing turnover thresholds (both domestically and globally), analyzing the transaction’s impact on the Polish market, identifying the parties to the process (both who participates and who is obligated to notify the intention), and considering numerous exceptions and specific rules. This clearly defined procedure for intended concentration notification prevents the creation of structures aimed at restricting competition. Furthermore, it facilitates market monitoring by the Office of Competition and Consumer Protection (UOKiK) and, in larger-scale concentrations, by the European Commission.

Artykuł Business concentrations – EU and Polish rules pochodzi z serwisu KIELTYKA GLADKOWSKI LEGAL | CROSS BORDER POLISH LAW FIRM RANKED IN THE LEGAL 500 EMEA SINCE 2019.

In the Polish legal system, competition protection regulations, particularly the Act of 16 February 2007 on Competition and Consumer Protection provide for the possibility of imposing financial penalties not only on enterprises but, since the amendment to the 2015 Act, also on individuals managing enterprises. In recent years (in fact, such a sanction was first applied in 2020), the President of the Office of Competition and Consumer Protection (UOKiK) has been increasingly using this mechanism. This article will discuss key legal provisions concerning the liability of managers and the practices of administrative bodies in imposing sanctions.

Legal basis

The legal basis for imposing financial penalties on business managers is Article 106a of the Act on Competition and Consumer Protection. This regulation allows for the imposition of a financial penalty on a manager in the event of an enterprise deliberately allowing a violation of the prohibition on anticompetitive agreements. This penalty is administrative in nature, but the Act sets a maximum limit of PLN 2 million or PLN 5 million for financial institutions. The President of the Office of Competition and Consumer Protection, when determining the amount of the penalty, takes into account the degree of influence of the manager’s behavior and the revenue they generated, allowing for appropriate adjustments to the specific circumstances of the case.

To date, fines imposed on managers have typically not reached the maximum amount of PLN 2 million. The highest fines to date have involved cases involving cartels in the automotive market, such as a PLN 495,000 fine for a manager’s participation in price collusion^[1]. In practice, the amount of the fine depends on factors such as the intent of the act and the impact of the violation, and the sanctions vary, taking into account the specific circumstances of the violations and the degree of intent of the managers’ actions.

The regulations also allow for the possibility of imposing a fine on a manager who intentionally violates the anti-competitive prohibition. This rule complements Article 6a of the Act, which specifies the principles of liability of individuals for the anti-competitive activities of their enterprises. There is the convergence of the prerequisites for liability and the conditions for imposing a fine, such as intentionality and permitting the violation. The procedure for imposing a fine on an individual is closely linked to the simultaneous punishment of the entrepreneur – without sanctions for the enterprise, the manager cannot be punished.

Imposing such a penalty on a manager is only possible if the company is also penalized for the same violation in the decision. However, if a manager has already been penalized as an entrepreneur, they cannot be penalized again for the same offense. The regulations also provide for the possibility of immunity from liability for managers who cooperate with competition authorities under a leniency program. To benefit from such immunity, the person must actively support the proceedings and submit an appropriate application before the President of the Office of Competition and Consumer Protection (UOKiK) notifies them of the initiation of proceedings.

In the case of an application for leniency submitted to the competition authority of another EU Member State, the President of the UOKiK may request from that authority the information needed to confirm that the conditions for exemption from the penalty are met.

Definition of a manager

Under the Competition and Consumer Protection Act, a manager includes not only members of the management board of an enterprise but also other individuals who have a real influence on economic decision-making. The formal definition of “manager” contained in Article 4, Section 3a of the Competition and Consumer Protection Act refers to a person who manages an enterprise, which includes, in particular, individuals who hold managerial positions or are members of the enterprise’s management body. This means that the Act does not directly list all possible roles, but rather formulates it more flexibly, using the phrase “in particular”, meaning that the list of managers is open-ended. This formulation paves the way for the interpretation that liability may also apply to other individuals who de facto manage the enterprise, although they are not necessarily formally members of the management board.

The Act, therefore, does not limit the definition to management board members, but rather refers to those managing the company. This means that other individuals performing important decision-making functions, such as directors, chief accountants, procurators, or supervisors, may be considered managers. In practice, such individuals have a real influence on the company’s operations, and their actions may constitute grounds for liability, even if they do not formally serve on the management board. The judgment of the Court of Competition and Consumer Protection of April 18, 2019 (XVII AmA 7/17) (Judgment of the Court of Competition and Consumer Protection in Warsaw of April 18, 2019, XVII AmA 7/17, LEX No. 2669187) indirectly indicates the potential liability of individuals managing an enterprise or having a real influence on its decisions due to the manner in which the disclosure obligations imposed on entrepreneurs are handled. In the justification of the judgment, the Court emphasizes that the enterprise – represented by the management board or persons with decision-making powers – is obligated to provide information at the request of the President of the Office of Competition and Consumer Protection. Although the requests are formally addressed to the company, failure to comply depends on the actions or omissions of the individuals managing the enterprise. The Court notes that an entrepreneur, including its management board, is obligated to timely provide the requested documents, and failure to comply with this obligation leads to the imposition of sanctions.

In a situation where natural persons who are formally or actually responsible for managing an enterprise fail to fulfil such obligations, then based on a broad interpretation of the provisions of the Act on Competition and Consumer Protection (Article 106a of the Act), the President of the Office of Competition and Consumer Protection may also hold these persons liable. Although the judgment concerns the liability of the company as an entity, individuals with a real influence on the company’s operations, such as board members, directors, or procurators, may be held liable if their actions or omissions lead to a breach of obligations imposed on the company. The judgment indicates that reporting obligations arise from statutory provisions, and failure to comply with them—even indirectly, by decision-makers—may lead to sanctions.

Types of violations

Violations that may result in a fine for a manager are closely related to the prohibition of anticompetitive practices set forth in Articles 6 and 9 of the Competition and Consumer Protection Act. Article 6 of the Competition and Consumer Protection Act prohibits restrictive agreements, such as price fixing, market or customer allocation agreements, or limiting market access. Article 9 of the Competition and Consumer Protection Act prohibits the abuse of a dominant position by enterprises, which may manifest itself through unfair price increases, production restrictions, or discrimination against contractors.

In practice, the most frequently punished offenses are price fixing and the setting of minimum selling prices, which restrict market competition. Managers who directly influenced such practices or, through their inaction, tolerated such actions may be subject to financial penalties. A key element of these cases is demonstrating that the violation was intentional—that the manager knowingly initiated or tolerated the anticompetitive practice while being aware of its negative impact on the market.

Financial sanctions

As previously mentioned, the maximum fine that can be imposed on a manager is PLN 2 million. Importantly, the fine is determined proportionally to the scale of the violation and the manager’s individual responsibility. The authority assesses both mitigating circumstances, such as cooperation with the Office of Competition and Consumer Protection (UOKiK) under leniency programs, and aggravating circumstances, such as long-term participation in anti-competitive practices.

Leniency programs

The Competition and Consumer Protection Act also provides for the possibility of benefiting from a leniency program, which allows individuals and businesses to receive a more lenient penalty in exchange for voluntarily reporting a violation and cooperating with antitrust authorities. Pursuant to Article 113 of the Competition and Consumer Protection Act, the first business or individual to notify the Office of Competition and Consumer Protection (UOKiK) of the existence of a cartel or other anti-competitive agreement may receive a partial or complete waiver of the penalty. However, this is conditional upon providing complete information and evidence that will enable the authority to conduct an effective investigation.

For individuals, participating in a leniency program can be particularly beneficial, as if they become aware of violations and voluntarily report them, they can avoid very high fines. In practice, this means that managers who cooperate with authorities in a timely manner can significantly mitigate their potential financial consequences.

Administrative liability and civil liability

Fines imposed by the President of the Office of Competition and Consumer Protection (UOKiK) are administrative in nature, meaning they are not strictly criminal sanctions. However, in some cases, a manager’s actions may also lead to civil liability. An example would be a situation in which a competing enterprise has suffered losses due to anti-competitive conduct and decides to pursue compensation in a civil court. Under Article 415 of the Civil Code, a manager who committed an infringement may be obligated to compensate for the harm caused by anti-competitive conduct. In turn, injured enterprises may also pursue compensation under private enforcement, which allows for the possibility of pursuing civil claims for competition law violations.

Contractual action – a key element of responsibility

In the context of managerial liability, a key element is demonstrating intent. Pursuant to Article 106a, Section 1 of the Act on Competition and Consumer Protection, a fine may be imposed on a managerial person only if the violation of competition law was intentional. In practice, this means that the President of the Office of Competition and Consumer Protection must prove that the person knowingly caused the violation or failed to take appropriate measures to avoid it. Administrative liability in this case requires precise documentation that the manager was aware of the illegal practices and knowingly made decisions leading to the violation.

Summary

Modern competition law clearly extends liability for anticompetitive practices to corporate managers. Article 106a of the Competition and Consumer Protection Act provides the President of the Office of Competition and Consumer Protection with the tools to impose severe financial penalties on individuals who had a real impact on decisions leading to a violation of competition rules. These sanctions are intended to increase the effectiveness of competition protection by deterring managers from engaging in practices that restrict the free market. At the same time, the availability of leniency programs, such as leniency programs, encourages cooperation with antitrust authorities, which can benefit both individuals and businesses.

^[1]https://decyzje.uokik.gov.pl

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