Record fine for hindering competition investigation

In a decision issued on 4 November 2010, the Polish competition authority imposed a record fine of PLN 123 million on Polska Telefonia Cyfrowa sp. z o.o., operator of the Era mobile phone network, for hindering an inspection by the Office of Competition and Consumer Protection.

The inspection was related to suspicions that PTC sp. z o.o., Polkomtel SA, P4 sp. z o.o., Info-TV-FM sp. z o.o. and NFI Magna Polonia SA may have entered into an anti-competitive arrangement concerning mobile phone services.

The fine arose out of events that took place on 2 December 2009. Inspectors holding authorisation from the president of the competition office and a warrant to conduct the search issued by the Court of Competition and Consumer Protection, accompanied by a police officer, entered the Era headquarters in Warsaw. They were not immediately admitted into the offices, however. Era staff refused to allow the inspectors to begin their work, asserting that they had to receive appropriate instructions from the PTC management board. The inspectors were kept waiting for over an hour. An aggravating factor in the case was that during that time, an internal meeting was held by PTC management board members, devoted to the mobile television project, which in the regulator’s view could show that the delay in admitting the inspectors was intended to enable the company to conceal or destroy material evidence.

The decision is not final yet, and may be appealed to the competition court.

“There is a chance that the court will reduce the fine imposed on Era,” commented Sabina Famirska from the Competition Law practice group at Wardyński & Partners. “The company’s degree of fault does not seem to justify such a drastic penalty.” What is more, Famirska explained, the Polish regulations concerning the procedure for inspections by the Office of Competition and Consumer Protection are not clear enough. On one hand the regulator is given authority to enter land, buildings or offices of a business that is under investigation, but the law clearly imposes a duty to allow entry only on the business or persons authorised to act for it (Art. 105d of the Act on Competition and Consumer Protection). “In the case of a limited-liability company, this duty thus rests on the members of the management board or specially appointed persons—not all employees of the company. The decision by the office also did not cite evidence that the delay was intended to conceal or destroy any evidence or could have had that effect.”