Polish Competition Authority fines CCTV appliances manufacturer for dawn raid obstruction
Written By
Counsel
Poland
I am a counsel in EU & Competition Law and Tech & Comms team in Warsaw. I specialise in competition law and telecommunications law.
Senior Associate
Poland
I am a senior associate in the EU & Competition Law team at Bird & Bird.
On 28 November, the Polish Competition Authority (the “PCA”) announced that it has fined Dahua Technology Poland (“Dahua”), a manufacturer of electronic monitoring equipment, PLN 700,000 [approx. EUR 150,000] for obstructing a search conducted on the company’s premises.
The alleged obstruction is that, following the officials’ appearance at the inspected premises, one of the company’s representatives informed other staff via messenger app that the search had started. According to the press release, such information was shared despite the inspecting team’s requests not to do so. In its official statement, the PCA stated that such conduct eliminated the element of surprise, which is indispensable for effective searches in antitrust cases.
The non-confidential version of the Dahua decision is not available yet and the case is not final. If the decision is appealed, the judgment(s) will be relevant for the PCA’s investigative practice.
The case is part of the PCA’s antitrust probe into electronic monitoring equipment distribution systems. In October 2021, the PCA announced that it opened explanatory proceedings related to resale price maintenance in this market and conducted searches on the premises of some companies. In February 2022, it announced the opening of the infringement proceedings against Dahua relating to the search’s obstruction.
The PCA’s on-the-spot investigative powers in antitrust cases
Under Polish law, the PCA has two types of on-the-spot investigative powers in antitrust cases, namely (i) control (Polish: kontrola) and (ii) search (Polish: przeszukanie).[1]
The essential difference is that during a search the PCA has the power to forcefully overcome the resistance of the inspected company, e.g. by getting access to PCs. The control requires voluntary cooperation of the entity under investigation and is thus less intrusive.
In order to conduct a search, the PCA is obliged to obtain a search authorisation from the Competition Court. By the judgment of 16 January 2019, the Constitutional Court ruled that the inspected company should be able to appeal the search authorisation.[2] Furthermore, in Poland, it is possible to appeal the actions undertaken by the PCA inspectors during the control or search (e.g., when the inspectors collect evidence exceeding the scope of the investigation).
The above investigative powers should not be confused with a search of private premises (home raids). The PCA is however not known to conduct many home raids. We are only aware of one home raid authorisation motion filed by the PCA, but that motion was rejected by the Competition Court.[3]
Recent developments
The Dahua case is another major development for dawn raids in Poland. Apart from the already mentioned Constitutional Court judgment, the other milestone cases include:
- T-Mobile (2010), where the PCA imposed a fine of approx. PLN 123 million for obstruction of the immediate commencement of the search – the courts’ judgments which followed the decision are relevant for determining the starting point of the search;[4]
- Inco Veritas (2011), where the PCA fined the company PLN 2 million for employee conduct of transferring a file to the “Recycle Bin” folder – the approach as to the obstructive character of such conduct was maintained by the courts, including the Supreme Court;[5]
- Polkomtel (2011), where the PCA imposed a fine of approx. PLN 131 million on the telecom operator for delaying the search, and refusing to hand over selected documents and the hard disc;[6]
- Fitness case (2017), where the Competition Court prohibited PCA officials from searching digital copies of the evidence collected during the search outside the company’s premises;[7]
- Platinium Wellness (2021), where the gym operator was fined PLN 500,000 for changing an email password and refusing to communicate the new password to the inspectors.[8]
Future changes to the dawn raids in Poland
The draft legislation implementing the ECN+ Directive foresees some amendments concerning inspections, including the possibility of searching digital copies of evidence collected by the inspectors on the PCA’s premises.
The draft legislation also foresees the change of the maximum fine for non-cooperation during the inspection, from EUR 50 million to 3% of annual turnover.[9]
For more information, please contact Szymon Gołębiowski or Marcin Alberski.
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[1] Such distinction was introduced by the amendment of the Competition and Consumers Protection Act, which entered into force on 18 January 2015. Previously there was a distinction between: (i) control (kontrola) and (ii) control with search (kontrola z przeszukaniem).
[2] Constitutional Court judgment of 16 January 2019, P 19/17.
[3] Public information received from the PCA in April 2020.
[4] PCA decision of 4 November 2010, DOK-9/2010; Competition Court judgment of 20 March 2015, XVII AmA 136/11; Warsaw Court of Appeals’ judgment of 1 March 2017, VI ACa 1076/15; Supreme Court judgment of 10 September 2019, I NSK 46/18.
[5] PCA decision of 28 November 2011, DOK-9/2011; Competition Court judgment of 3 February 2014, XVII AmA 32/12; Warsaw Court of Appeals’ judgment of 30 January 2015, VI ACa 446/14; Supreme Court judgment of 21 April 2016, III SK 23/15; Competition Court judgment of 26 July 2017, XVII AmA 54/16; Warsaw Court of Appeals’ judgment of 4 October 2018, VII AGa 1205/18; Supreme Court order of 17 December 2019, I NSK 11/19.
[6] PCA decision of 24 February 2011, DOK-1/2011; Competition Court judgment of 18 June 2014, XVII AmA 145/11; Warsaw Court of Appeals’ judgment of 20 October 2015, VI ACa 1478/14; Competition Court judgment of 28 April 2017, XVII AmA 11/16; Warsaw Court of Appeals’ judgment of 3 April 2020, VII AGa 1123/18; Supreme Court judgment of 28 September 2022, I NSKP 17/21.
[7] Competition Court judgment of 7 March 2017, XVII AmZ 15/17.
[8] PCA decision of 28 January 2021, DOK-1/2021.
