Polish IP & IT law » President of the Office of Competition and Consumer Protection

Archive for: President of the Office of Competition and Consumer Protection

Abusive clauses in B2C IT contracts, case RWR 61-23/09/ZK

April 9th, 2010, Tomasz Rychlicki

The owners of hosting service available at pobieraczek.pl website advertised their business using slogans suggesting that the hosting and downloading of different files (mostly copyrighted material) is free. Advertising banners displayed “10 days to download for free” and “Yes, I want to test for 10 days”. However, users who wanted to host or to download files had first to register on the site, giving their name, address, date of birth and e-mail. The requirement was also to accept of the Terms of Service. The user registration date was also the first day of consideration of the contract which was concluded even for a year. In addition, the payment was charged from day one, and not, as the advertising slogans suggested after 10 days.

Following numerous complaints, the President of the Office of Competition and Consumer Protection initiated investigation proceedings based on article 4(1) and (2) and article 5(1) of the Polish Act of 23 August 2007 on combating unfair commercial practices – CUCP – (in Polish: ustawa o przeciwdziałaniu nieuczciwym praktykom rynkowym), Journal of Laws (Dziennik Ustaw) No. 171, item 1206.

Article 4
1. A commercial practice used by a trader in relations with consumers shall be unfair whenever it is contrary to good customs and significantly distorts, or may distort, the economic behavior of the average consumer prior to, during or after the conclusion of a product contract.
2. In particular, a commercial practice shall be regarded as unfair whenever it is misleading or aggressive and whenever a code of conduct is used that is contrary to law, if such activities meet the conditions set forth in section 1 above.
(…)
Article 5
1. A commercial practice shall be regarded as a misleading action if, in any way, it causes, or may cause, an average consumer to take a transactional decision, which he/she would not have otherwise taken.

The President of the Office of Competition and Consumer Protection, Wrocław Delegacy, in a decision of 31 March 2010, no. RWR 61-23/09/ZK, ruled that owners of the pobieraczek.pl website were involved in practice infringing collective consumer interests. The President imposed a fine of up to 119570 PLN paid into the state budget on each of the two partners of a civil partnership who runs the questioned business activity.

This decision is not yet final. A complaint may be filed to the Court of Competition and Consumer Protection.

Polish regulations on prohibited contractual provisions

April 8th, 2009, Tomasz Rychlicki

I. The Law
The main sources of binding laws in the Republic of Poland are the Constitution of 2 April 1997, acts passed by the Parliament, ratified international treaties and regulations issued, for example, by the Prime Minister or the Council of Ministers – Polish government. Regulations are issued for the purpose of implementation of acts.

I.A. Substantive law

Act of 16 April 1993 on Combating Unfair Competition – CUC – (in Polish: ustawa o zwalczaniu nieuczciwej konkurencji), Journal of Laws (Dziennik Ustaw) No. 47, item 211, with later amendments.
Act of the protection of certain consumer rights and on the liability for damage caused by a dangerous product – PCCR – (in Polish: ) , Journal of Laws (Dziennik Ustaw) of 31 March 2000, No. 22 , item 271.
Act on protection of the purchasers of the right to use a building or residential unit for a specified time each year and on amendment to the Civil Code, Code of Minor Offenses,and the Law on Land and Mortgage Registers and Mortgage, Journal of Laws (Dziennik Ustaw) of 2000, No. 74, item 855.
Act on specific terms and conditions of consumer sale and amendments to the Civil Code.
Act of 16 February 2007 on competition and consumer protection, Journal of Laws – CCP – (in Polish: Ustawa o ochronie konkurencji i konsumentów), Journal of Laws (Dziennik Ustaw) of 2007, No. 50, item 331.
Act of 23 August 2007 on combating unfair commercial practices – CUCP – (in Polish: ustawa o przeciwdziałaniu nieuczciwym praktykom rynkowym), Journal of Laws (Dziennik Ustaw) No. 171, item 1206.

I.B. Case law
See “Polish case law on abusive clauses in B2C IT and IP contracts“.

II. Prohibited contractual provisions
Prohibited contractual provisions or “abusive clauses” are understood as provisions of the contract concluded with the consumer that were not agreed individually and in consequence shape consumer’s rights and obligations in a manner contrary to good customs and grossly violate consumer’s interests. Such provisions are not binding on the consumer, but the parties are bound by other provisions of the contract.

In accordance with the provisions of article 385³ of the Civil Code, if in doubt – it is considered that unlawful contractual provisions are those that, in particular:

exclude or seriously limit the liability to the consumer for failure to perform or improper performance of an obligation,
provide provisions, of which the consumer was unable to get acquaint with before concluding the contract,
impose solely on the consumer an obligation to pay a fixed sum in the case of the resignation from the conclusion or performance of the contract,
impose on the consumer, who has not performed the obligations or departed from the contract, the obligation to pay grossly inflated penalty or smart money,
exclude the jurisdiction of Polish courts or submit the matter to a Polish or foreign arbitration court, or other authority, and impose the adjudication by the court which is not locally relevant according to the Civil Code.

These are couple of examples of the so-called “gray abusive clauses”.

III. Procedure
The District Court in Warsaw, the Court of Competition and Consumer Protection decides if a given provision is prohibited and abusive. Anyone who has been or may be offered a contract containing such a clause, consumer organizations, consumer ombudsmen and the President of the Office of Competition and Consumer Protection may bring an action before the Court. Consumers may obtain assistance from the local consumer ombudsman or one of the state-funded consumer organizations.

The clauses which have been found abusive by a final decision of the Court are entered into the Register of Prohibited Clauses that is available on the website of the President of the Office of Competition and Consumer Protection and as of this moment cannot be used in relations with consumers. The application of such clauses may be regarded as an infringement of collective consumer interests and may result in a fine of up to 10% of the trader’s revenue.

Unfair commercial practices, case DOK-6/2008

September 4th, 2008, Tomasz Rychlicki

In December 2005, the OCCP instituted antitrust proceedings against ZAiKS and the Polish Filmmakers Association (SFP), suspecting that – in order to maximise their profits – these organisations had made an agreement and fixed uniform charges for using audiovisual works and refused to negotiate their rates.

Penalties for a total of more than $ 1.2 million Polish złoty were imposed by the Office of Competition and Consumer Protection (UOKiK) on The Association of Authors (ZAiKS) and the Polish Filmmakers Association (APF) because of their agreement “to eliminate competition between them”.

UOKiK has found that since 2003, ZAiKS and SFP, seeking to guarantee itself the highest profits, have operated under the unlawful antitrust agreement. SFP and ZAiKS concluded an agreement which established a uniform, rigid rates for the use of audiovisual works (such as DVD movies) and refused to negotiate them – announced Malgorzata Krasnodębska-Tomkiel (the President of the UOKiK) at a press conference in Warsaw.

The decision of the President of the Office of Competition and Consumer Protection of 29 August 2008, case file DOK-6/2008 The official press release is available at uokik.gov.pl website, in Polish language.

Copyright law, case VI ACa 1259/06

March 17th, 2008, Tomasz Rychlicki

The Appellate Court in Warsaw in its judgment of 17 October 2007 case file VI ACa 1259/06 held that the regulations provided in the Polish Act on Protection of Competition and Consumers – APCC – (in Polish: Ustawa o ochronie konkurencji i konsumentów) published in Journal of Laws (Dziennik Ustaw) No. 50, item 331, with later amendments, define the entrepreneur very broadly. This definition will even cover such entities whose activity is not associated with a typical business. This argument was confirmed by the Supreme Court in its judgment of 7 April 2004case file III SK 22/04, published in OSNP 2005/3/46.

The Court had no doubt that ZAiKS is active in providing professional services, in a structured and continuous manner, on its behalf, in the field of collective management of assigned copyrights, and thus it participates in business transactions. In applying the provisions of the APCC, “commercial purpose” as the last of the important parameters of economic activity means to obtain certain benefits for the operator of such activities. The use of such obtained benefits is, however, indifferent.

It was undisputed that ZAiKS grants licenses for fee, and it also collects appropriate fees for the management of assigned rights. Therefore it has a measurable financial benefits from its activities. The fact that these benefits are fully allocated to the statutory objectives does not mean, in light of the abovementioned comments that ZAiKS work has nothing to do with the commercial objectives.

The Court ruled that the Society of Authors ZAiKS being a non-profit organizations, is also a legal person providing services to the public, because it is organizing public access to creative activity, and licenses the use of this creativity. Therefore, ZAiKS is an entrepreneur as defined in the APCC.

See also “Polish regulations on copyright” and “Polish case law on copyright“.

Do not use copyright to frighten away

August 3rd, 2007, Tomasz Rychlicki

The fair use doctrine is not dead in the U.S. As you may read in the article available at arstechnica.com website. The Federal Trade Commission received a complaint filled by the Computer & Communications Industry Association against sports and media companies such as NFL, Major League Baseball, NBC Universal, Morgan Creek, DreamWorks, Harcourt Inc., and Penguin Group. The CCIA complaint concerns copyright warnings published by mentioned companies in their products. You might read about Wendy Sletzer’s “adventures” as regards to such warnings which I described in a post titled “Effective Wendy“. There is also a sample of copyright warnings issued by the NFL.

If you are from Poland then you probably recall yourself the case of copyright warnings published and distribiuted on DVDs by Vision Film Distribution and Warner Bros Poland. The President of the Office of Competition and Consumer Protection charged both companies of practices violating collective consumer interests and unfair competition delicts. Results of this proceedings are included in decisions no DDK-61–16-06/JK from May 25, 2007 and decision no DDK-5/2007 from January 31, 2007. Both PDF files, in Polish language.

Categories: Polish institutions | Polish law | President of the Office of Competition and Consumer Protection | US law | copyright law.