Polish IP & IT law » Polish Act on Combating Unfair Commercial Practices

Archive for: Polish Act on Combating Unfair Commercial Practices

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.

Poland: TESCO’s advertising was misleading

January 17th, 2008, Tomasz Rychlicki

Tesco Poland published a camcorder advertising leaflet in 2006. Consumers were informed that some models available in Tesco stores had colour viewfinders which in reality turned out to be black-and-white. The Office of Competition and Consumer Protection started a proceeding against Tesco Poland. The company issued a statement conceding that it did a mistake but that this mistake resulted from false information sent by a producer of the equipment. Tesco’s legal advisers also declared that well-informed consumer would not be misled by such promotional material. However, the Polish Court of Competition and Consumer Protection in Warsaw ruled that, according to Polish regulations, violation of rules of “due care” is a sufficient factor to determine liability for the delict of unfair competition.

Poland: unfair commercial practices

December 30th, 2007, Tomasz Rychlicki

The Act of 23 August 2007 on Combating Unfair Commercial Practices – CUCP – (in Polish: ustawa o przeciwdziałaniu nieuczciwym praktykom rynkowym) published in Journal of Laws (Dziennik Ustaw) No. 171, item 1206, came into force on 21 December 2007. It implemented the Directive 2005/29 of the European Parliament and of the Council of 11 May 2005 concerning unfair business-to-consumer commercial practices in the internal market and amending Council Directive 84/450, Directives 97/7, 98/27 and 2002/65 of the European Parliament and of the Council and Regulation 2006/2004 of the European Parliament and of the Council (“Unfair Commercial Practices Directive”).

Among others things, it defines in article 5(1) misleading commercial practices as actions connected with introduction of products into the market which may lead to mistake as regards to products, its packaging, trade marks, trade names or other signs capable of identifying entrepreneurs, particularly comparative advertising.

The Act also deals with crypto-advertising which is defined as using commentary content in mass-media sources to promote a product where the business/entrepreneur paid for such action but it is not clearly indicated in the content, images or sounds and it is not easily identified by the consumer.

The Act also covers aggressive commercial practices. It defines such actions as (i) onerous processes which are not connected with consumers’ actions or (ii) desisting from acting, i.e. inducing the purchase of products via phone, fax, electronic mail or other means used to communicate in distance.

Consumer protection, case III SZP 3/06

August 8th, 2006, Tomasz Rychlicki

The Supreme Court in its judgment of 13 July 2006, case file III SZP 3/06, ruled that the application of standardized agreements which provisions are identical with the provisions deemed as prohibited contractual provisions (abusive clauses) by the District Court in Warsaw, the Court of Competition and Consumer Protection, and were entered in the register kept by the President of the Office of Competition and Consumer Protection, may be considered in relation to another undertaking as the practice detrimental to/infinging on the collective interests of consumers.