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Archive for: Polish Act on Protection of Competition and Consumers

Abusive clauses in B2C IT contracts, decision no. RKT-38/2013

February 24th, 2014, Tomasz Rychlicki

According to the provisions of Article 7 of the Act on the Protection of Consumer Rights and Liability for Damage Caused by a Dangerous Product – PRCLL – (in Polish: o ochronie niektórych praw konsumentów oraz o odpowiedzialności za szkodę wyrządzoną przez produkt niebezpieczny) of 2 March 2000, published in Journal of Laws (Dziennik Ustaw), No 22, item 271 with subsequent amendments, the consumer who concluded the so-called “distance contract” may withdraw from it without giving reasons, by way of an appropriate written statement, within the period of ten days from the conclusion of the contract. The “distance contract” or contracts concluded at a distance are defined as contracts concluded without simultaneous presence of both parties, in which one party is deemed as a consumer (a natural person not performing any business activities), by way of a use of means of communication at a distance, in particular order form without the address or addressed, serial letter, press advertising with a printed order form, catalogue, telephone, radio, television, automatic calling machine, videophone, videotext, electronic mail, facsimile machine, provided that the party to the contract with the consumer is the entrepreneur who organised in such a way its business activity.

The Polish Company Decoratum, owner of endo.pl website that sells children clothes, provided the TOS according to which a consumer willing to withdraw from a purchase, has had to return the purchased goods in order to make the withdrawal legally effective. However, such provisions are inconsistent with the PRCLL. The Act does not require the consumer to perform any additional actions, except filing a written statement (declaration of will to withdraw from a contract). The President of the Office of Competition and Consumer Protection initiated proceedings against Decorum and found that the company did not provided its consumers proper written information that they have the right to return purchased products. The President in its decision of 21 November 2013 no. RKT-38/2013 ordered the Company to pay a fine in the amount of 15.084 PLN. The entrepreneur abandoned the use of the challenged practices so it was possible to decrease the financial penalty. The decision is final.

Collective interests of consumers, case RPZ 11/2012

July 27th, 2012, Tomasz Rychlicki

The President of the Office of Competition and Consumer Protection in its decision of 20 June 2012 no. RPZ 11/2012 ruled that the Polish company Creative Team S.A. infringed on collective interests of consumers, by posting in newspaper advertisements that concerned a dedicated interactive game for mobile phones entitled “Tank War”, of information suggesting a possible free use of that game, while free was just sending a text message to a specified number in order to download this application, and using it in a specific mode. The President decided that such actions were inconsistent with the provisions of the Polish Act of 16 February 2007 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 subsequent amendments.

Creative Team S.A. filed an appeal complaint before the Polish Court of Competition and Consumer Protection.

Categories: e-law issues | Polish Act on Protection of Competition and Consumers | Polish Court of Competition and Consumer Protection | Polish law | President of the Office of Competition and Consumer Protection.

Unfair commercial practices, case VI ACa 1179/11

February 20th, 2012, Tomasz Rychlicki

The President of the Office of Competition and Consumer Protection in its decision of 29 August 2008 case DOK – 6/2008 ruled that two Polish collecting societies, the Association of Writers and Composers (Stowarzyszenie Autorów – ZAiKS) and the Polish Filmmakers Association (Stowarzyszenie Filmowców Polskich – SFP), were involved in actions deemed as infringement of competition on the relevant market. This decision concerned the agreement on uniform rates of copyright remuneration that were collected from commercial users for the sale of audiovisual works on media intended for private use. The request to initiate antimonopoly proceedings was filed by the Polish Press Publishers Association (Izba Wydawców Prasy – IWP) based on the provisions of the Polish Act of 16 February 2007 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 subsequent amendments.

IWP claimed that ZAiKS and SFP are competing entities because they are active on management and collecting in the same fields of exploitation of copyrighted works, and authors, creators and copyright owners can freely choose the collecting society they want to be represented by.

The President of the OCCP found that ZAiKS and SFP decided that the minimum remuneration rates for one copy of the media will be for a movie on DVD – 2 PLN, for a movie on VCD and VHS- 1,1 PLN, for a cartoon movie on DVD – 1.6 PLN, and for a cartoon movie on VCDs and VHS – 0,8 PLN. Minimum rates for a copy of audiovisual work on the media that are sold together with other products, including, in particular newspapers and magazines were set on an even lower level. For instance for a DVD that was put on the market before 1 July 2004 – 1 PLN, and from 1 July 2004, 0.60 PLN, There were also introduced discounts from 5% to 40% depending on the number of copies (from 100.000 to above 700.000 copies).

Members of IWP, who are press publishers, are also contractors of ZAiKS and SFP. The Press publishers add copies of DVD movies to their newspapers and magazines, as the so-called inserts. They are required under the provisions of Polish copyright law to pay appropriate remuneration for the reproduction of the audiovisual work on the copy for individual use. The remuneration fee is paid by the press publishers only through the collecting society. IWP argued that the remuneration of the authors for use of audiovisual works should be individualized, and the conditions of agreement to use the work should be negotiated. The collecting societies should negotiate different rates for different movies. Such actions would prove the real concern for the interests of every member of each collecting society, because the authors of a better movie should earn more. The rates covered by the agreement between ZAiKS and SFP did not include possible revenues from the use of audiovisual works, nor the specifics of this use. Thus, according to the IWP, the agreement of ZAiKS and SFP on the application of uniform rates, deprived commercial users the possibility to negotiatie the rates, and significantly restricted competition.

ZAikS and SFP filed complaints against the decision of the President of the OCCP. The Polish Court of Competition and Consumer Protection in its judgment of 8 July 2011 case file XVII AmA 23/09 dismissed them. The Appeallate Court in Warsaw in its judgment case file VI ACa 1179/11 dismissed the appeal.

Collective interests of consumers, case III SK 44/10

May 9th, 2011, Tomasz Rychlicki

Terms of Service of Domeny.pl website contained a clause that allowed Domeny.pl to introduce changes in TOS and it also included a statement that the changes take effect “from the time a new version is available on the website”. The President of the Office of Competition and Consumer Protection decided that this provision violates the collective interests of consumers as they should be always informed about amendments to the terms. Otherwise they would have to constantly check to see if TOS has not been modified. The President ordered the removal of the questioned terms of service. Domeny.pl filed a complaint against this decision. The Supreme Court in its judgment of 12 April 2011 case file III SK 44/10 dismissed the complaint.

Collective interests of consumers, case XVII Ama 125/08

November 26th, 2009, Tomasz Rychlicki

A person who bought CHIO CHIPS produced by the Lorenz Bahlsen Snack-World, filed a complaint to the representation of the Office of Competition and Consumers Protection in Wrocław. This dissatisfied consumer argued that being in the store, he chose CHIO chips and not the other products that were sold in a similar price, because he was attracted by a draw where he could win some nice prizes. However, he became disappointed because when he did open the package and read the coupon, it turned out that the draw was already over. The date of the draw was shown on the inside part of a special bar attached to chips’ bag, but it could be difficult to read after the break of the package. Because of the lack of a clear declaration with regard to the end date of the draw, the Company was fined 22000 PLN for the practice of contravention of collective interests of consumers. According to the Polish Act on Protection of Competition and Consumers – APCC – (in Polish: Ustawa o ochronie konkurencji i konsumentów) 16 February 2007 published in Journal of Laws (Dziennik Ustaw) No. 50, item 331, with subsequent amendments, it was a violation of the obligation to provide consumers with reliable, true and complete information regarding the product.

The Polish Court of Competition and Consumer Protection upheld the contested decision in its judgment, case file XVII Ama 125/08. Such essential information as the period of promotion/draw or the validity date of the product cannot be hidden inside the bar of the package and thus not visible at first glance. Such information must be readily available. The Court ruled that the date of a draw should be indicated clearly on the product packaging and incomplete information is misleading. The judgment is not final yet, the company may file an appeal.

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: ), published in 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, published in 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), published in 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), published in 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.

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 Polish Act of 16 February 2007 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 subsequent amendments, define an entrepreneur very broadly. According to the Court, this definition will even cover such entities whose activity is not associated with a typical business. Therefore, there was no reasons to deny such a status to the Polish Association od Writers and Composers (Stowarzyszenie Autorów – ZAiKS), a collecting society. This argument was confirmed by the Supreme Court in its judgment of 7 April 2004 case 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.

The European Court of Justice in its judgment of 27 March 1974 Case C-127/73 BRT v. SABAM published in ECR 1974, p. 313, ruled that the association of authors can be deemed as an entrepreneur, because an association whose object is to exploit and manage copyrights for gain “pursues a business activity consisting in the provision of services in respect of composers, authors, and publishers”.

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“.

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 into 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.