Commission Report (2002): Poland

• Progress since the last Regular Report
• Overall assessment
• Conclusion

Chapter 6: Competition policy

Progress since the last Regular Report

Since last year's Regular Report, Poland has made further progress in this area.

In the anti-trust field, further alignment with the acquis has taken place. In October 2001 the Regulation of the Council of Ministers on conducting inspections of firms in the course of anti-trust proceedings entered into force, and the Regulation on the detailed conditions to be fulfilled when giving notice of an intention of concentration which entered into force in April 2002. As regards implementing legislation, the necessary block exemption regulations, taking account of the Community's new policies on vertical and horizontal restraints entered into force in August and September 2002.

The Office for Competition and Consumer protection (OCCP), which is the national competition authority in Poland, has continued to build on its enforcement record over the past year. In 2001, a total of 654 decisions were adopted, of which 20 concerned restrictive agreements, 218 abuse of dominant position and 416 were adopted under the modified merger control regime. Since the ceiling for obligatory notification of merger cases was increased, the OCCP has received fewer notifications and has, therefore, had the opportunity to concentrate on merger cases that seriously undermine competition.

In the field of state aid, in July 2002, Poland adopted the new Law on the conditions of admissibility and supervision of state aid for entrepreneurs. The aim of the Law is to define more accurately and extend the statutory definitions of state aid, to strengthen the responsibility of the organs that grant the aid, to introduce the institutions for aid schemes. Furthermore regulations on regional, horizontal and sectoral aid as well as on procedures have been adopted. The state aid report for 2000, adopted by the Council of Ministers in April 2002, follows the methodology and presentation of the European Commission's survey on state aid in the EC.

The Office for Competition and Consumer Protection is also responsible for the control of state aid. In 2001, the Office adopted 50 decisions on aid schemes and 56 on individual aid measures.

In September 2001 a new OCCP President, selected for the first time by competition, was appointed for a 5-year term. Extensive reorganisation of the Office has followed with the objective of shifting the focus of activities towards own initiative investigations and cartel fighting. In particular, new departments, such as the Department of Market Analysis and EU Jurisdiction were created.

In April 2002 the Council of Ministers adopted the report on the status of Competition and Competition Policy for 2002--2003. The analysis and the diagnosis it contains provide a basis for the formulation of the objectives of activities aiming at further development and strengthening of competition. The report also defines the aims of competition policy for 2002--2003.

Poland has proposed a regional aid map for adoption under the Europe Agreement mechanisms.

Overall assessment

The Polish Competition Act entered into force in 2000 and contains the basic principles of Community anti-trust rules as regards restrictive agreements, abuse of dominant position and merger control.

The Office for the Competition and Consumer Protection is an independent authority and has satisfactory resources in place. Currently, the Office employs 220 officials. Of those staff who work in the field of competition policy, 20 officials work in the state aid departments and 65 in the corresponding anti-trust departments.

In the area of anti-trust, the most important challenge for the Office is to continue to ensure the effective application and enforcement of the rules. Efforts to develop a more deterrent sanctions policy should be continued.

Focus of the anti-trust activity has been usefully shifting towards anti-competitive practices that most seriously distort competition, e.g. cartels. This approach should be further developed. With regard to mergers, the amended system is expected to improve the old control system, which resulted in a relatively large number of unnecessary notifications.

It is essential that the Office can continue to actively develop its resources, in particular in view of the planned modernisation and decentralisation of the application of the EC anti-trust rules which, after accession, would bring about new important tasks and responsibilities for national competition authorities.

As regards state aid, the overall assessment is not yet positive. While Poland has incorporated the basic principles of the acquis into Polish state aid control legislation, a more precise transposition of the EU guidelines on restructuring and environmental aid into Polish regulations is still necessary. Work is under way in this respect.

The office has made progress in developing its enforcement record in the state aid field. Nevertheless, there is still room for further improvement. In particular, the existing fiscal aid of the investors in the Special Economic Zones, with permits granted before 2001, still has to be aligned. Furthermore, in areas where the transposition of the acquis has been less satisfactory, for example restructuring aid arising from the cancellation or rescheduling of public liabilities, and environmental aid, the enforcement record has not been adequately developed. On the other hand, the quality of enforcement appears good with respect to regional aid and aid for research and development.

With regard to sensitive sectors, special attention is required. In the steel industry, aid for restructuring can only be given if the national and individual restructuring programmes of the companies would include necessary measures for reaching viability and necessary cuts in production capacity, in line with the requirements set out in Protocol 2 of the Europe Agreement. In the shipbuilding sector, recent measures taken or envisaged by the Polish government in favour of this sector must be granted in accordance with the EC shipbuilding regulation and Polish state aid rules.

Furthermore, in connection with the implementation of the ``anti-crisis programme'' of July 2002 aimed at fighting unemployment and boosting economic growth, it is essential that the EC state aid rules be fully taken into account. In particular, measures to cancel or reduce certain public debts of enterprises, or tax breaks for banks which assist in restructuring, can only be permitted if linked to restructuring programmes leading to the viability of the target companies. In relation to the banking sector, it is important any measures be reviewed under the acquis and Polish state aid rules, including all measures that may have been given in the past and which will continue to have effect after accession.

Conclusion

In its 1997 Opinion, the Commission concluded that, even if efforts were still indispensable, Poland was well positioned as regards alignment with the acquis in the anti-trust area. It also noted the effective functioning of the Office for Competition and Consumer Protection in the area of anti-trust. In the field of state aid, the Opinion noted that considerable efforts would be required to build the necessary legal framework and ensure the functioning of the monitoring authority.

Since the Opinion, Poland has, over the last two years, made progress in adopting anti-trust and state aid legislation and in developing the administrative capacity of the Office for Competition and Consumer Protection. Overall, on legislative alignment, administrative capacities and enforcement record Poland is reasonably advanced, except in the areas of fiscal aid and steel.

Negotiations on this chapter continue.

In order to complete preparations for membership, Poland's efforts now need to focus on ensuring that it continues to update its alignment as the acquis in this area evolves and ensuring a more effective and transparent state aid control, in particular in the sensitive sectors, notably the steel sector. Poland also needs to continue to develop a track record of proper application and enforcement of both anti-trust and state aid legislation.

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