Biznes Fakty
Cement Cartel Returns? Searches at Six Companies
A lack of competition and rising cement costs could adversely impact the execution of key projects that are crucial for Poland’s development. This necessitates clarification, states Tomasz Chróstny, head of the Office of Competition and Consumer Protection. On Monday, the office announced the commencement of an inquiry into the operations of six cement facilities and, with police assistance, conducted searches at their locations. – The Office of Competition and Consumer Protection has received indications that businesses may have reinstated the illicit agreement – it was mentioned in a release.
The Office of Competition and Consumer Protection (UOKiK) uncovered a conspiracy among cement manufacturers back in 2009. Seven firms, which held nearly 100 percent of market share, were found to be dividing the market and manipulating prices for over 11 years, exchanging sensitive information for this purpose.
„More than a decade after the disbandment of the cement cartel, the Office of Competition and Consumer Protection (UOKiK) has received alerts suggesting that entrepreneurs might have recreated an illicit agreement. Consequently, the President of UOKiK has initiated an inquiry, and UOKiK officials, with judicial approval and police support, searched the premises of six entities,” the Office stated.
Searches conducted at six entities
The Office of Competition and Consumer Protection indicated that it had conducted searches at the offices of six entities: Holcim Polska (formerly Lafarge), Cemex Polska, Dyckerhoff Polska, Cement Ożarów, Górażdże Cement, and Górażdże Beton. According to the Office, the suspected agreement may once again involve price-fixing and market division, such as assigning exclusive customers, leading to a lack of competition for buyers. As part of the cartel, cement manufacturers could have communicated about implemented price increases, preventing customers from receiving favorable offers.
– The revival of the cartel would be particularly scandalous, as cement is a fundamental construction material essential for the growth of housing, road infrastructure, and the entire economy – remarked Tomasz Chróstny, President of the Office of Competition and Consumer Protection, as quoted in the press release.
He further noted, „the absence of competition and elevated cement prices could detrimentally influence the execution of strategic projects, which are vital for Poland’s growth” – This necessitates clarification; we intend to thoroughly investigate this issue and are currently scrutinizing the evidence collected – he emphasized.
Companies’ objections
The Office of Competition and Consumer Protection reported that the firms subjected to searches contested the actions, stating that correspondence and documents generated by members of their management boards, who concurrently practice as legal advisors, should be protected under the provisions of the Act on Competition and Consumer Protection, specifically the „defense secrets” protection.
The President of the Office of Competition and Consumer Protection (UOKiK) challenged these assertions, indicating that, due to their roles on the management board, such individuals are not independent from the entrepreneur, even if they also serve as legal counsel. The court of first instance dismissed the companies’ complaints as unfounded, but these rulings are not conclusive.
Proceedings „in the matter”
In its statement, the UOKiK emphasized that the inquiry is being conducted „in the matter,” rather than against specific entrepreneurs. Only upon confirming the suspicions will the President of the UOKiK initiate antitrust proceedings and bring charges against particular entities. Companies involved in an agreement that restricts competition may face fines up to 10% of their turnover. Meanwhile, managers implicated in collusion may incur fines of up to PLN 2 million.
Through the leniency program, entrepreneurs involved in an illicit agreement and managers responsible for the collusion have the opportunity to reduce or occasionally evade fines, as reported by the Office of Competition and Consumer Protection (UOKiK).
This can be availed provided that one cooperates as a „crown witness” with the President of the Office of Competition and Consumer Protection and provides evidence or information regarding the existence of an unlawful agreement. The Office of Competition and Consumer Protection also operates a program for gathering information from anonymous whistleblowers.
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