Proceedings before the President of the Office of Competition and Consumer Protection on unfair market practices – what is worth knowing?

The issue of unfair commercial practices is governed by the Act of 23 August 2007 on combating unfair commercial practices. Unfair practices are defined as being contrary to good practice and significantly distorting the market behaviour of the average consumer before, during or after the conclusion of a contract relating to a product.

Several types of unfair market practices are listed:

• Misleading marketing practice,
• Aggressive marketing practice,
• The use of an unlawful code of good practice,
• Operating a business in the form of a consortium scheme or organising a group involving consumers for the purpose of financing a purchase under a consortium scheme.

Misleading

A misleading act is any conduct that induces a consumer to take a decision that they would not otherwise have taken. The consumer makes a decision on the basis of incorrect premises.

These include, in particular:

• The dissemination of false information,
• Disseminating true information in a manner likely to mislead,
• Conduct relating to the packaging, trademark or trade name of the product.

Misleading conduct may relate to the existence of the product, its availability, the product’s characteristics, its origin, manufacture, composition, or tests or checks carried out on the product. This also applies to consumer rights, prices and the method of calculating them. A market practice may also constitute misleading conduct where a manufacturer omits material information that the consumer needs to make a decision. This may involve concealing or failing to provide material information about the product. An example of such a practice might be advertising products that are claimed to have exceptional health benefits, whilst these products have not undergone any tests confirming their advertised properties.

Article 7 of the Act lists market practices that are always misleading; these include, amongst others:

• A trader stating that they will comply with a code of good practice, if this is untrue,
• Using a certificate or quality mark without being authorised to do so,
• Various types of bait advertising, including those which offer to sell a product at a specific price when in reality the purchase of that product is impossible or restricted,
• Claiming that a product will only be available for a limited time in order to pressure the customer into making a quicker decision,
• Claiming or giving the impression that the sale of a product is lawful when this is not the case,
• Bait advertising which consists of offering to sell a product at a specified price without disclosing that the trader may have reasonable grounds to believe that they will not be able to supply or order from another trader the supply of those or equivalent products at that price, for that period and in those quantities which are reasonable, taking into account the product, the scope of the product’s advertising and the price offered,

Aggressive practice

This constitutes undue pressure that significantly restricts the average consumer’s freedom of choice. It causes the consumer to make a decision that they would not have made under normal circumstances. Undue pressure is considered to be any form of exploitation of an advantage over the consumer, in particular the use or threat of physical or psychological coercion.

Article 9 of the Act lists unfair practices which will be aggressive in all circumstances; these include:

• Giving the impression that the consumer cannot leave the trader’s premises without concluding a contract,
• Visiting the consumer’s home whilst ignoring the consumer’s request to leave,
• Persistent and unsolicited attempts, not prompted by any action or omission on the part of the consumer, to persuade them to purchase products by telephone or email,
• Encouraging children through advertising to purchase the advertised products or to persuade their parents to buy them,
• Stating that if the consumer does not purchase the products, the trader may face the loss of their job or livelihood.

A consumer whose interests have been infringed or threatened may demand:

• That the practice be discontinued,
• Removal of the effects of this practice,
• A single or repeated statement by the trader to that effect, in an appropriate form,
• A price reduction,
• A request for the contract to be declared void, for the return of benefits, and for the reimbursement of costs.

Proceedings before the President of the Office of Competition and Consumer Protection

The President of the Office of Competition and Consumer Protection (UOKiK) may initiate proceedings in cases concerning unfair market practices on the basis of a consumer complaint or ex officio, where there are reasonable grounds for suspicion. The proceedings begin with an investigation phase during which a preliminary assessment is made as to whether the actions in question actually breach the law. The Office analyses documents, carries out inspections and interviews witnesses. Where the evidence gathered confirms the validity of concerns regarding unfair practices, the President of UOKiK proceeds to administrative proceedings. The business is informed of the allegations and of its right to defend itself; it may actively participate in the proceedings. The authority assesses whether the practices breach the law and to what extent. Both these proceedings should last approximately five months from the date they are initiated. The proceedings conclude with an administrative decision or a settlement. The President may find that unfair practices have been used and order their cessation; they may impose a financial penalty and require the trader to issue a public apology or reimburse customers. The trader may also be ordered to publish the decision in such a way that the trader’s customers have access to it.  A settlement will involve the trader undertaking to cease the prohibited activities and to pay compensation to the affected consumers.

Once the decision has been made, the penalised trader has the right to appeal to the Court of Competition and Consumer Protection, which may overturn or amend the decision.