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PKP Cargo fined for restricting competition on the rail freight market

Polish Office of Competition and Consumer Protection (UOKiK) has issued a 14,2 million PLN (3,3 million EUR) fine to the state-owned rail freight operator PKP Cargo for abusing its dominant position, resulting in limited competition on the rail freight market. 

UOKiK found that in 2006 PKP Cargo introduced regulations allowing it to refuse to sign a special agreement with companies it considered as a competitors. The contract extended attractive discounts to companies that did not compete directly with PKP Cargo, while also preventing competitors from expanding their activity and gaining new customers, thus from competing with the dominant company. The illegal practice went on until 2007. UOKiK has imposed a reduced fine mainly due to the long time elapsed between the initiation of proceedings in 2006 and the conclusion of the case in 2015. The ruling may be appealed in court.

This is the Office’s second decision arising from the 2006 proceedings, which were undertaken following a complaint from a PKP Cargo competitor, CTL Logistics. In 2009 PKP Cargo was fined more than PLN 60 million PLN (13,8 million EUR), which the court of second instance upheld. In October 2013, however, the Supreme Court overturned the judgment, mainly so UOKiK could extend the scope of its investigation, and remanded the case for reconsideration by the Court of Competition and Consumer Protection. The original charge concerned special agreements, but after PKP Cargo changed its trade policy, the charges were widened to consider the company’s refusal to sign commercial contracts and providing discounts to non-competitors. In March 2014 the competition court overturned UOKiK’s 2009 decision, forcing the Authority to continue a case limited in scope to the original complaint.

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