On 15 December 2016 the Sejm (the lower chamber of the polish Parliament) passed an Act on the prevention of unfair use of contract advantage in trading of agricultural and food products which will enter into force on 12 July 2017.
The Act in order to protect the public interest sets out the rules counteracting practices that consist in the unfair use of contract advantage by buyers of agricultural or food products or suppliers of those products if such use has or may have effects in the Polish territory.
Passing the Act is a response of the legislator mainly to the worsening problem of imbalance among the participants in the food supply chain that is characterised by the presence of economically strong and consolidated entities of the distribution sector and weaker, fragmented entities producing agricultural commodities and food products.
The Act introduces to the Polish legal system a new concept, the so-called contract advantage. The contract advantage, in the supplier and buyer of agricultural and food products relation, within the meaning of the Act is determined by the following criteria:
– the existence of sufficient and factual possibilities of sale of the abovementioned products to other entities or their purchase from other entities, and
– the existence of disparity in the economic potential of a supplier and buyer.
Therefore, in contrast to the dominant position being determined in relation to all traders in the relevant market on the basis of antitrust law, the contract advantage concerns the relationship between the two entities.
The Act combined elements characteristic for the law on combating unfair competition and antitrust law.
On the hand, it is prohibited to use unfair contract advantage i.e. such which is contrary to decency and threatens or violates material interest of the other party (premises such as ones in the act on combating unfair competition).
On the other hand, according to the new regulations, the competent authority in matters of practices involving the use of unfair contract advantage is the President of the Office of Competition and Consumer Protection (OCCP).The Act, inter alia, grants the power to the President of the OCCP to impose fines in case of violation of prohibition of unfair use of contract advantage.
The text of the Act published in the Journal of Laws is available here.