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General Information about Competition Law

The Competition and Consumer Protection Law of February 16, 2007 prohibits agreements aimed at, or resulting in, eliminating, restricting or otherwise impairing competition in the relevant market. Such agreements are null and void in whole or in their relevant part. Under a discretionary power accorded to it in the Law, on March 30, 2011 the Council of Ministers issued a regulation on excluding specified vertical agreements from the prohibition on competition-restricting agreements. Excluded from the prohibition are, among others, vertical agreements creating franchising distribution systems if the share of the distributor and the capital group to which it belongs in the relevant market for the sale of goods covered by the agreement concerned does not exceed 30%. It should be noted that the regulation does not refer to franchising systems; instead, it makes use of the term “franchising distribution” which is defined as a distribution system in which the distributor (franchisee) undertakes, directly or indirectly, to resell the goods covered by the agreement from the distributor (franchisor), using the latter’s set of intellectual or industrial property rights or know-how in exchange for direct or indirect remuneration.

The above provision seems to indicate that only product distribution franchising systems are excluded under the Regulation and that the Regulation does not apply to business format franchising systems, which would undoubtedly complicate their situation under competition protection provisions. In this author’s opinion this is probably an oversight, rather than an intended act, on the part of the drafters of the Regulation, which stems from their incomplete knowledge about franchising. This obvious inconsistency should be remedied as soon as possible, although on the other hand it should be noted that, during the effective term of the exclusion, it produced no negative consequences for any of the business format franchising systems operating in Poland. It seems certain that this situation will not change until the end of the exclusion’s effective term, i.e., until May 31, 2023.

The exclusion does not apply to vertical agreements which contain “hardcore” restrictions, such as those restricting the purchaser’s right to establish a sale price by the supplier imposing minimum or fixed sale prices for the goods covered by the agreement, restricting the area or group of customers to whom the purchaser may sell the goods covered by the agreement etc.