Why did this happen?
Businesses colluded on car prices and divided the market among themselves.
Price collusion means that prices should be set at a certain level. You get price lists and you abide by them, you cannot give lower discounts than those agreed in advance.
At the same time, the market was divided so that buyers could only buy a car from a particular dealer. Dealers could only serve customers from their geographical area. If they were contacted by someone from outside their region, they had to forward the enquiry with their contact details to a competing dealer.
The whole process was monitored and any breaches of the arrangements resulted in reprimands, disciplinary action probably other consequences.
The purpose?
No one in the network of such collusion, as long as it is in place and working, breaks out and prices do not go below a certain level. The members of the collusive network do not go above the agreed level of their own margin.
Why is this not allowed?
Because buyers lose the opportunity to buy at lower prices. Logically, this kind of collusion strikes at the principles of competitive mechanisms and what market competition does well for consumers.
In this case, the President of the Polsih Office of Competition and Consumer Protection (UOKiK) ordered the abandonment of practices and imposed a total fine of more than PLN 405 million on KIA Polska and 11 of its dealers. Penalties were also imposed on five management personnel. Interestingly, the penalties were also imposed on the
partners of a civil partnership, who did not cooperate with the authority during the proceedings by not providing the requested information and documents, which were supposed to show, among other things, the amount of the achieved turnover.
Conclusions?
Not every practice that harms competitive mechanisms can be applied. They exist for a reason and the law comes into play here because it makes market sense and protects consumers.
Importer-dealer pricing has to be well thought out so that it does not hurt on a financial level as in the case described.
Joanna Lubecka
attorney
Is it possible to block in the distribution agreement the possibility to sell certain products on a selected marketplace (e.g. Allegro, Amazon) and allow them to be sold, for example, only through the distributor's official online shop?
Price collusion means that prices should be set at a certain level. You get price lists and you abide by them, you cannot give lower discounts than those agreed in advance.
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Case study. Check what Adam forgot when negotiating a contract with a foreign contractor
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