Changes to the Act on Superior Bargaining Power

An amendment to the Act on Combating the Unfair Use of Superior Bargaining Power in the Trade in Agricultural and Food Sector was published today and will enter into force on December 11, 2018 (the ‘Amendment’). The Amendment aims at addressing practical problems that have arisen over the first 12 months of applying the act. To this end, the Amendment broadens the scope of the act, introduces changes to the definition of superior bargaining power and extends the range of entities that can report their suspicions of misuse of superior bargaining power to the President of the Polish Competition Authority.

The Amendment eliminates trade volume and turnover thresholds from the list of criteria for applying the act to contracts between suppliers and buyers of agricultural and food products. This means that more companies will fall within the scope of the act. Currently, the act is applicable only if the trade volume between supplier and buyer of agricultural/food products meets the threshold of PLN 50,000 and the turnover of the party misusing the superior bargaining power exceeds PLN 100 million.

The Amendment also refines the definition of superior bargaining power. The Amendment states that superior bargaining power exists whenever there is a significant disproportion between the economic potential of the trading partners. This new definition of superior bargaining power means that it will no longer be required to verify whether the supplier or the buyer has other, sufficient and real opportunities to sell or purchase agricultural or food products.

The Amendment enables everyone to report suspected cases of unfair use of superior bargaining power to the President of the Polish Competition Authority and guarantees anonymity to any such person or entity. To date, cases could only be reported by a company subject to the alleged misuse of superior bargaining power.

The enactment of the Amendment confirms that combating superior bargaining power is a priority for the Polish Competition Authority. The real life impact of the Amendment remains to be seen. As there is still a lack of decisional practice (apart from one decision) from which companies could source interpretations of blurry concepts and definitions used in the act, it is debatable whether the Amendment will bring about significant improvements to legal certainty in the agricultural and food products sector.