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Office of Competition and Consumer Protection

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Dahua Technology Poland - suspicion of collusion with distributors and a fine for hindering the search

< previous | next > 28.11.2022

Dahua Technology Poland - suspicion of collusion with distributors and a fine for hindering the search
  • Did Dahua Technology Poland, one of the country’s largest manufacturers of electronic monitoring equipment, enter into price collusion and divide the market together with its distributors?
  • The President of UOKiK brought charges against six entrepreneurs and seven managers.
  • Furthermore, Dahua Technology Poland hindered the search during the preliminary investigation and was penalised a fine of PLN 700 thousand for doing so.

Dahua Technology Poland is the exclusive importer and wholesale distributor of the Dahua brand – a world-renowned manufacturer of electronic monitoring equipment (including but not limited to IP and HDCVI cameras, recorders, video intercoms, and gate and porter stations). The company sells these products to its distributors, who deal with further wholesale or retail resale in on-site stores and on the Internet. According to the information obtained by UOKiK, for instance during the searches conducted at the premises of four entities, it appears that Dahua Technology Poland may have concluded a competition-restricting agreement with the distributors of its products: Alpol, Alkam Security, E-commerce Partners, Delta – Opti, and Techglobal.

“The suspected collusion may have deprived individuals, companies, or institutions of the possibility to purchase equipment for electronic monitoring cheaper than at top-down rates. Therefore, I initiated proceedings against six entrepreneurs and seven managers who could be directly responsible for the prohibited arrangements. Collusion is punishable by a fine of up to 10% of the entrepreneur’s turnover, and a financial sanction of up to PLN 2 million may be imposed on natural persons”, says President of UOKiK, Tomasz Chróstny.

Price Collusion

From the evidence held by the Office it follows that from the beginning of its activity, namely 2016, Dahua Technology Poland might have been influencing the pricing policy of distributors by obliging them to apply certain prices. In addition, the company imposed the maximum level of discounts and promotion conditions that its business partners could apply. As far as own promotions are concerned, distributors had to obtain approval from the importer. Moreover, price fixing may also have taken place downstream in the distribution system. The President of UOKiK suspects that Dahua Technology Poland asked distributors that their business partners apply fixed resale prices for Dahua products. Further, the entrepreneur could monitor compliance with the conditions of sale imposed by them. The distributors themselves asked the company to intervene if any of them failed to adhere to the agreed-upon prices. They could also contact each other directly to discipline each other.

Market Division

The second charge pressed by the President of UOKiK involves the division of the market. There is a suspicion that in the case of the sale of Dahua products whose sales value exceeded the price thresholds set by Dahua Technology Poland, the company could grant a selected distributor a higher discount on the purchase of Dahua products as well as the so-called design protection. At that time, another distributor could not offer the same customer a competing offer for the same transaction.

Hindering the Search

Moreover, the President of UOKiK issued a decision imposing a fine on Dahua Technology Poland for hindering the search that took place at this entrepreneur when the preliminary investigation was in progress. At the initial stage of the search (involving, among others, the delivery of documents authorising the conduct of the search, explaining its purpose and scope, and selecting the resources of the searched entity, e.g. telephones and computers to be secured) the employees of the Office had asked several times the present company representatives not to inform their colleagues about the commencement of the search. Despite this, one of the managers warned them about the commencement of the search by sending messages on the messenger on the phone.

The action taken by the manager of Dahua Technology Poland eliminated the surprise effect, which is crucial in the search to obtain relevant materials on prohibited agreements between entrepreneurs. This could lead to the obliteration of important evidence, and accordingly, I decided to impose a fine of PLN 700 thousand on the company”, says Tomasz Chróstny, President of UOKiK.

Please be reminded that the President of UOKiK may conduct searches at the premises of entrepreneurs where there may be evidence of infringement of competition law. These measures are taken with the consent of the court, and entrepreneurs are not informed about them in advance. The condition for the proper and effective conduct of the search rests with the element of surprise, which allows for minimising the risk of potential destruction or concealment of evidence by the employees of the entrepreneur subjected to the search. Therefore, it is of crucial importance that the information about its commencement is not disseminated in the initial phase of the search.

The issued decision is not final and biding and may be appealed against to the court.

We would like to remind you that the Office runs a programme of acquiring information from anonymous whistle-blowers. Visit https://konkurencja.uokik.gov.pl/sygnalista/ and fill out a simple form. The pan-European system we rely on guarantees full anonymity, also towards the Authority’s staff.

Additional information for the media:

UOKiK Press Office
pl. Powstańców Warszawy 1, 00-950 Warszawa, Poland
Phone: 22 55 60 246
Email: [SCODE]Yml1cm9wcmFzb3dlQHVva2lrLmdvdi5wbA==[ECODE]
Twitter: @UOKiKgovPL
You can also follow us on Instagram: @uokikgovpl

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