The Office for Competition and Consumer Protection imposed a punishment on Allegro for the usage of monopoly practices. The first allegation concerns the promotion of its own store at the expense of external retailers. The second decision involves placing the clause in the Allegro Regulation, in which the company gave itself the right to unilaterally modify the rules on usage of the portal. The full punishment is PLN 210 million.
Allegro, originally Polish, present owned by 3 British companies - Cinven, Permira and Mid Europe, is 1 of the largest online sales services. Allegro has 2 functions. It enables sale on its own platform to external vendors and runs its own "Official store Allegro". After many user complaints to UOKIK, who felt discriminated against by the service policy, which was to better position its own products at the expense of independent vendors, UOKiK decided to look into the case and launch its own investigation into whether Allegro was utilizing its dominant position.
The case against Allegro has been going on for 3 years, and only 3 days before the end of the year was the verdict of punishing the portal. The company announces an appeal against the decision, but has small chance of avoiding a severe fine.
Punishment for monopoly practices
The UOKiK study states that Allegro was to start favoring its own store as early as 2015, as their products were usually low-positioned in the service search engine. Allegro changed the situation by utilizing information on the operation of the algorithm, resulting in the offer of independent sellers being little visible on the platform compared to their own offer of OSA. Allegro was besides to usage specified mechanisms as: discount coupons, black beam, 3rd dot, advice carousel, anticipation to change descriptions and parameters in the published offer, change the price of the published offer, hint of the phrase searched, cross recommendation, return form, logotype – authoritative store. Regular users were not able to usage these functions.
‘The company favoured its own online store (Official Allegro Store) on the platform operating under the allegro.pl domain at the expense of independent retailers who offered the same or akin products. Consumers who may have had a limited chance to find the best offer for themselves may besides have been affected by this practice. alternatively of taking steps to optimise its sales activity on an equal basis, the company has started a strategy to favour its sales activity, which was possible thanks to the “double role” of Allegro, combining allegro.pl with retail activities on this platform,” explains president Tomasz Chróstny.
Regulations of Allegro illegal
The second punishment concerns Allegro's placing a clause in the Rules of Procedure, in which it reserves the right to change the terms of usage of the portal at any time. The Office for Competition and Consumer Protection found this practice illegal due to the fact that the service does not specify the scope or relevance of updating the rules.
‘For years, we have been calling for the rules to be formulated unequivocally and in a understandable way to regulate the obligations of the parties to the agreement. Consumers who pay in advance a multi-month contract have the right to believe that the circumstantial conditions they agree to will stay unchanged. The right of the trader to unilaterally change can lead to abuse of his position by imposing on consumers the consequences of these changes. Especially erstwhile consumers cannot be entirely certain that they will recover the money for the paid services purchased," says Tomasz Chróstny.
Allegro announces appeal
Allegro denies that she has applied monopoly practices and stresses that the decision is not final and has the chance to appeal it.
‘Allegro PL will examine the reasons for the decision and take steps to repeal it. Allegro.eu indicates that the decision at this point is not final and that the punishment is not due. Allegro PL has the chance to appeal it to the Court of Competition and Consumer Protection within 1 period of delivery. The decision will be final only if the appeal is not brought, or after the final result of the court proceedings has been completed," Allegro replied.
Nationals.net/ukik.gov.pl
