Is slotting fee legal?

The slotting fee stirs controversy in trade relations. Many times it is presented as part of a promotional policy, but in reality it can be a form of contractual exploitation and violate the principles of fair competition. What is the difference between an acceptable fee and an unlawful demand? We discuss it below.

What Are Slotting Fees and Why Are They Controversial?

The term “slotting fee” does not function directly in the law but has been accepted in market practice. It refers to additional charges that large retail chains demand from suppliers in exchange for allowing their products to be sold. In return, they offer, for example, a better shelf placement, inclusion in promotional flyers or marketing in the retailer’s media. The problem arises when:

• the retailer’s performance is not equivalent to the fee incurred,
• the fee is a mandatory condition for collaboration,
• the supplier has no real possibility of negotiation.

As a result, slotting fees are becoming an instrument for abusing contractual advantage. This undermines fair business practices and harms the competitiveness of smaller companies.

Slotting Fees And Unfair Competition – Legal Framework

The crucial provision is Art. 15(1)(4) of the Polish Unfair Competition Act (16 April 1993). It states that charging fees other than a commercial trade margin for accepting goods for sale is an act of unfair competition if those fees are not based on real mutual benefits. It prevents retailers from demanding extra payments to sign a sales contract.

What is important, the contract’s form is irrelevant. Even if a supplier agrees and signs documents, a court may still rule that the practice is illegal. The focus is on the actual content of the contractual obligation and the value of the service.

When Are Slotting Fees Allowed And When Not?

Not every additional fee is an act of unfair competition. The line is crossed when the retailer’s service is non-existent, disproportionate, or only nominal. This is illustrated in the table below:

Court Rulings and Legal Practice – In Favour of Suppliers

Courts agree that suppliers can seek reimbursement even if slotting fees were paid voluntarily. For example:

• Court of Appeals in Warsaw (23 June 2015, VI ACa 1129/14):
  The promise of “possibility of cooperation” is not a valid equivalent for a fee.
• Court of Appeals in Katowice (14 May 2013, V ACa 103/13):
  Lack of real marketing services renders the fee unlawful.

How to Defend Against Slotting Fees?

Suppliers who have incurred slotting fees have several legal tools at their disposal. In particular:

1. Civil lawsuit for payment – a claim for the return of undue performance under Art. 410 § 2 of the Civil Code,
2. Claim to cease unfair competition practices – under Art. 18 of the Unfair Competition Act of 16 April 1993
3. Report to the Office of Competition and Consumer Protection (UOKiK in Poland). The authority may initiate proceedings against a business abusing its market position
4. Class action lawsuit – especially if many suppliers have suffered from the same practice.

Slotting Fees And Contractual Power Imbalance – A Systemic Issue

The phenomenon of slotting fees cannot be analysed only in the context of individual relations. In fact, it is a systemic manifestation of market inequality. Large retail chains take advantage of their dominant position. They often impose contract standards that deprive suppliers of the possibility of real negotiations. Such a practice threatens not only specific companies but also the competitiveness of the entire market.

Slotting Fee – Summary

Slotting fees, although common in commercial practice, very often violate the law. Their legality depends solely on whether the retailer actually provides a service corresponding to the value of the fee. Otherwise, we are dealing with an act of unfair competition. This opens the way to the effective pursuit of claims.

Do you need legal support? Are you a supplier forced to pay slotting fees? Maybe you want to review a contract with a retailer before signing it? Contact a law firm specialising in competition law. Our experts can help you evaluate your situation and recover your funds.

FAQ – Frequently Asked Questions and Answers About Slotting Fee