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Czech Republic
bpv Braun Haškovcová
Regulatory framework
The existence of post-communist competition law in the Czech Republic
dates from 1 March 1991, when the Act on the Protection of Competition
No. 63/1991 Coll became effective. This Act had its origin in the competition
law of the European Communities and also took some principles from other
national Competition laws, in particular from the German one. This Act
included three basic provisions: the prohibition of cartels; the prohibition
of the abuse of a dominant position; and the duty to notify mergers
and have them cleared.
In order to reach full compatibility with European legislation, especially
in terms of merger control (the Czech Republic was bound by articles
69 and 70 of the European Agreement establishing an association between
the European Communities and the Czech Republic to gradually harmonise
its regulations with EC law) 10 years after the adoption of the first
Act a new Act on the Protection of Competition No. 143/2001 Coll (the
Competition Act), effective as of 1 July 2001 was enacted. On the same
day, eight decrees of the Antitrust Office for the Protection of Competition
granting general (block) exemptions from the prohibition of agreements
distorting competition also became effective for specific type of (vertical)
agreements. With a few exceptions, Act No. 143/2001 Coll already conformed
to EC competition law at the time it was adopted. Therefore, it is still
the main source of Czech competition law.
With regard to the new EC Regulation 1/2003 on the implementation of
the rules laid down in articles 81 and 82 of the Treaty establishing
the European Community (the Treaty) and its decentralisation approach,
an important amendment was enacted, No. 340/2004 Coll, effective as
of 2 June 2004. The Act first of all repealed, in accordance with the
change of the notification system to the legal exemption system on the
European level, sections 8 and 9 of the Competition Act, which provided
for the legal possibility for the undertakings to let the Competition
Authority assess their proposed agreement and whether or not this might
be considered an illegal and void cartel agreement. The Act further
modified the process of the adoption of block exemptions and authorised
the Competition Authority to adopt other block exemptions.
Furthermore, following the Czech Republic’s accession to the EU
on 1 May 2004, EC competition law must also be considered and is applicable
in cases with a community dimension. In this respect, EC Regulation
No. 139/2004 on the control of concentration between undertakings (the
EC Merger Regulation) applies, together with its system of referrals
to the authorities of the member states.
Another amendment to the Act, relating to the EC Merger Regulation,
was enacted in 2005 (Act No. 361/2005 Coll). It replaced the dominance
test with the SIEC test (significant impediment to effective competition),
a reaction to possible gaps in the application of the competition rules
in the control of concentration that arose with the Airtours case, inserted
new provisions on cooperation between the Czech Antitrust Office and
the European Commission in merger cases (case referrals) and amended
a provision on ancillary restraints. The amendment further repealed
the regulations on block exemptions and inserted a receptive clause,
on the basis of which application of community block exemption regulations
are possible, even to competitive actions not affecting trade between
member states. Thus, the Czech Antitrust Office no longer issues regulations
on block exemptions, through which particular European regulations would
be implemented, but applies the respective regulations directly to competitive
actions without a community element. This ensures a conform application
of the same block exemptions both on the European and national level.
Cartels
The Competition Act contains a general prohibition on agreements between
undertakings, which have as their object or effect the prevention, restriction
or distortion of competition. In fact, section 3 paragraph 1 is almost
identical to part of article 81 of the EC Treaty. Therefore, the abundant
case law of the CFI and ECJ may be used for the solution of legal problems
arising under the Czech competition law. This prohibition refers to
agreements relating to products and services. It applies regardless
of the stage in the production and distribution chain where competition
is restrained or whether the parties’ relationship is of a vertical
or a horizontal nature (with a special provision relating to agriculture,
see above). Prohibited anti-competitive agreements include:
• direct or indirect price fixing (including resale price maintenance);
• direct or indirect fixing of other terms and conditions;
• restrictions or control of production, sale, purchase, research,
development or investment;
• market sharing or sharing of sources of supply;
• tying clauses; and
• group boycotts.
Prohibited anti-competitive agreements do not include:
• agreements that contribute to an improvement in the production
or distribution of goods, technical support or economic development
and allot an adequate part of the advantages resulting from it to consumers
or agreements, and that do not impose restrictions on competitors that
are not necessary for achieving the goals mentioned in this provision;
or
• product supply or purchase agreements that prevent competitors
from eliminating competition in an essential part of a product market.
The prohibition also applies to ‘concerted practices’ and
decisions by associations of undertakings that result or might result
in the distortion of competition. The Act introduced a de minimis rule.
Vertical agreements do not fall under the prohibition if the market
share of each of the participants of the agreement does not exceed 15
per cent. In the case of a horizontal or a mixed horizontal and vertical
agreement, or where it is difficult to classify the agreement as either
horizontal or vertical, a 10 per cent market share threshold applies.
This de minimis rule does not apply to ‘hard-core’ restrictions,
such as agreements, that have as their object, direct or indirect price
fixing, or market sharing. Several agreements are exempt if they comply
with the conditions laid down by the block exemption regulation issued
by the Council of the European Union or by the European Commission.
Czech law does not follow the practice of the European Commission, which
adopts the de minimis thresholds in the form of soft law, usually called
guidelines, and therefore eventual changes do not need to be implemented
via an amendment of EC Regulation 1/2003. Hence, any changes of the
de minimis thresholds must be implemented by adopting a law.
According to a new provision of section 4 of the Competition Act, these
Regulations also apply to cartel agreements that do not have a community
dimension. The Competition Act further authorises the Antitrust Office
to exempt, under the block exemption regulations, a group of similar
restrictive agreements whose distortion of competition is outweighed
by advantages for other participants on the market, especially consumers.
This authorisation is meant to regulate some specific types of agreements
typical for the local Czech markets. So far, the Antitrust Office does
not plan any new block exemption regulation and continues to rely on
those adopted on the European level. The old block exemption regulations
issued by the Antitrust Office under the old regime were repealed by
amendment as from 2005. The Antitrust Office may also withdraw the exception
in individual cases if, as a result of market development, the exemption
subject to a block exemption does not fulfil requirements laid down
in section 3 paragraph 4 of the Competition Act (contribution to an
improvement in production of goods or distribution, no restrictions
for customers and no possibility of exclusion of competition for the
competitors).
Notification and clearance
As at the European level, agreements can no longer be referred to the
Antitrust Office for clearance as to whether they are in accordance
with the law. The respective sections (8 and 9) of the Competition Act
were repealed. The system of individual exceptions has been abolished
as well.
Commitments and leniency
An obligation system has been introduced that is identical to the rules
of the European Commission. It should enable competitors to offer to
meet certain obligations that, provided they are met and provided that
the restrictive agreement has not been fulfilled and the distortion
of competition has yet to occur, will avoid intervention by the Antitrust
Office. If the commitments are not carried out, a fine can be imposed.
Any person or undertaking with a legal or economic interest can inform
the Antitrust Office of restrictive agreements and practices. A leniency
programme for parties to a cartel agreement was introduced in 2001,
with the first reported case occurring in May 2004 and substantial changes
in June 2007. As demonstrated in the gas insulated switchgear cartel,
even if an international cartel is already sanctioned on the European
level, it is possible to apply under the leniency programme for the
time before EU accession and receive full indemnity from Czech prosecution.
The leniency programme as of June 2007 shall apply only to hard-core
horizontal agreements and contains far more detailed conditions for
its application. There are two basic types of leniency. Type I can lead
to full indemnity from fines if the undertaking involved in a cartel
agreement offers to the Competition Authority evidence that enables
the Authority to uncover a cartel. Type II can lead to a significant
reduction of in fines if the undertaking offers to the Authority information
with a significant value for the investigated cartel. This programme,
however, has so far had little significance in practice, similar to
that at the European level, where only a few cases have been recorded
so far. The reasons might be the uncertainty of the results of such
an application for the leniency programme as well as quite long waits
for the decision.
Usually, the Antitrust Office will launch official proceedings upon
receiving such information. It may, of course, start proceedings based
on information obtained through its own activities. The right to investigate
premises other than business premises (see ‘Enforcement’
below) has been granted to the Antitrust Office, particularly with respect
to the need for gathering information and evidence about restrictive
agreements. A third party may claim damages from the parties to a restrictive
agreement at a civil court. During such proceedings, the Antitrust Office
may be asked to deliver a statement concerning the lawfulness of any
contracts or provisions.
The Czech Antitrust Office has a strong tendency to solve cases amicably
by accepting commitments, even in cases of hard-core cartel behaviour.
In particular when strategic companies are involved, it uses ‘competition
advocacy’, in which the informal offering of commitments and bargaining
with the undertakings goes far beyond the formal procedure rules as
stated in the Competition Act. The Czech Antitrust Office seems to be
more open to informal bargaining with undertakings.
Abuse of a dominant position
A dominant position is defined as a position in a relevant market that
enables an undertaking or an association of undertakings to prevent
effective competition by giving it the power to behave, to an appreciable
extent, independently of its competitors. A dominant position is presumed
if the undertaking reaches or exceeds a market share of 40 per cent
of the relevant market. The analysis of the relevant market is based
on the judgment of the Antitrust Office. Generally, the Antitrust Office
will refer to decisions of the European Commission or western competition
authorities in order to define a relevant market. There is a tendency
to extend the relevant geographic market beyond the borders of the Czech
Republic.
A dominant position is not prohibited per se by the Czech Competition
Act. The undertaking has no obligation to inform the Office of such
a position. Only conduct that may be classified as exploitative, exclusionary,
predatory or structurally abusive infringes the Competition Act and
is therefore prohibited. All agreements fulfilling this classification
are null and void. The Act implements the ‘essential facilities’
doctrine, which has recently been applied mainly to intellectual property
cases.
In evaluating whether a dominant position exists, the Antitrust Office
examines whether there are legal or other barriers to enter the market,
the market structure and the size of the market shares of the undertakings’
immediate competitors. Article 11 of the Competition Act contains examples
of abusive conduct, such as the enforcement of unfair conditions in
certain infrastructure networks. There are no explicit exemptions. It
is up to the Antitrust Office to decide whether certain behaviour constitutes
the abuse of a dominant position. However, there may be conflicts with
the regulatory authorities, such as the Czech Telecommunication Office
or Energy Regulation Authority, who have partly overlapping competence.
Unclear scope of competence of the state regulatory bodies may make
the defence of the undertakings against monopoly undertakings on the
markets to be liberalised (electricity, gas, postal services, railroad
services, etc) more difficult. In addition, the financial authorities
in recent years exercised price control in various cases and levelled
high penalties in cases where the Antitrust Office refused to act.
The ability to notify for clearance has been abolished and, as in the
case of cartels, an obligation system has been introduced. In recent
years, the Antitrust Office has increasingly focused on such abuse.
As with other agreements, the Antitrust Office will initiate proceedings
by requiring competitors, clients, suppliers and public administrators
to provide the necessary information. Some spectacular fines have been
imposed in 2007; based on the Act on Prices 526/1990 Coll, where tax
offices levelled high penalties against companies in the coal and steel
sector for abuse of market position leading to unjustified profit.
Mergers
The merger rules set out in the Competition Act are supplemented by
regulations issued by the Antitrust Office. Any merger transacted as
described below may not be implemented unless cleared by the Antitrust
Office.
There are several forms of concentrations under the Competition Act:
• two or more formerly independent undertakings merge into one
entity;
• acquisition of enterprise of another undertaking; and
• one or more undertakings take direct or indirect control of
the whole or part of another undertaking
Merger control rules do not apply to situations where a bank or other
financial institution acquires shares for a maximum of one year, for
the purpose of financially restructuring a company. Further exemptions
are set out for stockbrokers.
Notification
Merger notification is mandatory if either of the following thresholds
are met:
• the net turnover of the undertaking being acquired or being
taken control of in the Czech Republic is at least 1.5 billion koruna
(approximately e61.5 million) and the net worldwide turnover of another
merging competitor is at least 1.5 billion koruna; or
• the combined net turnover in the Czech Republic of all parties
is 1.5 billion koruna and at least two of the parties have a net turnover
that exceeded 250 million koruna (approximately e10.2 million) in the
previous year.
By way of simplification, the net turnover in the territory of the
Czech Republic may be used, as a rough guide, as the principal criterion
for determining the maximum permissible level; if it is below 1.5 billion
koruna then the merger will not require notification.
Transactions not reaching the turnover thresholds are not subject to
the approval of the Antitrust Office. Since the Czech Republic’s
accession to the EU, EU merger control must also be taken into account.
Whereas in former years merger control was the dominant part of Czech
antitrust practice and widespread filing obligations existed, the significance
of national merger control has decreased considerably since 1 May 2004,
when the Czech Republic acceded to the European Union, and changes were
made to the European merger control regime. The number of merger control
cases has decreased from 239 in 2003 to 55 in 2005 and 61 in 2006. Cases
decided by the European Commission instead of the Czech Antitrust Office
explain only a small part of this decrease. Much more important are
the changed national thresholds.
Merger proceedings
No transaction for which notification is mandatory can be put into
effect until it is cleared by the Antitrust Office. Transactions carried
out in breach of the duty to notify are not null and void, but the Antitrust
Office can order various measures to restore competition (including
a demerger order). In order to facilitate completion of the notification
form and supporting information, pre-notification contacts between the
notifying parties and the Antitrust Office are recommended. The present
policy of the Antitrust Office’s merger section, however, only
allows for a limited degree of informal guidance and informal contacts.
The amendment to the Competition Act from 2004 also formally enabled
a pre-notification; guidelines were published in January 2008.
The notification must be complete in order to be effective (a ‘blanket
notification’ is not deemed to be a notification). If the notification
is incomplete, proceedings will not be initiated and the Antitrust Office
will inform the notifying parties whether the merger is subject to its
approval and whether it is necessary to amend the notification. In such
cases, a notification becomes effective when the Antitrust Office receives
the complete information. It is highly recommended to ask the respective
official after the notification has been filed whether it is complete
or what further information shall be submitted. By means of informal
telephone contact, the notification could be completed very fast, which
can speed up the issue of the clearance decision. A fee of 100,000 koruna
(approximately e4,097) must be paid with the filing.
During the proceeding, the Office may ask the parties to supply supplementary
information or evidence. The decision period does not commence until
such information or evidence is supplied. The Antitrust Office can also
revoke a decision based on incorrect information. As a vast number of
documents have to be submitted, the filing should be prepared in advance
of the execution of the agreement. The notification must be drafted
in Czech and all financial information must be in Czech koruna. Supporting
documents should be submitted in the original version (a declaration
of truthfulness and completeness may help if the original versions are
not submitted) and with a Czech translation (which does not have to
be official in all cases; in case of commonly used languages, such as
English, German or French, the Office usually requires no translation;
sometimes it requires only translation of a significant part of an agreement).
Until a decision is reached, no control of the acquired enterprise may
be exercised and, in particular, no voting rights may be exercised.
A merger may only be entered on the Commercial Register once the Antitrust
Office has granted its approval. This is particularly relevant for limited
liability companies, which must register a change in their shareholders
or in case of a merger of two or more entities into one. The Antitrust
Office must make a first-phase decision on the transaction within one
month of the date of notification; otherwise the transaction is deemed
to have been approved.
The Antitrust Office considers both the notification itself and any
publicly available information, including information that is available
on the internet. It may also require information from other public authorities
or contact interested third parties such as customers, suppliers and
competitors. There are penalties for supplying false or misleading information
to the Antitrust Office. Notification of a merger will be published
in the Commercial Gazette calling upon any interested parties to respond
within a certain time (usually less than one week).
Informal guidance from the practice of the European Commission is recommended.
In particular, parties can rely on the definition of markets provided
by the European Commission to the Antitrust Office. Cooperation with
the European Commission on merger control cases, including sharing of
information, was normal, even before EU accession. If serious doubts
exist about whether a transaction is compatible with the law, the Antitrust
Office may initiate a second investigation. Its decision must be made
within five months of the date of notification (in a special case of
acquisition of a share within two months). If it has not made a decision
within this time limit, the transaction is deemed to have been cleared.
Practice has shown that in order to stop the term from running, the
Office sends requests for more information to the filing party, thus
suspending the terms.
Any person or undertaking with a legal or economic interest can file
a complaint against the notified merger until the deadline set by the
Antitrust Office. It is the sole competence of the Antitrust Office
whether to accept, reject or refer the complaint to the competent institutions
and to inform the complainant in writing about this.
Concerning the decisive test, it is worth noting that amendment to the
Competition Act in 2005 has replaced the dominance test with the SIEC
test. The Antitrust Office will thus consider whether a merger will
not result in a significant impediment to effective competition, in
particular by resulting in or strengthening a dominant position of one
or more of the undertakings concerned. Thus the achievement of a dominant
position or its strengthening are only some of the examples of when
a concentration shall not be cleared. This will avoid application problems
regarding an approval of mergers on the oligopoly markets. While deciding
on the merger at stake, the Authority shall consider certain information
about the parties, including:
• market shares;
• market structure;
• necessity of preservation and further development of effective
competition;
• legal and other barriers to entry;
• needs and interests of consumers;
• no obstacles market structure;
• the parties’ economic and financial power;
• demand substitutability;
• supply substitutability; and
• potential competition.
Should the aggregated market share of the merging undertakings on the
relevant market not exceed 25 per cent, the concentration is deemed
not to result in a significant impediment to effective competition,
unless proven to the contrary. In compliance with practice of the European
Commission, the Antitrust Office uses for assessment of the market concentration
the Herfindahl-Hirschman Index of Concentration (the HHI test).
The Office may make its approval conditional on fulfilment of commitments
the parties have entered into. The parties must propose their commitments
within 15 days of the information for second phase proceedings being
delivered to the last party.
During merger clearance procedures, the Antitrust Office may comment
on any restrictive provisions that are directly related to and necessary
for the implementation of the merger for the purpose of obtaining a
complete picture and evaluating the effects of the merger.
The EC Merger Regulation (Regulation 139/2004) is directly applicable
in the Czech Republic. In addition to the European Commission’s
jurisdiction, it might be that in certain circumstances the Czech Antitrust
Office will also take decisions on mergers that were originally considered
to have a community dimension.
Joint ventures
Joint ventures are subject to Czech competition law and are assessed
according to their structure. The provisions on mergers apply to full-function
joint ventures. These are joint ventures as a result of which two or
more undertakings take sole control of another undertaking. Partial-function
joint ventures are joint ventures that perform only a few specific functions
and are evaluated under the rules governing other forms of anti-competitive
behaviour.
Enforcement
The regulatory authorities
The only regulatory body is the Czech Office for the Protection of
Economic Competition, the Antitrust Office, seated in Brno, which has
sections for competition, public procurement and state aid. The Office
is also the only national regulatory body in terms of Regulation 1/2003.
Cooperation with the European Commission and sharing of information
was already common in the past. The Antitrust Office may request competitors
and administrative authorities to provide documentation and information.
Employees of the Antitrust Office have the power to enter premises,
inspect commercial documentation, make copies and request all information
that is required for its investigation (particularly with respect to
potentially restrictive agreements or practices). Dawn raids have already
taken place.
The Office may also summon witnesses to participate in hearings. A fine
may be imposed for providing misleading information. The Office may
also now conduct (with the prior approval of the court) investigations
in premises other than business premises, namely in the homes of statutory
bodies, their members or employees, provided there is a well-founded
suspicion that business books or other documents are located there.
There is a right of appeal against decisions of the Antitrust Office,
the outcome of which is decided by the president of the Office. An appeal
must be lodged with the Antitrust Office within 15 days of the delivery
of the decision. Under the current chairman of the Antitrust Office,
the Office is more willing to bargain with and decrease the fines imposed
on the undertakings. There is also a possibility of judicial review
of the Antitrust Office’s decisions by the district court in Brno,
and the Office’s formerly very high success rate in judicial review
has been decreasing. The reason for this is that the district court
in Brno has become more confident and professional with the complex
and complicated economic analysis of the antitrust cases and become
effectively an opponent to the Antitrust Office.
Based on Regulation 1/2003, the Office shall have the power to apply
articles 81 and 82 of the Treaty in individual cases. It may take the
following decisions: require that an infringement is stopped; order
interim measures; accept commitments; and impose fines, periodic penalty
payments or any other penalty provided for in the Czech Competition
Act. The Office is also, as already mentioned, empowered to withdraw
the benefit of a block exemption regulation within the territory of
the Czech Republic under certain conditions.
Regulation 1/2003 also stipulates the rights and duties of the Office
relating to the European Competition Network (ECN). The Office may submit
its standpoint to the courts relating to the application of articles
81 and 82 of the Treaty. The conduct and decisions of the Office in
applying articles 81 and 82 are subject to the same procedural rules
as those that cover the application of the Czech Competition Act.
Penalties
A breach of the Competition Act may result in imposition of fines of
up to 10 million koruna (approximately e411,000) or up to 10 per cent
of the net turnover in the Czech Republic recorded in the last complete
calendar year. These fines may be imposed for violations such as:
• abuse of a dominant position, which applies even when the conduct
has already been terminated. The Antitrust Office may issue an interim
order to preserve the status quo in order to prevent a violation causing
irreparable injury to the victim;
• breach of the prohibition on restrictive agreements. In recent
years, penalties for breaches of the rules on restrictive agreements
have increased;
• breach of the obligation to suspend a merger unless a final
decision of the Office is issued; and
• breach of the commitments.
In the past, typical fines have been between 50,000 koruna (approximately
€2,050) and 500,000 koruna. Over the past few years, the fines
for breaches of antitrust provisions, particularly in the case of cartels,
have increased dramatically (up to 940 million koruna, or €38.6
million). A fine (or series of fines) of up to 1 million koruna (approximately
€41,100) can be imposed in the event of a breach of a decision
of the Antitrust Office. Further fines of up to 300,000 koruna (approximately
€12,300) or up to 100,000 koruna can be and have been imposed for:
• failure to provide the Office with the requested information
within the stipulated period of time, or the provision of incomplete,
false or inaccurate information;
• failure to submit requested books and other business records
or to enable their review;
• other refusals to submit to investigations under the Competition
Act;
• failure to appear at a scheduled oral hearing without a serious
reason;
• refusal to testify; or
• other obstruction of the proceedings.
Concerning the restrictive agreements, if an agreement or provision
is deemed to be in breach of the Competition Act, the entire agreement
will be invalid unless it is possible to keep the rest of the agreement
in force. The parties signing the agreement containing the restrictive
prohibitions may, however, be jointly and severally liable to the undertaking
for damages caused by such action. The Czech Commercial Code imposes
comparatively strict liability on corporate bodies, even though in practice
the responsibility of corporate bodies has not been raised very often
in court proceedings.
Private enforcement
Under Czech civil law, any prior agreement by a company to waive the
right of third parties to claim damages from it is deemed to be invalid.
There is no specific provision in the Competition Act relating to third-party
claims. According to the general regulations contained in the Czech
Civil and Commercial Codes, a person is liable for any damage caused
by failure to comply with a legal duty, such as by breaching the Competition
Act. Similar to the experience of other EU countries and at the EU level,
as mentioned in the Commission’s White Paper on Damages Actions
for Breach of the EC Antitrust Rules, private enforcement of the antitrust
law has to face the same difficulties that still hamper the effective
application of this legal statute in other European states, such as
the passing-on defence and difficulties proving some facts. In the Czech
Republic, a general distrust of the court system due to slowness and
low quality of judgments, in particular when it comes to stating lost
profit, must also be named as reason for a lack of willingness to pursue
claims at civil courts.
As in many other jurisdictions, there are agreements that fall under
the antitrust law but are being fulfilled by both parties. Performing
under an agreement that is invalid under the Competition Act effectively
gives a right to a party to claim invalidity of the illegal provision
of the agreement. The illegal provision itself is, however, invalid
by operation of law. Furthermore, any of the parties may, directly or
indirectly, ask the Antitrust Office to investigate the agreement. If
an agreement is terminated, or if the Office declares that a prohibited
agreement has been concluded (together with a prohibition of the performance
of such agreement pro futuro), the performance of the parties should
be reversed in such a way that no party has an undue advantage.
Although the Czech Criminal Code provides for imprisonment of up to
one year in the case of intentional unfair competition, according to
legal commentaries and practice, the Competition Act is not to be considered
as one of the unfair competition provisions that is governed by the
Criminal Code. Bid-rigging and some other forms would qualify as criminal
acts, but there have been no reported cases so far.
Challenges of the near future
Several issues regarding the proper application of the Czech competition
law have arisen recently.
First, the authorities are trying to define properly the term competitor
(souteitel) in section 2 of the Act. The legal definition of this
term was changed several times and still will never cover all possible
forms of undertakings that may take part in and influence competition
on the markets. Some scholars suggest cutting out the definition of
souteitel as a legal definition, to let it be defined by case
law and use, instead of the term souteitel, the term podnik within
the meaning of section 5 of Commercial Code, which corresponds better
to the term ‘undertaking’ used at the European level, and
to the term Unternehmen used in Germany.
Second, the Antitrust Office has focused very much on several commercial
practices of the big retail chains (with nobody being in a dominant
position and such behaviour not being coordinated). These practices
are mostly laid down in contracts concluded with their suppliers and
contain mechanisms to pass on costs, listing fees, rack fees, fees for
advertisement or sales promotion, or re-modelling or re-opening fees.
In many cases these practices do not actually support sales of the specific
product, but the suppliers are forced to accept and pay these fees to
the supermarket even if they do not want to do so. A refusal is followed
by restriction or even termination of the deliveries. As EC Regulation
1/2003 does not regulate ‘abuse of economic dependency’,
there have been several attempts to introduce the prohibition of the
abuse of economic dependency into national law.
A proposal currently being discussed in parliament suggests that such
a position on the relevant market, which enables an undertaking to establish
substantially more favourable business conditions with an economically
dependent undertaking than it could without such a position, shall be
considered an abuse of economic dependency and shall be prohibited.
Another solution proposed introduces an assumption according to which
a retail chain shall be considered to have a dominant position if its
turnover reaches a threshold provided by law. If it does the current
rules for abuse of dominant position would apply.
There is also strong discussion about criminalising antitrust abuses
beyond bid-rigging, and the Czech Antitrust Office seems to support
such changes to the Criminal Act. Moreover, private enforcement will
certainly play a bigger role in the future, although its relationship
with the leniency programme is still unsolved. It seems for the time
being that the Czech legislature awaits the results of the legislative
effort on private enforcement at the European level rather than introducing
itself the necessary changes in law to promote private enforcement of
the antitrust law.
bpv Braun Haškovcová
Palac Myslbek, Ovocny trh 8
110 00 Prague 1
Czech Republic
Tel: +420 224 490 000
Fax: +420 224 490 033
prague@bpv-bh.com
www.bpv-bh.com
Arthur Braun
Stepan Svoboda |
The approximately 35-strong team of bpv Braun Haškovcová
has many years of experience working under the aegis of an international
law firm, one of the leading players in Central and Eastern Europe.
We are members of bpv LEGAL, a close alliance of independent law
firms giving advice throughout the region.
Our consultancy covers diverse areas, the most important being
M&A and corporate law, real estate law and, based on over
13 years’ experience in assisting foreign investors, preparing
optimal tax structures in transactions and for new enterprises.
Depending on the needs of our clients, our consultancy involves
know-how in special areas of interest such as labour law or intellectual
property protection. Antitrust law is a particular focus of our
activities.
In close cooperation with the Vienna and Brussels offices of bpv
LEGAL, we have built up a considerable track record in European
law, in particular in the energy sector, and regarding merger
filings and cartels.
Our international presence allows us to apply specific knowledge
from different jurisdictions whenever needed.
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An extract from The
European Antitrust Review 2009 |
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