Czech Republic: Overview

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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 became effective. This Act had its origin in the competition law of the European Communities and took some principles from other national competition laws, particularly the German one. It 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, a new and still valid Act on the Protection of Competition No. 143/2001 (the Competition Act), effective as of 1 July 2001, was enacted, 10 years after the adoption of the first Act. 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 types of (vertical) agreements. With a few exceptions, the Competition Act already conformed to EC competition law at the time it was adopted, and is still considered to be the main source of Czech competition law.

With regard to the EC Regulation 1/2003 on the implementation of the rules laid down in articles 81 and 82 of the Treaty establishing the European Community (now articles 101 and 102 TFEU) and its decentralisation approach, an important amendment was enacted: No. 340/2004, 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 The Act first of all repealed, in accordance with the change of the notification system to the legal exemption system on the European level, sections 8 and 9 of the Competition Act, which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, EU competition law must also be considered and is applicable in cases with a community dimension. In this respect, Council Regulation (EC) 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 Competition Act, relating to the EC Merger Regulation, was enacted in 2005 (Act No. 361/2005). It replaced the dominance test with the significant impediment to effective competition test (SIEC); inserted new provisions on cooperation between the 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 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.

A further exhaustive amendment was performed by Act No. 155/2009, introducing, among other things, a simplified merger filing; rewording the regulations on commitments and many procedural rules – including on dawn raids; and expressly fixing the burden of proof on the participants of cartels that the exceptions to the prohibition apply to them. This amendment came into force on 1 September 2009.

Finally, the last (and long-awaited) amendment of the Act (No. 360/2012) came into force on 1 December 2012. Besides smaller changes (eg, adoption of the state and other public bodies’ liability for anticompetitive practices or update of the links to the TFEU rather than to the Treaty establishing the European Community), the amendment introduces the leniency policy into the Competition Act as hard law, as well as creating a new factual general de ­minimis rule which gives the Antitrust Office the choice not to initiate antitrust proceedings ex officio (as regards cartels and abuse of the dominance) if there is no public interest in such proceedings due to the minimal adverse effect of the conduct on competition. Another important development, though not of great significant yet, was the supervisory powers the Antitrust Office has been given to exercise over other state bodies in competition matters.

An amendment of a more technical character was approved in 2016 and will enter into effect in 2017.


The Competition Act contains a general prohibition on agreements between undertakings that 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 101 TFEU. Therefore, the abundant case law of the General Court and Court of Justice may be used for the solution of legal problems arising under 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). Prohibited anticompetitive 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;
  • division of markets or sources of supply;
  • application of dissimilar conditions to identical or equivalent transactions with other undertakings, thereby placing them at a competitive disadvantage;
  • tying clauses; and
  • group boycotts.

Prohibited anticompetitive 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.

Prior to the amendment Act No. 188/2011, the Competition Act included its own de minimis rule. Vertical agreements did not fall under the prohibition if the market share of each of the participants of the agreement did not exceed 15 per cent. In the case of a horizontal or a mixed horizontal and vertical agreement, or where it was difficult to classify the agreement as either horizontal or vertical, a 10 per cent market share threshold applied. This de minimis rule did not apply to hard-core restrictions, such as agreements, that had as their object direct or indirect price fixing or market sharing. Several agreements were exempt if they complied 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 did 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 did not need to be implemented via an amendment of EC Regulation 1/2003. Hence, any changes of the de minimis thresholds had to be implemented by adopting a law. According to the latest amendment of the Competition Act effective from 1 September 2009, this de minimis rule was repealed and de minimis thresholds in the form of soft law will apply.

According to 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.

Cartel proceedings

The Antitrust Office will usually launch official proceedings by sending a statement of objections upon receiving relevant information on a cartel agreement. It may, of course, start proceedings based on information obtained through its own activities. The latest amendment of the Act enables the Antitrust Office not to persecute if the effects on the markets are very limited (ie, it introduces a factual general de minimis rule depending on the assessment of the situation by the Antitrust Office). The right to investigate premises other than business premises has been granted to the Antitrust Office, particularly with respect to the need for gathering information and evidence about restrictive agreements. The number of dawn raids has increased considerably in recent years to between 15 and 20 per year.

The 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 Antitrust Office seems to be more open to informal bargaining with undertakings.

In recent years, the leniency policy has become an important part of Czech antitrust law and Czech cartel proceedings.

Nevertheless, statistically there is only a one-digit number of vertical and horizontal cases per year actually decided, still with a fairly high share of resale price maintenance cases.


A commitment system has been introduced that is identical to the rules of the European Commission. It should enable competitors to offer to meet certain commitments that – provided such commitments are sufficient for the protection of competition, the harmful situation is eliminated by their fulfilment and the distortion of competition has yet to occur – will avoid intervention by the Antitrust Office. However, the Antitrust Office may reopen the proceedings where there has been a substantial change in the circumstances on which the decision on non-intervention was based, the under­takings act contrary to their declared commitments, or the decision was issued on the basis of incorrect or incomplete documents, data or information.


Leniency as hard law was officially implemented into the Competition Act in 2012. However, the Czech Republic already had several years of experience with a leniency policy under which any person or undertaking with a legal or economic interest can, within the leniency programme, inform the Antitrust Office of restrictive agreements and practices. A leniency programme for parties to a cartel agreement was introduced in 2001 as soft law (ie, without being legally defined and regulated in the Act), with the first reported case occurring in May 2004 and substantial changes in June 2007 (the leniency programme as of June 2007 should apply only to hard-core horizontal agreements). Before the EU accession in 2004, as demonstrated in the Gas Insulated Switchgear cartel, even if an international cartel was already sanctioned on the European level, it was possible to apply under the leniency programme for the time before EU accession and receive full indemnity from Czech prosecution.

From the very beginning of the leniency policy application, the Antitrust Office has kept its self-commitment in all known cases. Since then, it has been put into application in various cases, even though sceptics point to the fact that most (maybe even all) applications were related to antitrust proceedings going on at EU level (relating to cartels before EU accession in 2004) or other international cartel investigations with potential Czech applications and basically saved some cartelists some money and the Antitrust Office some work, but did not bring completely unknown cartels to light.

One of the major problems for wider use of leniency programmes in a purely Czech context was that certain (hard-core) horizontal cartels were criminalised in 2010, meaning using the leniency programme would expose the cartelist’s management or employees to criminal proceedings. The state prosecutor had stated already in 2007 that he would consider participation of the employer in a leniency application as a mitigating fact; nevertheless, this has no real influence on the final court decision and certainly held off several cartelists from filing – unless the persons agreeing on the cartels were foreign nationals without major fear of criminal prosecution by Czech authorities as in the cases known. Nevertheless, there have not yet been any published criminal proceedings with the exception of bid rigging.

However, the situation changed in 2012 when the concept of leniency was officially implemented into the Competition Act (section 22ba), shifting it from soft to hard law with clear rules and conditions. The new hard law leniency policy has taken over most of the previous leniency programme. In compliance with the currently valid leniency rules, the first application can receive up to full leniency and the second up to 50 per cent reduction of fines if he provides proof with substantial evidential importance. Other cartelists may receive a reduction by 20 per cent only if they admit the cartel and such sanction is considered by the Antitrust Office to be sufficient.

Another important element and motivation for cartelists in practice is that any successful leniency applicant or entity with claim to reduction of fines shall not be sanctioned by prohibition on the performance of public contracts or prohibition on the performance of a concession contract if such sanction could be otherwise imposed on them.

Finally, introducing leniency into hard law reduced the criminal risk for the applicants. Act No. 360/2012 amended, among others, the Criminal Code and the applicants are given immunity from the criminal sanctions provided that the Antitrust Office has waived or reduced the fine.

As for the ‘scope of the leniency’, originally – according to the old leniency programme – leniency applied only to cartels, but according to the Competition Act, the offenders can also be granted a fine reduction by 20 per cent when abusing a dominant position or implementing a concentration contrary to the Competition Act.

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 Competition Act. The undertaking has no obligation to inform the Antitrust 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 Competition Act implements the ‘essential facilities’ doctrine, which has 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, which 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 recently liberalised markets (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 announced an increased focused on such abuse. Nevertheless, during the years 2010–2014 only four proceedings for abuse of a dominant position were initiated.

As with other agreements, the Antitrust Office will initiate proceedings by requiring competitors, clients, suppliers and public administrators to provide the necessary information. In particular in abuse cases, the first cases of private enforcement have been launched; however, it is too early to give a statement to what degree the Czech civil courts are prepared to decide antitrust issues.


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;
  • one or more undertakings take direct or indirect control of the whole or part of another undertaking; and
  • establishment of an undertaking jointly controlled by several undertakings, whereby two and more concentrations subject to each other and interrelated in terms of matter of fact, time and personnel shall be assessed as one concentration.

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. On the other hand, the 2017 amendment extended the cases of takeover of control also to private persons and other forms of concentration.


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 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 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 47 in 2014. Cases decided by the European Commission instead of the Antitrust Office explain only a small part of this decrease; of more importance 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 2008 and 2009.

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 as to 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 must be paid with the filing.

During the proceeding, the Antitrust 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. Some improvements to the complicated and often repetitive form to be used (based on the old Form CO of the European Union) can be expected in the near future.

The notification must be drafted in Czech and all financial information must be expressed 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 the case of commonly used languages, such as English, German or French, the Antitrust Office usually requires no translation, and 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 30 days of the date of notification; otherwise the transaction is deemed to have been approved.

A simplified merger control proceeding with fewer requirements as to the content has for a few years made up more than half of the approximately 40 to 50 filings overall per year. It may be used if:

  • the parties are not active on the same relevant market or their joint market share is below 15 per cent; and
  • in the event of vertical integration, the joint market share of the parties is below 25 per cent; or
  • joint control shifts to single control.

Unless the Antitrust informs the applicant that it requires more information, after 20 days without a decision the merger will be 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 frame (usually less than one week).

Informal guidance from the practice of the European Commission is recommended. In particular, applicants 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-phase investigation. Its decision must be made within five months of the date of notification. 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 Antitrust Office sends requests for more information to the filing party, thus suspending the terms. Nevertheless, of the around 40 mergers each year decided on by the Antitrust Office, most are cleared in the first phase.

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, the Antitrust Office applies the SIEC test. The Antitrust Office will thus consider whether a merger will 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;
  • the necessity of preservation and the further development of effective competition;
  • legal and other barriers to entry;
  • the needs and interests of consumers;
  • 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 the Herfindahl-Hirschman Index (HHI) test for the assessment of market concentration.

The Antitrust Office may make its approval conditional on fulfilment of commitments that 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 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 only. 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 anticompetitive behaviour.

Sanctions for breach of the merger notification duties

As mentioned above, transactions carried out in breach of the notification duties may lead to the Antitrust Office ordering various measures to restore competition (including a demerger order) and a fine. A 2013 decision by the Antitrust Office fined a competitor with some 500,000 koruna many years after the – economically insignificant – merger took place (in this case, non-compliance with the notification duty committed in 2002). The Office argued in its decision that the unlawful status created by the merger continued, so that no statute of limitation could be argued.


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 Antitrust 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. For about six months following the European Court of Human Rights decision from 2 October 2014 (DELTA PEKARNY), dawn raids were halted by the Office itself in order to investigate the effective court relief against them, the standstill period ended in spring 2015.

The Antitrust Office may also summon witnesses to participate in hearings. A fine may be imposed for providing misleading information. The Antitrust 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 Antitrust 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 Antitrust 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 Regional Court in Brno, and the Antitrust Office’s formerly very high success rate in judicial review has been decreasing. The reason for this is that the Regional Court in Brno has become more confident and professional with the complex and complicated economic analysis of the antitrust cases, and has effectively become an opponent to the Antitrust Office.

Based on Regulation 1/2003, the Antitrust Office shall have the power to apply articles 101 and 102 TFEU 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 Competition Act.

The Antitrust 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 Antitrust Office relating to the European Competition Network. The Antitrust Office may submit its standpoint to the courts relating to the application of articles 101 and 102 TFEU. The conduct and decisions of the Antitrust Office in applying articles 101 and 102 are subject to the same procedural rules as those that cover the application of the Competition Act.


A breach of the Competition Act may result in the imposition of fines of up to 10 million koruna or up to 10 per cent of the net turnover in the Czech Republic recorded in the last complete accounting period. 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 Antitrust Office is issued;
  • breach of the commitments; and
  • non-fulfilment of imposed reparatory measures.

In the past, typical fines have been between 50,000 koruna 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 1.2 billion koruna), but not all, in particular not the important ones, have withstood court decisions. A fine (or series of fines) of up to 1 million koruna can be imposed in the event of a breach of a decision of the Antitrust Office. Further fines of up to 300,000 koruna or up to 100,000 koruna can be and have been imposed for:

  • failure to provide the Antitrust 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.

The 2012 amendment of the Act also solved a long, court-disputed issue stating that penalties shall be applicable on legal successors.

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 Act on Commercial Corporations furthermore imposes on corporate bodies the obligation to act with care of prudent businessman, even though in practice such obligation of corporate bodies has not been raised very often in court proceedings.

Private enforcement

There is no specific provision in the Competition Act relating to third-party claims. According to the general regulations contained in the Czech Civil Code, a person is liable for 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 taken into consideration in the proposed directive on damages actions for breaches of EU competition law, 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 the low quality of judgments, particularly when it comes to stating lost profit, must also be named as reason for a lack of willingness to pursue claims at civil courts. Nevertheless, the Antitrust Office has set a goal to increase the use of private enforcement in the future and the first cases were reported in 2014.

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 Antitrust 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 provided in the past for certain criminal sentences in the case of intentional unfair competition or bid rigging, in practice, criminal law played no role in antitrust law. In 2010, prison sentences of up to three years were introduced for anyone entering into agreements with a competitor on price fixing on market sharing, or other (horizontal) agreements with anticompetitive effects (section 248(2) of the Czech Criminal Code). The maximum prison sentence is increased to between six months and five years if the act has been committed as part of an organised group or has been repeated, or considerable damage or profit for the guilty party was made. Such considerable damage or profit is defined by the Czech Criminal Code as being 500,000 koruna and more. Should the damage or profit made be 5 million koruna or more, or had such behaviour led to insolvency of a third party, the minimum prison sentence is raised to a staggering frame of between two and eight years. Certain flaws exist in particular, as applicable laws (ie, Criminal Code and Act on criminal liability of the legal entities) allow for the punishment only of competitors as natural persons, or the statutory bodies (or their members) of the competitors, while competitors as legal entities cannot be criminally punished for antitrust infringements since the antitrust infringement is not defined as one of the criminal acts that can be committed by a legal entity. The actual use of criminal sanctions will remain low; still, it should have a deterrent effect and must be considered in the event of internal investigations or for leniency applications. Since the latest 2012 amendment, if leniency applies, the competitor whom was granted leniency is excluded from criminal sanctions.

Challenges in the near future

Several issues regarding the proper application of the Czech competition law have arisen recently.

After many years of intense discussions, the Act on Significant Market Power for the Sale of Agricultural and Food Products and the Abuse thereof (No. 395/2009) came into effect on 1 February 2010, and despite some political attempts to abolish it, it is being put into action. The law defines important market power as dependency of the supplier on the buyer (the retailer). Some criteria – such as market structure, market entry barriers, market shares of suppliers and buyer, their financial strength, the size of the shops and locations – are to give additional guidance. A refutable presumption states that such important market power is presumed with a net annual turnover above 5 billion koruna, which would include the eight largest (all foreign-held) retailers.

Dozens of practices formerly described in the appendices to the Act, either infringing provisions on invoicing, on general business terms, or infringing on obligations resulting from the contract with the supplier terms in detail, are prohibited.

The most important prohibitions concern practices such as:

  • requiring listing fees;
  • bearing of the retailer’s marketing costs;
  • sale below the purchase price (with various exceptions); or
  • unjustified and sudden termination of a long-term commercial relationship.

The Antitrust Office has already issued its first significant penalties. Legal insecurity is still high, and an amendment with more precise wording went into effect in 2016 abolishing a detailed list of prohibited practices that were in the former appendices but adding up to legal insecurity. It is to be remembered that the penalty is up to 10 per cent of turnover – the same as for the cartels. Nevertheless, it will still take years to establish a reliable practice in the retail food sector.

The international developments, for instance in vertical agreements, will certainly also continue to show effects in Czech antitrust law; at present, this type of vertical agreement still forms a large part of the Antitrust Office’s investigations and cartel sanctions.

The original intention to follow the more economic approach (signified, for example, by the nomination of a chief economist) was, in the opinion of many in the Czech antitrust community, set back considerably due to personal turmoil at the Office over the past few years. However, as an agency, the Antitrust Office is undergoing considerable personal growth with new responsibilities in public procurement.

Private enforcement is predicted to play a bigger role in the future, and the first court cases have already started, although its relationship with the leniency programme is still unsolved. With a view to the fact that not even the last amendment to the Competition Act solved the protection against private enforcement claims, it seems for the time being that the Czech legislature awaits the results of the legislative efforts on private enforcement at the European level, rather than itself introducing the necessary changes in civil and procedural law to promote private enforcement of the antitrust law.

Finally, in relation to the possible extension of the term of the President of the Office, general questions about the efficiency of the Office have arisen. One of the reactions was a call for more intense investigations into horizontal cartels, shown by a record number of proceedings started in 2014, and putting more of a focus on bid-rigging cases.

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