You may have noticed that there has been a discussion about an amendment to the Act on Protection of Competition in recent weeks. If it passes the legislative procedure, what would it mean in practice?
The most significant news is the potential for fines to be imposed on managers or other company representatives, as "natural persons", for participating in cartel agreements. Simply "facilitating" or "encouraging" the conclusion of a prohibited anti-competitive agreement will be sanctionable. Such a person may be fined up to CZK 10 million or may be banned from performing business activity for up to five years. In terms of culpability,"pure" unconscious negligence will be sufficient. In practice, this may mean something as minor as not leaving a meeting where companies discuss future prices or discounts.
Another proposed change relates to the leniency programme. The person involved in the cartel agreement may newly apply for leniency, i.e. for a waiver to be fined or to obtain a fine reduction. Thus, leniency is no longer available for companies, as legal persons, only.
Another proposed change to be aware of is the introduction of the so-called call-in model. The Czech Competition Authority will now be able to reassess mergers or acquisitions of companies (competitors), even if the transaction does not meet the financial thresholds. The Competition Authority may assess mergers or acquisitions that have already occurred, i.e. retroactively. It will be sufficient for the Competition Authority to have a suspicion that such a merger, whether planned or already implemented, distorts economic competition.
Last but not least is the proposal to formally abolish the 40% market share threshold as a clear indicator of a dominant market position. However, dominance is assessed based on various criteria, meaning that a company with a smaller market share can still be deemed dominant. Therefore, it is likely that this change will not result in a significant shift in practice.
