Competition Law in the Czech Republic Josef Bejček Robert Neruda Michal Petr David Raus This book was originally published as a monograph in the IntemalÍonal Encyclopaedia of Laws/Competition Law. General Editors: Roger Blanpain, Frank Hendrickx Volume Editors: Francesco Denozza, Alberto Toffoletto Table of Contents The Authors 3 List of Abbreviations 11 General Introduction 13 §l. GENERAL BACKGROUND OF TIlE COUNTRY 13 §2. 1HE ECONOMIC SYSTEM 14 1. Property System 14 II. Re-codification in the Early Nineties and Privatization 15 III. Privatization and Competition 16 §3. THE LEGAL SYSTEM 18 §4. HISTORICAL BACKGROUND OF ANTlTRUST LAW 20 I. Pre-war Period and tbc Era of a 'Real Socialism' 20 II. Co-creating Foundations of Market Beonomics 21 lIl. Further Developments 24 lY. Most Recent Phase 27 Part 1. The Structure of Antitrust Law and Hs Enforcement 29 Chapter 1. Sources of Antitrust Law 29 §l. NATIONAL SOURCES 29 1. Competition Act 29 II. Other Sources 34 §2. INTERNATlONAL SOURCES 35 §3. SECONDARY SOURCES 36 1. Regulations 36 II. Guidelines 37 Table of Conten!s §4. SOURCES' RELATlON AND HlERARCHY §5. ROLE AND AUTHORlTY OF PRECEDENTS Chapter 2. Scope of Application §I. TERRITOR!AL REACH §2. SPEClAL SECTORS §3. STATE-OWNED ENTERPRISES AND PUBLlC UTlLlTlES §4. SENSlBLE EFFECT AND DE MINIMIS Chapter 3. Overview of Substantive Provisions §I. RESTRICTlVE AGREEMENTS §2. DOMINANT UNDERTAKlNGS §3. CONCENTRATlONS §4. OTHER PROHlBITlONS §5. TESTS OF ILLEGALlTY I. Per se Prohibitions and Naked ReSlraints II. Balancing Tests lli. Merger Tests Chapter 4. Overview of Main Notions §I. UNDERTAKlNG §2. RELEVANT MARKET §3. MARKET POWER/DOMINANT POSlTlON §4. AGREEMENTS AND CONCERTED PRACTlCES §5. RESTRlCTlON OF COMPETlTlON §6. MONOPOLlZATlON §7. CONCENTRATlONS I. Positive Definition 6 42 44 47 47 47 48 51 55 55 56 60 63 63 63 64 66 67 67 67 70 71 73 74 75 75 Table of Contents II. Negative Definition III. Tumover Thresholds §8. JOINT VENTURES Chapter 5. Consequences of Violations and Enforc~ment Institutions §1. ADMlNlSTRATlVE ENFORCEMENT I. The Anti!rust AuthonlIes A. Forrnation, Composition B. Jnvestigating Powers C. Adjudicating Powers (Ascertaining and Sanctioning) ll. Govemment Díreet Enf:orcement Activities lli. Other Administrative Agencies Applying Antitrust Rules N. Administrative Fines V. Administrative lnjunctions and other Restrictive Orders VI. Iuterím Mcasures §2. OVIL ENFORCEMENT I. Competent Civil Courls ll. Sanctions A. Nullity B. Damages C. Interim Measures §3. CRlMINAL ENFORCEMENT L Criminal Sanctions for Antitrust Víolations II. O!her Application of Criminal Law to Relevant Conduc! III. Role of Prosecutors A. Competent Criminal Cour!s Part II. The Application of the Prohibitions Chapter I. Restrictive Agreements §I. HORIZONTAL AGREEMENTS I. Carlels A. Price Fixing B. MarketlClient AllocatÍon C. Production/lnnovation Limitation D. Group Boyco!t E. Collusion on Othcr Objects II. Inf01mation Exchange Practices III. Cooperation Agreements A. Research and Development 76 77 77 79 79 79 81 82 84 87 87 88 94 95 95 99 lOl 102 103 104 105 106 108 109 110 113 113 116 117 117 119 120 120 121 123 123 124 7 Table of Contents B. Specialization C. Standardization D. Joint Production E. Joint Purchasing F. Joínt Sellíng §2. VERTlCAL AGREEMENTS 1. Distribution A. Exclusive Distributorship B. Exc1usivc Dealing C. Se1ective Distribution D Franchísíng ll. Technology Licencing A. Patent Líccncing B. Trademark Liccncing C. Know-How and Trade Secrct Licencing Chapter 2. Dominant Undertakings' Prohibited Practices §I. EXPLOITATIVE PRACTICES I. Excessive/Unfair Pricing II. Discrimination §2. EXCLUSIONARY PRACTICES I. Predatíon II. Tyíng III. Rebates IV. Refusal to Dcal V. Price Squceze Chapter 3. Concentrations I. Merger ll. Acquisitíon af an Enterprise III. Acquísítion of an Undertakíng IV. Joint Ventures §I. HORlZONTAL MERGERS I. Non-coordinated Effccts II. Coordínated Elfects §2. VERTICAL MERGERS I. Non-coordínated Elfects II. Coordínated Effccts §3. MARKET/PRODUCT EXTENSION MERGERS 8 125 125 126 126 126 127 128 129 129 129 130 131 131 131 131 132 132 132 136 139 139 141 143 146 149 152 156 157 158 162 164 165 167 168 169 170 171 §4. PURE CONGLOMERATE MERGERS .§5. JOiNT VENTURES Part III. Administrative Procedure Chapter 1. Administrative Investigation before tbe Antitrust Authority §1. lNITIATlVE 1. General Sector lnquiries ll. Ex offieio Investigations III. Complaínts §2. POWERS 1. Requests for Inforrnation II. lnvestigation and Search Powers III. Cooperatíon wíth Other State lnstitutions §3. RIGHT OP DEFENCE I. Content and Notification oť Opening Decisions II. The Procecdings: Hearíngs, Access to Fíle, Bríefs III. Statement of Objections IV. Final Hearing and Decision Table of Contents 172 173 175 175 175 175 179 183 184 185 186 189 189 189 190 193 193 Chapter 2. Voluntary Notifications and Clearance Decisions 195 Chapter 3. Merger Control §l. PRELlMINARY FIL/NG OBLlGATlONS I. Crítería and Thresho1ds II. Tumover Calculatíons III. Market Share Calculations lY. Otber Re1evant Notíons A. Pre-notification Negotiations B. Notificatíon C. Símplified Procedure §2. STRUCTURE OP PROCEEDlNGS 1. Preliminary Assessment and FuU InvesLigation A. The First Phasc B. The Second Phase II. Time Framework III. Right of Defence 196 197 197 198 201 201 201 203 205 206 206 206 209 209 211 9 Table of Contents §3. CLEARANCE AND CONDlTIONAL CLEARANCE I. Conditions and Undertakings A. Content B. Timing §4. RELATIONS WITH OTHER MERGER CONTROL AUTHORITLES 1. Other Authorities within the Local Jurisdiction II. Intemational Coordination Chapter 4. Challenging of the Adrninistrative Decision 212 213 214 217 217 217 217 219 §1. COMPETENT COURTS 219 I. The Regional Court in Brno 219 II. The Supreme Administrativc Courl 219 §2. liME LIMITS AND PROCEEDlNGS 220 1. Proceedings Concerning an Action against a Decision af tbe Office 220 II. Proleclion against Inactivity of lhe Officc 221 III. Special Proceedings Conceming Protection against Unlawful Interference, Instruction or Enforccmcnt [rom thc Office 221 lY. Proceeding before !he Supreme Administrative Cour! 222 §3. SCOPE OF JUDlCIAL REVIEW 223 Selected Bibliography 225 Index 227 List of Abbreviations Coll. CTO CZK EC Treaty ECJ ECMR EEA ERO EU GDP IDU JV NCA Office OJ R&D RPM SIEC SME TIBU Collection of Laws of !he Czech Republic Czech Telecommunications Office Czcch Crown Treaty Establishing the European Community Cour! of Justice of !he European Union Council Regulation No. 139/2004, on tho contml of concentrations af undertakings European Economic Area Energy Regulalory Office European Unian Gross Domestic Product Herfindahl-Hirschman Index Joint Venture Nalional Competition Aulhority Czech Office for Protection of Competilion Official Joumal Research and Development Resale Price Maintenance Significant lrnpediment to Effective Cornpetition Small and Medium Enlerprises Treaty on the Functioning of the European Union