The Czech Competition Authority (CCA) has proposed updates to the Czech Competition Act, signaling potential changes to competition enforcement in the country. The proposal includes the introduction of a new competition tool that would enable the CCA to intervene in markets without requiring proof of anticompetitive behavior. Additionally, the CCA wants call-in powers for under-threshold mergers.
While the proposal is still in its early stages, the CCA’s press release provides insights into its proactive enforcement approach for the future. The CCA already enforces the act on significant market power and unfair trade practices, as well as overseeing public procurement. If these ideas become law, the CCA could become one of the most powerful authorities within the EU in terms of enforcement tools.
Currently, the CCA has a range of enforcement tools at its disposal, including investigating anticompetitive agreements and abuse of dominance, and reviewing mergers that exceed turnover thresholds. However, the CCA believes it needs additional power to impose remedies without initiating a formal investigation. The proposed tool would allow the CCA to impose corrective measures on market participants even in the absence of antitrust violations.
The CCA has identified industries prone to structural distortion, such as digital and oligopolistic markets, where these measures may be used. This could have implications for investors considering entering the Czech market, potentially impacting their willingness to do so.
In addition to the new competition tool, the CCA is proposing a call-in model that would enable it to require notification of any transaction with a link to the Czech market. This power could be applied retroactively, allowing the CCA to review closed deals, potentially increasing the number of transactions under threat of reversal.
The proposal doesn’t stop there. The CCA is also seeking the authority to conduct dawn raids without needing to establish a reasonable suspicion of antitrust infringement, aiming to perform random and preventive inspections. This power could be a cause for concern, as it may lead to the undue targeting of competitors without effective judicial oversight.
Furthermore, the CCA wants to introduce fines for natural persons, particularly managers, participating in anticompetitive conduct. This would hold managers accountable for their company’s infringement, potentially influencing investment decisions in local targets.
While the proposal marks the beginning of what could be a significant update to Czech competition law, the outcome remains uncertain. A thorough discussion involving all stakeholders is necessary before the proposal progresses into a bill for parliamentary consideration. If implemented, these changes could shape competition enforcement in the Czech Republic for years to come.
