Czech Republic Competition Authority

Act of the Czech National Council No. 173/1991 Coll. On April 26, 1991, the Czech Competition Authority was created, which began its work on July 1, 1991. The location of the government was not Prague , as the capital, in which all government bodies are located, but Brno , which was supposed to affect the independence of decision-making. In 1992, this Czech Competition Authority was replaced by the Ministry of Competition. This change was justified by the ongoing economic transformation and, above all, the role of the ministry in the privatization process. Currently, competition protection in the Czech Republic is institutionally provided by the Office for the Protection of Economic Competition, based in Brno. The department began to work under this name on November 1, 1996, continuing the activities of the former ministry. The competence of the Office is determined by Act No. 273/1996 Coll., As amended by Act No. 187/1999 Coll. The main objective of this Office is to create conditions for the promotion and protection of competition, control of public procurement and public support. In the field of state aid in 2000-2004, the Office settled the issue of compatibility of the provision of state aid with EU law. This body has been fully transferred to the European Commission since May 1, 2004. Management is an advisory and supervisory body. Since February 2010, the Directorate has also been the monitoring body for compliance with the Law on Significant Market Influence and its Misuse ^[2] .

General structure

Currently, the Office is headed by the Head of the Office (Chairperson) and is divided into 5 areas. The first vice chairman is Heinek Brom , who is responsible for the Competition Section. The head of the Public Procurement Section is Vice President Eva Kubishova , and Vice President Petr Solsky is responsible for the Legislation and Government Regulation Section. The Department of External Relations and Administration of the Office is headed by Daniel Stankov . Since September 2013, there is also a Second Level Decision Section led by Mikulik Mikulik . These sections are divided into departments that carry out the direct work of the Office (for example, public procurement departments are part of the Public Procurement Section).

The activities of the Office are carried out by the internal auditor, Director of Security and the Office of the Chairman of the Office, reporting directly to the Chairman. In turn, the Office of the Chairman of the Office consists of the Secretariat of the Office and the Office of Advisers to the Chairman. ^[3]

Governing bodies

Management is carried out by the Head of the Office (Chairperson), who is appointed by the President of the Czech Republic at the proposal of the Government for a six-year term. No one may be appointed to this position for more than two terms. The chairman may not be a member of a political party or political movement. At the moment, the Chairman is Peter Rafay , whose term was extended in June 2015. ^[four]

The chairman appoints 3 vice presidents. Vice-Presidents perform functions in accordance with the decisions of the Chairman. Vice-presidents have the right to salary, reimbursement of expenses, and in case of resignation, he has the right to severance pay as vice president of the Supreme Audit Office. ^[five]

List of Chairpersons of the Office

• Stanislav Belekhradek (1991-1998) (Minister in 1992-1996)
• Vaclav Klaus (from July 4 to November 1, 1996, the Prime Minister was entrusted with the leadership of the Ministry of Competition, then the Ministry was transformed into the Office)
• Joseph Bednarge (1998-2005)
• Martin Pechina (2005-2009)
• Peter Rafay (2009 - present)

General competency

The task of the Competition Protection Authority is to create conditions for the promotion and protection of competition and to monitor compliance with the Law on Protection of Competition in the following areas:

1. Prohibited Agreements
2. Abuse of dominance
3. Competitive environment

In the event of potential distortion of competition in individual markets, the Office reviews the competitive conditions in these markets, the so-called industry demands, and proposes measures to improve them. If the body finds a possible violation of the law, it initiates administrative proceedings and has the right to impose funds to restore competition in the market or impose fines, up to ten percent of the competitor’s net turnover for the previous closed reporting period. In the event of a possible impact on trade between the Member States of the European Union, the Office shall cooperate with the European Commission .

Management fulfills its task through the following activities:

1. controls the behavior of competitors in accordance with the principles of competition law,
2. participates in the creation and adjustment of legislation,
3. intervenes in anti-competitive practices, such as cartels or abuse of dominance, when enterprises can correct their illegal behavior, which has not yet had a significant impact on the market,
4. controls public procurement and concessions ,
5. provides greater transparency and savings in the expenditure of public funds,
6. monitors and advises on public support issues in the Czech Republic to ensure compliance with applicable EU rules,
7. cooperates with suppliers in notifications of measures of state public support and submits them to the European Commission for evaluation,
8. exercises control in accordance with the Law on Significant Market Power in the Sale of Agricultural Products and Food and its Misuse, in accordance with which it tries to establish the right relationship between retailers and their suppliers.

Control over public procurement and concessions

The Office supervises public procurement and concessions, ensuring greater transparency in the expenditure of public funds, verifies the activities of public procurement organizations, supervises contracting authorities, and participates in the development and amendment of legislation on public procurement and concessions.

The procedure for concluding public contracts (including concessions) is regulated by Act No. 134/2006 Coll. "On public procurement."

Contracting authorities are required to act in a transparent, non-discriminatory and fair manner with respect to tenderers to ensure that all potential suppliers have the same conditions. In accordance with these three basic principles, the tender procedure for fair competition between bidders and the customer organization is the most cost-effective.

The Office, as a supervisor, checks whether the contracting authority has conducted a tender in accordance with the law. The Office does not have investigation tools to effectively detect corruption in public procurement, this area is the area of ​​law enforcement.

An individual or legal entity may file a complaint with the Office. Its management considers and makes decisions on satisfaction of the complaint and initiation of administrative proceedings or on refusal of satisfaction.

In the case of an appeal, the final verdict is issued by the chairman of the Office based on the draft Appeal Board. The parties may file a lawsuit against the final decision of the Competition Protection Authority with a district court in Brno, possibly also a cassation appeal to the Supreme Administrative Court. In cases where fundamental rights and freedoms may be affected, the Constitutional Court is the last resort.

The Office considers administrative offenses in accordance with the Law and imposes sanctions for their commission.

If the contracting authority does not comply with the procedure established for the state contract, and the contract has not yet been concluded, the Office cancels the procedure for concluding the state contract.

The Office imposes a ban on the execution of a contract concluded with a public contract if the contracting authority:

- commits an administrative offense in accordance with section 120 (1) c)

- commits an administrative offense in accordance with Section 120 (1) (a) and at the same time, an administrative offense in accordance with Section 120 (1) d)

- commits an administrative offense in accordance with section 120 (1) (a) and acts in accordance with section 82 (3).

Management does not prohibit the execution of the contract if there are special interests related to the public interest, which requires the continuation of the contract. An economic interest in the performance of a contract can be considered as such only in exceptional circumstances, when the termination of the contract will lead to disproportionate consequences.

The Office should not prohibit the execution of a contract if the consequences of this prohibition seriously undermine the existence of a wider protection or security program, which is fundamental to the security interests of the Czech Republic.

A contract for the performance of a public contract becomes void due to non-compliance with the procedure in accordance with the Law only in cases where the Office imposes a ban on its implementation in accordance with paragraph 2. It cannot be invalidated for other reasons.

In order to prevent violations of public procurement rules and review their compliance, the Office issues interpretative opinions on potentially problematic provisions of the Law. ^[6]

Monitoring and consulting on state support in the Czech Republic for compliance with EU rules

State support for small and medium-sized enterprises as an important factor in the country's economic development in the Czech Republic plays a special role. Since April 1, 2005, the “Concept for supporting small and medium enterprises” has been in force in the Czech Republic. At the end of 2005, the Government of the Czech Republic adopted the “Export Strategy for the Development of the Czech Republic for the Period 2006-2010”. In 2006, the Ministry of Industry and Trade of the Czech Republic (MPT of the Czech Republic) developed the “Concept of Support for Czech Companies for 2007-2017” as part of the Operational Programs financed from the EU structural funds. In addition, in May 2007, the European Commission approved the “Rural Development Program for the period 2007 - 2017”.

In general, state support in the Czech Republic for SMEs is carried out in the form of information and consulting services and assistance in organizing and conducting exhibition and fair events; financial support for the development of SMEs both at the expense of the state budget and structural funds of the European Union ; monitoring of ongoing projects, as well as supporting SMEs in the export of goods and services.

SMEs are financially supported at the regional level through regional grant programs from the European Regional Development Fund (23 programs are currently in place), as well as from the regional budget. The state provides subsidies for the provision of information and consulting services to SMEs, the control over the intended use of which is entrusted to the Office for the Protection of Competition of the Czech Republic . Mostly paid are consultations aimed at analyzing the state of the enterprise, studying its strengths and weaknesses, at introducing new forms and methods of management in order to increase the competitiveness of products.

The greatest impact on the development of SMEs in recent years has had the Operational Program " Industry and Entrepreneurship" (OIPP). OPPP - was developed by the Ministry of Industry and Trade of the Czech Republic in May 2004 after the Czech Republic joined the European Union. Its goal was to support Czech firms in the manufacturing industry. The program was financed as follows: 25% - from the state budget, 75% - from the structural funds of the European Union. None of the subsidized projects were 100% funded. The principle was that the entrepreneur paid the full amount of the project (or a certain stage of the project) independently and only after completion of the project (or a certain stage), when he documented that the declared goal was achieved, part of the money was returned to him in the form of financial subsidies. Evaluation of each project took place in several stages. The final decision on the allocation of subsidies was made by a special commission consisting of several independent experts, employees of the MPT of the Czech Republic and the Office for the Protection of Competition of the Czech Republic.

In March 2007, the Government of the Czech Republic approved the final version of the document entitled: “Framework Strategic National Concept” (RSNC) and submitted it to the European Commission for consideration in order to receive financial resources from European funds in the period 2007 - 2017. In July 2007, the RSNC was approved by the European Commission with a few comments on individual operational programs.

In general, the Czech Republic has accumulated rich positive experience in supporting small and medium enterprises. The system under consideration seems complicated and cumbersome during the initial analysis. However, as practice shows, given the factor of borrowing the main elements of this system in countries with developed market economies, as well as the long period of application and correction of deficiencies that are revealed during implementation, it is very mobile and effective. The funds spent by the European Union and the Czech Republic are ultimately repaid from taxes from developing SMEs, the development of priority sectors of the economy and the solution of social issues.

In the Czech Republic there is no single database according to which cases of the enforcement of the Competition Law could be judged. Even if there are decisions in which courts apply the EU competition law, which are mandatory for sending for publication to the European Commission, Czech courts still do not separately register cases of competition law application, and if they do, then only along with cases unfair competition, which makes such recordings unusable. When the Civil Service Office applied to civil courts in the past, it asked him to provide an overview of competition-related violations, but the answers were mainly based on the “memories” of the judges, and therefore the results were very random. The situation is further complicated by the fact that, as will be explained below, the Competition Law is rarely the only legal act on which a court decision is based, and competition issues are often “hidden” in the norms of other laws, contract law, unfair competition, etc.

Таким образом, единственный способ получить соответствующую информацию - обратиться к конкретным судам и запросить конкретные данные (что часто оборачивается слишком длительной административной процедурой в соответствии с Законом о свободе информации). Однако, это требует предварительной осведомленности о том, что конкретный суд в конкретном случае ведет судебное разбирательство с определенными сторонами процесса; при отсутствии должного освещения в средствах массовой информации такие данные практически недоступны для мониторинга. В то же время, информация, полученная такой процедурой, не может быть репрезентативной, поскольку можно предположить, что в большинстве соответствующих случаев уровень дел «о конкуренции» не соответствует интересам СМИ.

Данные, которые были собраны Управлением по защите конкуренции, не могут быть полными и статистически значимыми. Тем не менее, в соответствии с ними можно сделать некоторые выводы, указывающие на определенные тенденции реального частного применения законодательства о конкуренции в Чешской Республике.

Во-первых, новые случаи правоприменения практически идентичны, начиная с 2001 года; следует ожидать, что новый закон обеспечит более широкое частное развитие в ближайшие годы.

В настоящее время прения по этому вопросу продолжаются, однако никакого заметного увеличения интереса не наблюдается.

Во-вторых, не считая отдельных случаев с точки зрения юрисдикции, основная масса дел практически равномерно распределена между региональными судами, но со значительно большей концентрацией в муниципальном суде в Праге.

В-третьих, только треть случаев касается Закона о конкуренции, в подавляющем большинстве нарушение законодательства о конкуренции было установлено в качестве дополнения к нарушениям основных норм законодательства. В то же время, стоит отметить, что названные нарушения касаются внутреннего законодательства; закон Европейского союза упоминается исключительно редко.

В-четвертых, успех заявителей в этих случаях пренебрежимо мал. Можно выявить буквально несколько решений, в которых суд становился на сторону заявителя (и то, только частично).

С точки зрения практического развития частного правоприменения в Чешской Республике необходимо иметь репрезентативный отчет об этих случаях, который позволил бы провести их осмысленный анализ и последующую подготовку мер, направленных на преодоление реальных проблем.

In judicial resolution of disputes, it is necessary to be guided by the principle of bis in idem, which means the right not to be involved in repeated punishment. A striking example of its application is the decision of the 2012 Court of Justice of the EU . The case of a cartel conspiracy featured the largest European and Japanese manufacturers of the electrical industry. In 2007, the Commission considered the guilt proved and fined the company for a total of 750 million euros, the German Siemens suffered the largest fine of 398 million euros. Companies appealed the decision to apply fines, pointing, in particular, to a violation of the ne bis in idem principle. In 2006, in parallel with the Commission conducting its investigation, the Czech competition authority, guided by national laws on competition protection, initiated proceedings against participants in a cartel conspiracy. Already in 2007, the Czech antimonopoly body found that these companies in the period from July 1, 2001 to March 3, 2004 participated in cartel conspiracy in the Czech Republic, thereby violating its legislation on the protection of competition. The total amount of fines amounted to 37 million euros. It is important to note that the Commission established the last day of the conspiracy on May 11, 2004. Just on the same dates, May 1, 2004, the Czech Republic joined the European Union, which means EU law, including Regulation No. 1/2003, from now on The Czech Republic has become mandatory for use. Thus, if it were recognized as the end date of the conspiracy on May 11, the Office would not be able to recover a fine in the national budget.

The regional court, which adopted the case for a new ruling, appealed to the EU Court, which determined that Regulation No. 1/2003 does not interfere with the antitrust authorities of the states in their application of the national competition law in respect of violations committed on its territory prior to joining The European Union. Thus, the EU Court has determined that enterprises can be fined simultaneously by the Commission within their jurisdiction and by the national antimonopoly authority for violations that occurred before the state joined the European Union, that is, in fact, a third state that is not a member of the EU.

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