Recent changes adopted for competition law in the Czech Republic

The Czech Parliament has recently adopted Amendment no. 340/2004 Coll. to the Czech Act no. 143/2001 Coll., on the Protection of Competition (taking effect from 2 June 2004).

The major changes introduced by the Czech Act on the Protection of Competition are:

• The full implementation of R 1/2003 and R 139/2004 - i.e. national competition law is now only applicable if a transaction has no Community dimension (where the competence of the Commission comes into existence);

In the field of merger control:

• New thresholds for notification to the Competition Authority have been set:

1. If the turnover of all the undertakings involved in the Czech Republic is CZK 1500 million (EUR 48 million) or more, and at the same time a turnover of CZK 250 million (EUR 7 million) is achieved by each of at least two undertakings involved in the Czech Republic; or
2. If, in the Czech Republic, a turnover of CZK 1500 million (EUR 48 million) is achieved by one participant in the merger, or by the target of the share purchase, or by the seller of the assets (business), or by one participant in a joint venture (this depends on the category of concentration and the character of the transaction) and at the same time the worldwide turnover of at least one other undertaking involved is CZK 1500 million (EUR 48 million);

• As a basis for calculation, only the turnovers of the purchaser and the target will be used (also the turnover on the seller's side under its previous status w calculated);

In the field of anticompetitive agreements:

• The system of individual exemptions has been cancelled. Exemptions are now applicable only if the entity fulfils conditions set directly by law (in accordance with R 1/2003);
• "De minimis" percentages have been increased from 5 to 10% (for horizontal agreements) and from 10% to 15% (for vertical agreements);
• Preliminary rulings of the Czech Competition Authority regarding the admissibility of a certain agreement (or of certain market behaviour by a dominant competitor) have been cancelled. The Competition Authority now only deals with cases ex-post (i.e. if it already suspects that an agreement or activity is incompatible with competition law);

Procedural changes:

• Cooperation between the national Authority and the Commission was introduced;
• Dawn-raid investigations were adopted: it is now possible for inspections of private residences to occur (e.g. the residences of managers) if it is expected that some evidence may be found there. This action may only be taken upon a court order (court approval).

For further details on the above Amendment and on how it may influence your business please contact
Jan Rataj on +420 22 109 8871 or at: [email protected]