Czech competition authority unveils ambitious draft reform
The Czech Republic's Competition Authority (CCA) has published a long-awaited draft amendment to its 2001 Competition Act. The sweeping overhaul would grant the CCA a significantly expanded enforcement toolkit, including a novel market investigation mechanism, direct administrative sanctions for individual managers, and a broadened merger control framework featuring a new call-in power.
Key issues and proposed changes
Merger control thresholds would be modified after more than 20 years, with monetary thresholds for mandatory notifications set to increase. The assessment of joint ventures would also be brought fully in line with EU approaches, exempting those with no local nexus and only one active parent in the Czech Republic.
A post-closing review risk would arise for sub-threshold deals within a six-month window, with the target's Czech revenues irrelevant to triggering the call-in. The simplified procedure would be unavailable for both voluntary and mandatory call-in filings, with clearer substantive criteria for exercising the call-in and access to the simplified procedure deemed highly beneficial.
Structural remedies, including forced divestitures, could be imposed without a finding of competition law infringement, based solely on market structure. Precision of conditions for opening market investigations and imposing different types of remedies would be crucial.
Individual liability would see senior managers face direct personal administrative sanctions, including fines of up to CZK 10 million and a five-year activity ban, for the first time in Czech competition law. Businesses should understand that facilitation and pure attempts to collude would also be punishable, with robust individual protection within the leniency framework required.
Inspection powers would be bolstered, with off-site continuation of inspections set to become standard practice, allowing the CCA to extend its review of electronic records well beyond the day(s) of the on-site raid. Clearer conditions for accessing a significantly broader pool of public-source data would increase investigative capacity, while proactive reporting obligations on other public bodies would be particularly noteworthy for businesses in regulated sectors and those active in public procurement.