Last year’s development of competition law and its present impact — I

The Office for the Protection of Competition has published its annual report for 2020, which, inter alia, deals with legislative developments and decision-making practices in the field of competition law. This article summarises changes in competition legislation, and how they affect the present. A brief overview of the office’s case law for the past year, including the relevant statistics, will be presented in the June issue of the Tax and Legal Update.

Since last year, three amendments concerning competition law have been in the legislative process: the Competition Act, the Electronic Communications Act and the Public Procurement Act. Some of these have already entered into effect, some will do so soon.

Following the EU Directive, the amendment to the Competition Act proposes to strengthen the position of the Office for the Protection of Competition, making some concept more efficient in practice, such as the settlement procedure: it allows to reduce, by 20%, a penalty assessed to a competitor who has confessed to an involvement in a prohibited cartel, an abuse of a dominant position, or a merger contrary to law. Although the directive’s implementation deadline expired on 4 February, the bill only goes to the first reading at the April session of the Chamber of Deputies.

At the same April session, a draft amendment to the Electronic Communications Act will also proceed to the second reading, allowing the office to access mobile phone traffic and location data, as is currently the case for law enforcement authorities. The purpose should be to detect the anti-competitive behaviour of competitors and conduct subsequent administrative proceedings against them. However, due to the controversy of this amendment, currently opposed by the majority of deputies (MPs), it is unlikely that the amendment will pass through the legislative process.

As for the changes to the Public Procurement Act that already have a binding effect, we must mention a new principle added to the principles of public procurement: that of socially responsible, environmentally friendly and innovative procurement. This principle, similarly as the transparency principle or non-discrimination principle, shall be respected throughout the entire procurement procedure, and, unlike the other principles, shall regulate also its content, not just the process. The principle should already be followed from 1 January 2021. Another amendment to the same act, with proposed effect from 1 July 2021, is still waiting in the deputies’ chamber for its first reading. It is intended to reduce the administrative burden for contracting entities by abolishing the duty to send tender documentation to the office (it should suffice to publish it through a certified electronic tool), and to enhance protection against ‘bid rigging’ – cartel agreements concluded in connection with the procurement procedure (e.g. by introducing the duty to publish the contracting entity’s written report in a machine-readable format, or to disclose in the report also information about the bidding prices of the participants in the procurement procedure).

In addition to the duties in the area of competition protection, from June 2021, contractors will also face duties relating to the new Act on the Registration of Beneficial Owners. Contractors (Czech legal entities) will have to register their beneficial owners in the relevant register. Should they fail to do so, the contracting authority will not be able to obtain the information about the selected contractor from the register, and thus will have to exclude the selected contractor from the procurement procedure. For foreign contractors, a similar requirement shall apply, with the difference that if the foreign contractor is unable to produce an extract from the foreign register of beneficial owners because no such register exists, they will be allowed to meet this requirement in another way.

Competition regulation have undergone changes also at the EU level, concerning both mandatory legislation and non-binding ‘soft law’. To mention just some: there is the adoption of the Temporary Framework for state aid measures to support the economy in the current COVID-19 outbreak, or the extension of the validity of the General Block Exemption Regulation or the de minimis Regulation until the end of 2023.

 

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