Last year’s development of competition law – Czech Anti-Trust Office case law (II)
In this article, we summarise the decision-making practice of the Office for the Protection of Competition (“Anti-Trust Office”) in individual areas, including related statistics. We also focus on how successful competitors have been in remonstrance proceedings before the president of the Office (second-degree decisions) and in the review proceedings of the Office’s decisions before the administrative courts.
First-degree decision-making
In 2020, the Office issued 65 first-degree decisions, imposing over CZK 266 million in fines. Importantly, 11 decisions concerned prohibited agreements, and serious horizontal cartels were identified in seven cases. For instance, fines in the aggregate amount of over CZK 118 million were imposed for the conclusion of a cartel agreement concerning an IT contract for the city of Přerov; in this case, the competitors not only effectively shared the public contract through mutual contacts and exchange of information, but even participated in drafting the winning bid specifications. As the competitors met all conditions for the settlement procedure, the Office eventually reduced their fines by 20% and did not impose a ban on performing public contracts.
The Office also imposed a first-degree penalty of CZK 20 million for the abuse of a dominant position by Intergram. This collective rights administrator was found guilty of enforcing disproportionate terms and conditions for the use of copyright-protected work of performing artists and producers of audio and audio-visual recordings through TV sets and radios located in an accommodation facility. The abuse of a dominant position consisted in the fact that Intergram had demanded fees even for unoccupied rooms. This decision has not yet become final and conclusive, as Intergram has filed a remonstrance against the decision.
A penalty of CZK 984,000 for the anti-competitive conduct of a public administration authority was imposed on the Capital City of Prague. Following a remonstrance procedure, this penalty was reduced to CZK 740,000. The punishable conduct involved the setting of parking conditions for hybrid vehicles that were found to be biased, discriminatory and disproportionate in view of the intended purpose of the regulation, i.e. to limit the negativeimpact of transport emissions on air quality.
Traditionally, the largest number of decisions concerned the mergers of competitors. In none of the 47 cases, the merger was prohibited; in the 34 cases where the merger met the stipulated conditions the decision was issued in a fast-track procedure within a shorter deadline.
Second-degree decision-making
A total of 20 remonstrance proceedings were initiated in 2020, 13 of which concerned prohibited agreements. In total, seven second-degree decisions were issued, six of them on the merits of the case. In five cases, the president of the Office denied the remonstrance and in one case altered the decision. In a case concerning the abuse of the dominant position by OSA (Copyright Protection Association for the Rights to Musical Works), the Office’s president confirmed the fine of CZK 10,676,000; here, the abuse of a dominant position consisted in a behaviour similar to that of Intergram - i.e. that OSA’s fees did not take into account whether rooms were occupied.
In the past year, the Office mostly succeeded in defending its decisions in judicial review proceedings before the administrative courts. Of the nine cases before the Regional Court in Brno, seven were decided in the Office’s favour. The Supreme Administrative Court dealt with four cassation complaints against the regional court’s judgments, and in all cases ruled in favour of the Office.
Supervision over public procurement
In 2020, the Office imposed 65 fines totalling CZK 11,904,000 in the area of public procurement, inspecting mostly public contracts in construction, IT and healthcare. Most common errors by the contracting entities were, e.g.: indeterminate and/or ambiguous specification of the tender conditions, discriminatory qualification requirements, or incomplete settlement of suppliers' objections.
Second-degree decision-making in the field of public procurement
As regards public procurement, remonstrances against first-degree decisions were filed in 215 cases. The Office’s president issued a total of 223 decisions, and upheld the first-degree decisions and denied the remonstrance in 66 percent of them. In 2020, the average time needed to issue a second-degree decision was 53 days, which is a slight decrease for the third year in a row.