Will amendment to the Act on the Protection of Competition bring significant changes?

Even though the Czech Republic has already missed the deadline for the transposition of the relevant EU directive, it is yet again attempting to amend the Act on the Protection of Competition. The amendment should allow to keep the identity of whistle-blowers confidential and is also intended to strengthen the powers of the Czech anti-trust office and tighten settlement conditions.

The Office for the Protection of Competition (ÚOHS) prepared a draft amendment to the Act on the Protection of Competition, submitted for comments by the end of last year. The amendment specifically implements the relevant EU directive, giving more powers to competition protection authorities. The deadline for the directive’s implementation expired on 4 February 2021 and infringement proceedings are pending against the Czech Republic. It is therefore high time that the law was brought into line with the EU directive, otherwise the Czech Republic may face sanctions by the European Commission.

One of the important changes will be the confidentiality of whistle-blowers reporting anti-competitive behaviour. Whistle-blowers will be able to request their identity’s confidentiality to guard against threats or damage to their legitimate interests. Their identity will then remain confidential before, during, and after the proceedings, during the taking of evidence and during judicial review, and will not appear in documents issued by the Office for the Protection of Competition.

The amendment also significantly strengthens the powers of the Office for the Protection of Competition, proposing that the office be able to use wiretaps acquired by the police in criminal proceedings if they suspect the conclusion of a prohibited (target) cartel agreement. The amendment also explicitly stipulates that the Office for the Protection of Competition may request police assistance when conducting a local investigation.

Equally important will be the intended alteration of settlement procedures. Under the current concept, if a competitor admits to anti-competitive conduct, their fine is reduced by 20% and they are not banned from performing public contracts. For many competitors, this has been the main motivation for using the settlement procedure. Under the proposed amendment, however, the conditions for using the settlement procedure will be much stricter: the office may reduce the competitor's fine by less than 20% (but still by at least 10%) and, above all, may impose a ban on the performance of public contracts for up to one year. The aim of the proposed new rules is to make the leniency programme (allowing to detect other members of prohibited cartel agreements) more advantageous, to the detriment of the settlement procedure.

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