Czech Republic ∙ First Decision Concerning Anticompetitive Conduct of Public Authorities Approved by Court

In 2012, the Czech Competition Authority gained a new competence concerning supervision over anticompetitive conduct of public authorities, it was however rather reluctant to exercise it. It took four years before it had issued its first decision based on the new regulation, which was finally approved by the Authority’s President a year later. Finally, in February 2020, an administrative court endorsed one of the subsequent Authority’s decisions, bringing some clarity into the rather ambiguous wording of the legislation in question.

I. Introduction

In the Czech Republic, the first legislation on competition law entered into force already in 1991.¹ Next to ‘classical’ anticompetitive conduct of undertakings, ie collusive practices, abuse dominance and merger control, it also contained a provision on anticompetitive conduct of public authorities.² This specific regulation was probably included into the competition law due to the contemporary economic situation of the Czech Republic, where – before the revolution of 1989 – all the producers and providers of services were state-controlled and no private entrepreneurs existed.

This provision was however not much used in practice. It also needs to be emphasised that the Czech Competition Authority (CCA) lacked any decision-making competences in this regard – it was not allowed to decide that certain conduct of public authorities distorted competition or to impose fines, it could only ‘request’ public authorities to remedy the situation.³ When the new Competition Act entered into force in 2001,⁴ it did not include any regulation of public authorities, only of undertakings.

However, in 2012, the same regulation was re-introduced into the Competition Act. It was added into an amendment of the Competition Act (concerning primarily leniency and settlements)⁵ not by the Government, but by one of the Members of Parliament; it was however later endorsed by the Prime Minister.

The wording of the provision in question is very brief, it only states that ‘public authorities are prohibited from distorting competition by aid favouring a particular undertaking or by any other means’.⁶ Unlike under the original competition law from 1991, the CCA is allowed to take enforceable decisions under the new regulation – it may decide that there was a breach of competition law⁷ and impose a fine of up to CZK 10 million...