The Czech Office for the Protection of Competition (“Office”) has in mid-January unveiled a set of legislative proposals aimed at bolstering its effectiveness in detecting and penalizing anticompetitive behaviour. Included are, for example, new competences to investigate and sanction in concentrated markets, to request data previously gathered by other public authorities, and to carry out random dawn raids.  The extent and nature of these proposed changes is nevertheless quite surprising and has stirred up controversy.

Expanded Authority over Concentrated Markets

Currently the Office may combat anticompetitive behaviour by sanctioning the conclusion of prohibited agreements, the abuse of a dominant position or by preventing certain structural changes to the market. The Office however proposes to expand its authority in investigating markets where competition is distorted by conduct that is not “traditionally” anticompetitive. As mentioned by the Office, this includes oligopoly markets prone to tacit collusion or markets with strong network effects, such as digital markets.

The new competences would enable the Office to investigate such concentrated markets and impose corrective measures if needed. These could include reviewing more mergers, setting down standards, ordering the provision of access to networks or data, regulating certain agreements, or even mandating the separation of business divisions.

Random Dawn Raids, Expanded Merger Control & Other New Tools 

The Office laments the lack of effective tools to combat anticompetitive behaviour. To this end, the Office proposes to enable it to conduct random dawn raids, similar to the trade inspection’s competences, or at least to conduct “preventive” dawn raids in highly concentrated markets.

The proposal also mentions other tools, such as financial rewards for whistleblowers or sanctions for natural persons who participate in anticompetitive conduct. It also calls for expanded competences in merger control of competitors falling short of the turnover threshold. The Office could then retrospectively request notification from these merging competitors if it deemed the merger to be potentially anticompetitive.

Telecommunication Monitoring and Access to Data from Public Authorities

Furthermore, the Office notes the importance of telecommunication data for its investigations. It proposes to be included on the list of authorities permitted to request telecommunication traffic and location data from providers of electronic communication services and networks.

On a separate note, the proposal also calls for authorising the Office to request data already collected by other public authorities for other purposes, but which may be relevant to antitrust investigations. 

Controversy of New Proposal

The extent and radical nature of the proposed expansion of the Office’s competences has drawn severe criticism. For example, dawn raids are currently considered to be an exceptional instrument against which competitors may defend themselves if a dawn raid is unfounded or excessive. Such defences must not become “everyday universal tools” to undermine the grounds or findings of dawn raids, as was recently confirmed in a judgment by the Czech Supreme Administrative Court from 29 November 2023. Nevertheless, the permission of random dawn raids, also known as “fishing expeditions”, would far exceed established principles.

Other tools included in the proposal, such as access to data collected by other public authorities or telecommunication monitoring, also raise important questions with respect to constitutional rights and freedoms. The proposal is currently at the level of political debate and likely to be subject to further scrutiny before (and if) it enters the legislative process.

We will continue to monitor the developments in the Office’s proposal. The proposal can be found here (in Czech only) and the cited Supreme Administrative Court’s decision can be found here (in Czech only).

If you need more information or further guidance in this area, please contact Vojtěch Chloupek and Martin Taimr.

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