On 29 July 2023, an amendment to the Act on the Protection of Competition entered into effect, significantly strengthening the powers of the Czech anti-trust authority, the Office for the Protection of Competition. Among other things, it provides for the possibility of using police wiretaps and introduces fundamental changes concerning diversions from regular proceedings.
The most controversial change introduced by the amendment concerns the use of police wiretaps. The Office will newly be entitled to use recordings of police wiretaps as evidence in detecting prohibited cartel agreements. However, the recordings must have been taken by the police during investigations of anti-competition crimes after the effective date of the amendment. The new wording of the act does not authorise the Office for the Protection of Competition to wiretap or to order wiretapping. The decision to make wiretaps available to the Office should be made by law enforcement authorities (police, public prosecutors, and courts); the Office for the Protection of Competition should be just a passive recipient of the recordings taken by the police. Nevertheless, the amendment still significantly strengthens the position of the Office.
Another change with a major practical impact concerns the required essentials of the mandate (authorisation) to carry out on-site investigations. The Office for the Protection of Competition will no longer have to precisely identify the competitor’s business premises in which the investigation is to take place but it will suffice to identify the competitor being investigated. This will limit the competitors’ options to avoid and possibly hinder on-site investigations.
As regards proceedings before the Office for the Protection of Competition, the amendment introduces the possibility to conceal an informant’s identity. The Office may agree to keep their identity confidential if requested by the informant no later than when reporting the possible anti-competitive conduct and if their legitimate interests may be endangered or harmed. If the Office grants the request, it is obliged to keep the informant’s identity confidential before, during, and after the proceedings.
The amendment also fundamentally changes diversions from regular proceedings, such as settlement. While until now the competitor’s fine was automatically reduced by 20% if they settled, from now on the Office will have the discretion to reduce the fine by 10 to 20%. In this respect, the Office will consider, e.g., the length and complexity of the proceedings. The late filing of an application to reduce the fine by means of settlement may therefore become more expensive for competitors. Another inconvenience is that even if settlement is used, the Office for the Protection of Competition will be entitled to impose a ban on public contracts for up to 1 year on the competitor.
The leniency programme has also undergone changes. What is important for the competitors is that the amendment extends the programme to cover also vertical agreements. Furthermore, it introduces the possibility to reserve (book) the order of their application: it gives the (potential) applicant for leniency the possibility to protect the order of their application and thus benefit from the leniency programme. The Office then sets a deadline for the competitor to submit the documents supporting the application. All documents submitted within this time limit shall be deemed to have been submitted at the time when the application to reserve an order has been submitted.
The amendment brings further changes pertaining to, e.g., fines, liability of competitors’ associations, acceptance of obligations, and prioritisation. The Office has also issued a new decree on the details of applications for leniency and for international cooperation, regulating specific requirements for information or documents for leniency application purposes.
The amendment to the Act on the Protection of Competition, which mainly aims to transpose the ECN+ Directive into Czech law, has been debated since 2020. It has only passed now, after the implementation deadline expired.