The Czech Chamber of Deputies has recently passed a long
expected draft of an amendment to the Act on Protection of
Competition (the "Act"). The major change to the Act
consists of the adoption under Czech law of a legal basis for the
leniency programme and settlement.
The leniency programme, which is an important tool in the
detection of a cartel, was put in place in 2001, and in 2007 was
amended to reflect current practice within the EU. The principle of
the programme is to cancel, or reduce penalties for cartel
participants who cease the illegal practice and provide the
Competition Office with information about the cartel in which the
participant was involved. The information provided must be of an
important nature which enables detection and destruction of the
cartel, or information which provides specific and significant
evidence regarding ongoing investigations into the cartel.
In practice, the amendment to the Act will improve the legal
position for those who apply for leniency. So far, the leniency
programme has worked more or less as an agreement between the
leniency applicant and the Competition Office, without any legal
basis. Therefore, applicants for leniency have had no certainty
that the Competition Office would fulfill promises to cancel
penalties. The protection of applicants' procedural rights has
been also uncertain. With the introduction of a legal basis for
leniency, the motivation for cartel participants to use the
leniency programme should increase. This also relates to the new
regulation regarding access to files of proceedings, which so far
has been unclear under Czech law. The need for an answer to this
question has also been urged by the recent Pfleiderer Judgment of
the Court of Justice (C-360/09). The amendment to the Act now
expressly prohibits third parties from having access to files of
proceedings (including the leniency application).
Furthermore, participants in the proceedings will not be able to
access the leniency application until the statement of objections.
The amendment to the Act also introduces a legal basis for
settlement. The Competition Office will be authorised to reduce by
20% fines imposed for anti-competitive behaviour (i.e. not only
cartels, but also abuses of a dominant position or implementation
of a merger prior to its approval). However, this will apply only
in cases where the proposed solution is sufficient for the
elimination of the anti-competitive situation.
The introduction of this regulation is followed by further
changes in the area of administrative offences and crimes.
Another innovation brought by this amendment to the Act is that
it will be possible to exclude competitors who violate competition
law from participating in public tenders for a period of three
years. The draft of the amendment to the Act must now pass through
the Senate and be signed by the President. It should come into
force in the second month following its publication in the
Collection of Laws.
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