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04 May 2020
czech republic

Czech Constitutional Court upholds Act on Significant Market Power but declares 3% limit on marketing payments unconstitutional

The Czech Constitutional Court did not repeal the Act on Significant Market Power, as demanded by a group of senators almost four years ago. However, the judges stated that the provision on limiting the amount of suppliers’ payments to customers with significant market power to 3% of the supplier's annual sales, is unconstitutional. "It is not a reasonable means to achieve the objective pursued by the Act, as it forces the parties to the supplier-customer relationship to negotiate the limitation of the amount of all monetary performances of the supplier for related customer services by a fixed amount, whereas the maximum amount cannot be determined in advance," the Constitutional Court stated.

This decision is of fundamental importance for the future cooperation of suppliers and customers, especially in the promotion of supplier products, marketing events, setting business strategies in the sale of products, etc.