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11 February 2021
newsletter
czech republic

Czech Republic: Competition authority battles non-cooperative competitors

The Office for the Protection of Competition recently issued two press releases1 in which it confirmed one fine and imposed another on non-cooperative competitors, the first for an obstruction during a dawn raid and the second for not replying to a request for information.

Obstruction during dawn raid

The chair of the office dismissed an appeal by EGEM sro against a Kc2.36 million (€90,075) fine for obstructing a raid. The fine was imposed in September 2019, following an on-site investigation at the company's premises, during which EGEM promised to ask its managing director to be present in person together with his work electronic devices, which were supposed to be screened by the office. The office further stated that the managing director's no-show influenced the flow of the investigation and its purpose.

EGEM allegedly argued in its appeal that the office had tried to restrict the managing director's personal liberty by requiring his presence at the dawn raid and that it did not promise that he would show up. EGEM also disagreed with the amount of the fine.

The office rejected all of the arguments, making it clear that a company may not use the absence of key management during a dawn raid as a pretext to avoid the screening of their electronic devices and communication channels. The office also considered the amount of the fine to be appropriate (0.1% of the turnover), noting that it may impose a penalty of up to 1% of the undertaking's turnover. Meanwhile, the legality of the dawn raid was confirmed by the Brno Regional Court.

Failure to reply to request for information

The other fine was imposed by the office in a first-instance decision regarding SCIENTICA AGENCY, sro (Scientica) for ignoring the office's request for information. According to the press release, Scientica is a party to an administrative proceeding in which the office is investigating a possible prohibited agreement between audiovisual suppliers. The office approached Scientica with a request for information necessary for the further course of the administrative proceedings. Scienetica did not react to this request and similarly ignored repeated requests. Consequently, in November 2020 the office imposed a first fine of Kc20,000 (approximately €770). Since Scientica did not react even after that, the office has now imposed a second fine of Kc50,000 (approximately €1,900). In general, the office may impose a fine of up to 1% of the turnover on a company that fails to cooperate with it and may do so repeatedly.

Comment

The fines demonstrate how important it is for companies to be aware of their procedural rights and obligations during investigations carried out by the office. This can be achieved, for instance, through regular compliance training for the company's management and employees.

 


Endnotes

1 Available here and here (in Czech only).

This article was first published on International Law Office, 11.02.2021.
author: Claudia Bock

Claudia
Bock Matoković

Attorney at Law

belgium / EU