Czech Republic: Constitutional Court upholds Act on Significant Market Power but declares 3% limit on marketing payments unconstitutional
In a recent decision, the Constitutional Court upheld the Act on Significant Market Power, despite demands for its repeal by a group of senators almost four years ago.
However, the court stated that the provision limiting the amount of suppliers' payments to customers with significant market power to 3% of the suppliers' annual sales is unconstitutional.
The court stated that:
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.
This decision is of fundamental importance to future cooperation between suppliers and customers, especially with regard to, for example, the promotion of supplier products, marketing events and setting business strategies for product sales.
This article was first published in International Law Office