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Compatibility of Transactional Resolutions of Antitrust Proceedings with Due Process and Fundamental Rights & Online Exhaustion of IP Rights

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Abstract

Transactional resolutions of competition proceedings before the Czech Office for Protection of Competition (in Czech: Úřad pro ochranu hospodářské soutěže, hereinafter the “Office”) are quite common. The introduction of transactional institutions has had quite an interesting development in the Czech jurisdiction. After the Velvet Revolution with the advent of new competition law in the Czech Republic (at that time still part of the Czech and Slovak Federal Republic) which was enacted as Act No. 63/1991 Coll., on the protection of competition, no transactional resolutions were contemplated in the proceedings before the Office (or the respective ministry which fulfilled its role at that time). Gradually, however, the Office found its way (despite the lack of statutory provisions to that effect) to the application of some sort of transactional resolutions in its decision-making practice. Throughout the application of Act No. 63/1991 Coll., there were no formal procedures that might have led to a transactional resolution of a case. In practice, however, the Office used from time to time a form of “competition advocacy” whereby it advised (rather informally) concerned parties of objections it had towards certain practices and asked them to change these practices. If they did so, the Office either did not commence proceedings or in the commenced proceedings refrained from imposing any penalty or imposed only a ‘symbolic’ or nominal penalty. In addition, in the so-called exemption proceedings regarding potentially restrictive agreements the Office imposed (after rather informal negotiations with the parties) certain conditions and/or commitments to be complied with in order for the respective agreement to benefit from the issued individual exemption. There were, however, neither settlements nor leniency proceedings at that time. There were no commitment decisions within the control of concentration procedures either.

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Notes

  1. 1.

    See Office’s decision in case Ref. No. S 106/04-4340/04-ORP of 12 July 2004 (Pinelli/ATEA).

  2. 2.

    Pursuant to Office’s data, the Office received two leniency applications in 2010, four in 2011 and three in 2012 Office’s Information Paper No. 3/2013 available also in English at http://www.uohs.cz/cs/informacni-centrum/informacni-listy.html (28 April 2014), p. 7.

  3. 3.

    For an overview of the leniency regime applied by the Office, see also Office’s Information Paper No. 3/2013 available also in English at http://www.uohs.cz/cs/informacni-centrum/informacni-listy.html (28 April 2014). In this regard, see also Office’s Information Paper No. 3/2007 and No. 1/2004 with respect to previous leniency programmes (available only in Czech).

  4. 4.

    For the development of settlement procedure, see, e.g., Michal Petr. Narovnání v českém soutěžním právu [Settlement in Czech competition law]. Antitrust, 2011, No. 4, p. 176. For two early cases, see also Jiří Kindl. The Czech Office for Protection of Competition implements informal settlement procedures (Kofola—Albatros), 20 January 2009, e-Competitions Bulletin, January 2009, Art. N° 25768. For the current status and some selected cases, see Office’s Information Paper No. 3/2013 available also in English at http://www.uohs.cz/cs/informacni-centrum/informacni-listy.html (28 April 2014).

  5. 5.

    Section 6(2)–6(4) of Act No. 395/2009 Coll. These provisions were already applied in the Office’s decision Ref.No. ÚOHS-S167/2010-13046/2011/460 of 22 August 2011 (Ahold Czech Republic) where the case was closed without a fine by accepting commitments offered by Ahold.

  6. 6.

    Section 7 of Act No. 395/2009 Coll.

  7. 7.

    Act No. 141/1961 Coll., on Criminal Judicial Proceedings (Code of Criminal Procedure), as amended.

  8. 8.

    See Sections 307–308 (conditional suspension of criminal prosecution) and Sections 309–314 (settlement) of the Code of Criminal Procedure. In more detail, see, e.g., Jiří Jelínek et al. Trestní právo procesní [Law of criminal procedure]. 2nd edn. Leges, 2011, p. 704 et seq.

  9. 9.

    At present, Office’s Notice of 8 November 2013 on Alternative resolution of competition issues and on suspension of cases (hereinafter the “Alternative Resolution Notice”).

  10. 10.

    Leniency Notice, para. 5.

  11. 11.

    ECN Model Leniency Programme (as revised in November 2012). Available at: http://ec.europa.eu/competition/ecn/mlp_revised_2012_en.pdf (30 April 2014).

  12. 12.

    Commission Notice on Immunity from fines and reduction of fines in cartel cases, OJ C 298, 08/12/2006, pp. 17–22.

  13. 13.

    Office’s Information Paper No. 3/2013 available also in English at http://www.uohs.cz/cs/informacni-centrum/informacni-listy.html (28 April 2014), p. 6.

  14. 14.

    Section 22ba (1) letter a) of the 2001 Competition Act.

  15. 15.

    See, e.g., para. 15 of the Leniency Notice.

  16. 16.

    Section 22ba (1) letter b) of the 2001 Competition Act and para. 10–14 of the Leniency Notice.

  17. 17.

    Section 22ba (5) of the 2001 Competition Act.

  18. 18.

    Section 22ba (7) of the 2001 Competition Act.

  19. 19.

    Leniency Notice, paras 30 et seq.

  20. 20.

    Leniency Notice, paras 28–29.

  21. 21.

    Prior to 2011, the Office used the ‘settlement procedure’ (at that time even without any legislative basis) also as a sort of ‘investigative tool’ which were meant to ease the position of the Office when obtaining evidence from the parties. Also at that time, the reductions in fines were substantially higher and amounted quite often to 50 % or occasionally also to 80 %. The Office also used that tool to impose measures which it would otherwise hardly issue (due to the lack of appropriate power in the 2001 Competition Act) such as an obligation to provide damages to consumers which were affected by a conduct of the dominant company which had required excessive advance payments (see Office’s decision Ref.No. ÚOHS-S52/2009/DP-7933/2009/820 of 24 June 2009—RWE Transgas case). This practice was, however, subject to criticism (e.g., Michal Petr et al. Zakázané dohody a zneužívání dominantního postavení v ČR [Prohibited agreements and abuse of dominant position in the CR] C.H. Beck, Prague, 2010, pp. 442–443, or Jindřiška Munková, Jiří Kindl, Pavel Svoboda. Soutěžní právo [Competition Law] 2nd edn. C.H. Beck, Prague, 2012, p. 572) and has changed from the end of 2010 firstly in the Office’s practice and later on, as of 1 December 2012, by law (see current Section 22ba para. 2 of the 2001 Competition Act and the Settlement Notice).

  22. 22.

    Section 22ba (6) of the 2001 Competition Act.

  23. 23.

    Settlement Notice, para. 6.

  24. 24.

    For details, see Part II of the Settlement Notice.

  25. 25.

    See, e.g., Office’s Information Paper No. 3/2013 available also in English at http://www.uohs.cz/cs/informacni-centrum/informacni-listy.html (28 April 2014), p. 16.

  26. 26.

    Settlement Notice, para. 30.

  27. 27.

    Settlement Notice, para. 29.

  28. 28.

    Settlement Notice, para. 16.

  29. 29.

    Settlement Notice, fn 11. The 20 % reduction is calculated after establishing the final amount of fine, i.e. also after the application of leniency (type II). In other words, the maximum reduction one can achieve when both leniency II and settlement reductions are applied is 60 % of the amount of fine established in accordance with the Office’s guidelines for setting fines.

  30. 30.

    See Commission Regulation (EC) No 622/2008 of 30 June 2008 amending Regulation (EC) No 773/2004, as regards the conduct of settlement procedures in cartel cases, OJ L 171, 01/07/2008, pp. 3–5, and Commission Notice on the conduct of settlement procedures in view of the adoption of Decisions pursuant to Article 7 and Article 23 of Council Regulation (EC) No 1/2003 in cartel cases, OJ C 167, 02/07/2008, pp. 1–6.

  31. 31.

    Section 7 (2) and 11 (3) of the 2001 Competition Act.

  32. 32.

    Alternative Resolution Notice, para. 29. It has been also said that the suitable cases include cases when the complained of conduct does not concern serious offences and when it is difficult to ascertain whether the conduct in question is prohibited (Michal Petr et al. Zakázané dohody a zneužívání dominantního postavení v ČR [Prohibited agreements and abuse of dominant position in the CR] C.H. Beck, Prague, 2010, p. 475).

  33. 33.

    Alternative Resolution Notice, para. 30.

  34. 34.

    Section 7 (3) and 11 (4) of the 2001 Competition Act.

  35. 35.

    Alternative Resolution Notice, para. 28.

  36. 36.

    This form of alternative resolution of competition cases was much used in 2006 and 2007 when the Office used it in 17 and 13 cases, respectively. Since then, the Office has used this option on average of 5 cases a year. See Office’s Annual Report for 2012, p. 12. The respective cases include both restrictive agreements and abuses of dominant position. For some examples, see, e.g., the said Annual Report, pp. 12–14 and 16–17.

  37. 37.

    Section 21 (2) of the 2001 Competition Act.

  38. 38.

    Alternative Resolution Notice, para. 17.

  39. 39.

    Alternative Resolution Notice, paras 22, 23 and 25.

  40. 40.

    Settlement Notice, para. 30.

  41. 41.

    Section 7 (2) and 11 (3) of the 2001 Competition Act.

  42. 42.

    Act No. 99/1963 Coll., as amended.

  43. 43.

    Alternative Resolution Notice, para. 45.

  44. 44.

    For more details concerning private competition litigation in the Czech Republic, see, e.g., Jiří Kindl, Michal Petr. Czech Republic. In: Gordon Blanke, Renato Nazzini (eds). International Competition Litigation. A Multi-jurisdictional Handbook. Wolters Kluwer, 2012.

  45. 45.

    Section 22a (1) letter e) and Section 22a (2) of the 2001 Competition Act.

  46. 46.

    Section 7 (4) letter b) and Section 11 (5) letter b) of the 2001 Competition Act.

  47. 47.

    Constitutional Act No. 2/1993 Coll., Charter of Fundamental Rights and Freedoms of the Czech Republic, as amended.

  48. 48.

    SAC, judgment Ref. No. 5 Afs 95/2007-353 of 29 May 2009 (BILLA — Meinl I.)

  49. 49.

    Art. 37 et seq., Charter CZ.

  50. 50.

    ECtHR, judgment of 23 November 2006, application No. 73053/01 (Jussila v. Finland).

  51. 51.

    SAC, judgment Ref. No. 6 A 126/2002-27 of 27 October 2004.

  52. 52.

    Act. No. 500/2004 Coll., Administrative Proceedings Code, as amended.

  53. 53.

    CC, ruling Ref. No. I. US 636/05 of 21 August 2006.

  54. 54.

    E.g., ECtHR, judgment of 17 December 1996, application no. 19187/91 (Saunders v. the United Kingdom).

  55. 55.

    E.g., CJEU, case 374/87 Orkem v. Commission [1989] ECR 3283.

  56. 56.

    Arts. 37 (1) and 39 (4) Charter CZ.

  57. 57.

    ECtHR, judgment of 17 December 1996, application no. 19187/91 (Saunders v. the United Kingdom), par. 69.

  58. 58.

    ECtHR, judgment of 17 December 1996, application no. 19187/91 (Saunders v. the United Kingdom), par. 71.

  59. 59.

    CJEU, case 374/87 Orkem v. Commission [1989] ECR 3283, par. 34 and 35.

  60. 60.

    ECtHR, judgment of 23 November 2006, application no. 73053/01 (Jussila v. Finland), par. 43.

  61. 61.

    See, e.g., Wouter Wils. Self-incrimination in EC antitrust enforcement: a legal and economic analysis. [2003] 4 World Competition 567.

  62. 62.

    Regional Court, judgment Ref. No. 62 Af 75/2010-318 of 23 February 2012 (Cartel CRT).

  63. 63.

    Sections 21e and 22c of the 2001 Competition Act.

  64. 64.

    Regional Court, judgment Ref. No. 62 Af 75/2010-318 of 23 February 2012 (Cartel CRT).

  65. 65.

    CC, opinion Ref. No. Pl. US 30/10 of 30 November 2010.

  66. 66.

    Translated from Czech by the author.

  67. 67.

    Sections 7 (2) and 11 (3) of the 2001 Competition Act.

  68. 68.

    Section 22ba (2) of the 2001 Competition Act.

  69. 69.

    Section 22ba (1) of the 2001 Competition Act.

  70. 70.

    Regional Court in Brno, judgment Ref. No. 62 Af 75/2010-318 of 23 February 2012 (CRT Cartel), SAC, judgment Ref. No. 8 Afs 25/2012-351 of 29 January 2015.

  71. 71.

    Art. 40 (2) Charter CZ.

  72. 72.

    Art. 48 (1) Charter EU.

  73. 73.

    Art. 6 (2) ECHR.

  74. 74.

    SAC, judgment Ref. No. 7 Afs 86/2007-107 of 31 October 2008 (Česká lékárnická komora).

  75. 75.

    Act. No. 155/2009 Coll., on the amendment of the Act on the protection of competition.

  76. 76.

    E.g., SAC, judgment Ref. No. 5 Afs 7/2011-619 of 29. 3. 2012 (Bakeries Cartel II.).

  77. 77.

    Section 7 (3) of the 2001 Competition Act.

  78. 78.

    Section 21b of the 2001 Competition Act.

  79. 79.

    Para. 23 of the Settlement Notice.

  80. 80.

    Para. 29 of the Settlement Notice.

  81. 81.

    SAC, judgment Ref. No. 5 Aps 4/2011-326 of 22 September 2011 (Telefónica).

  82. 82.

    Section 38 (2) of the Administrative Proceedings Code.

  83. 83.

    Section 38 (1) of the Administrative Proceedings Code.

  84. 84.

    Section 38 (6) of the Administrative Proceedings Code. Such information is defined in Act No. 412/2005 Coll., on the protection of classified information and security qualifications, as amended.

  85. 85.

    The same rules that apply to business secrets also apply to banking and similar secrets protected by law; the Office has, however, so far only dealt with business secrets.

  86. 86.

    Section 504 of Act. No. 89/2012 Coll., Civil Code.

  87. 87.

    Section 21c (1) of the 2001 Competition Act.

  88. 88.

    Section 21c (2) of the 2001 Competition Act.

  89. 89.

    CC, Ruling Ref. No. II. ÚS 192/05 of 11 July 2007 (Telefónica).

  90. 90.

    SAC, judgment Ref. No. 9 Afs 59/2011-644 of 28 March 2012 (Mobile Operators: T-Mobile III.).

  91. 91.

    Act No. 360/2012 Coll., on the amendment of the Act on the protection of competition.

  92. 92.

    Section 21c (3), (4) of the 2001 Competition Act.

  93. 93.

    Regional Court in Brno, judgment Ref. No. 62 Af 75/2010-318 of 23 February 2012 (CRT Cartel).

  94. 94.

    Regional Court in Brno, judgment Ref. No. 62 Ca 37/2009-680 of 21 April 2011 (České dráhy) (translated from Czech by the author). The judgment is currently under review before the SAC.

  95. 95.

    Paras. 16 and 19 et seq. of the Settlement Notice.

  96. 96.

    Art. 37 (3) Charter CZ.

  97. 97.

    Section 7 of the Administrative Proceedings Code.

  98. 98.

    Regional Court in Brno, judgment Ref. No. 62 Af 71/2012-831 of 20. 9. 2012 (Bakeries Cartel III.).

  99. 99.

    In this case, the statement of objections was not issued because the proceedings started before it was enshrined in the 2001 Competition Act.

  100. 100.

    Section 7 (2) and 11 (3) of the 2001 Competition Act.

  101. 101.

    Office’s Information Paper No. 3/2013 available also in English at http://www.uohs.cz/cs/informacni-centrum/informacni-listy.html (28 April 2014), p. 16.

  102. 102.

    Section 152 of the Administrative Proceedings Code.

  103. 103.

    Section 14 (6) of the Administrative Proceedings Code. The impartiality rules similarly do not apply to top representatives of other similar institutions as the Office.

  104. 104.

    CC, ruling Ref. No. Pl. ÚS 30/09 of 2 April 2013 (Dopravní podnik Ústeckého kraje).

  105. 105.

    Section 68 of Act No. 150/2002 Coll., Code of Administrative Justice, as amended.

  106. 106.

    Section 78 of the Code of Administrative Justice.

  107. 107.

    Section 103 of the Code of Administrative Justice.

  108. 108.

    Art. 40 (5) Charter CZ.

  109. 109.

    SAC, judgment Ref. No. 5 Afs 9/2008-328 of 31 October 2008 (RWE Transgas I.).

  110. 110.

    The proceedings may be reopened if new facts emerge within 3 years after the decision was issued (Art. 100 et seq. of the Administrative Proceedings Code) or if it comes out within a year that the decision was illegal (Art. 94 et seq. of the Administrative Proceedings Code).

  111. 111.

    Section 7 (2) and 11 (3) of the 2001 Competition Act.

  112. 112.

    Section 22a (1) (e) of the 2001 Competition Act.

  113. 113.

    Section 7 (4) and Sec. 11 (5) of the 2001 Competition Act.

  114. 114.

    Section 21a of the 2001 Competition Act.

  115. 115.

    E.g., SAC, judgment Ref. No. 1 Afs 76/2008-246 of 29 May 2008 (Ústecký kraj), where a party allegedly harmed by an abuse of dominance attempted to join the court proceedings. Similarly in merger review cases, parties raising complaints against the merger are not parties to the proceedings. The Regional Court, however, ruled that they may file an appeal against the Office’s decision to its chairman. See Regional Court, judgment Ref. No. 62 Af 55/2011-174 of 2 July 2013 (Litvínovská uhlená). The SAC did not share this view and cancelled the regional court judgment (Ref. No. 9 Afs 72/2013-127 of 26 February 2015).

  116. 116.

    Sec. 38 (2) of the Administrative Proceedings Code.

  117. 117.

    SAC, judgment Ref. No. 1 Afs 86/2013-78 of 23 January 2014 (RegioJet). Similarly in a merger review, the undertaking raising objections against the merger usually has the legal interest to access the file; see SAC, judgment Ref. No. 9 Afs 29/2012-53 of 28 March 2013 (Litvínovská uhelná).

  118. 118.

    Section 49 of the Administrative Proceedings Code.

  119. 119.

    See, e.g., SAC, judgment Ref. No. 1 Afs 76/2008-246 of 29 May 2008 (Ústecký kraj).

  120. 120.

    SAC, judgment Ref. No. 6 Ans 6/2013-27 of 7 June 2013 (Mediaservis).

  121. 121.

    SAC, judgment Ref. No. 1 Ans 12/2013-82 of 16 January 2014 (RegioJet).

  122. 122.

    E.g., in the Office’s decision Ref. No. S-282/2008/DP-4232/2009/820 of 28 April 2009 (ČEZ), the commitments consisted in amendments to contractual relations between a company suspected of abuse of dominant position and a complainant.

  123. 123.

    Para. 32 and 37 of the Leniency Notice.

  124. 124.

    Para. 25 of the Leniency Notice.

  125. 125.

    Para. 19 of the Settlement Notice.

  126. 126.

    Section 7 (2), (3) and Sec. 11 (3), (4) of the 2001 Competition Act.

  127. 127.

    E.g., Regional Court in Brno, judgment Ref. No. 62 Ca 37/2009-680 of 21 April 2011 (České dráhy). The judgment was cancelled by the SAC but the respective issue was not overturned (SAC, judgment Ref. No. 7 Afs 57/2011-1255 of 28 August 2014).

  128. 128.

    Section 20 (1) (a) of the 2001 Competition Act.

  129. 129.

    All decisions are available (in Czech) at: http://www.uohs.cz/cs/hospodarska-soutez/sbirky-rozhodnuti.html (1 May 2014).

  130. 130.

    Para. 27 of the Settlement Notice.

  131. 131.

    For details regarding this procedure, see Jindřiška Munková, Jiří Kindl, Pavel Svoboda. Soutěžní právo [Competition Law] 2nd edn. C.H. Beck, Prague, 2012, pp. 514–516.

  132. 132.

    Commission notice on remedies acceptable under Council Regulation (EC) No 139/2004 and under Commission Regulation (EC) No 802/2004, OJ C 267, 22/10/2008, pp. 1–27.

  133. 133.

    In 2013, there were, however, only 35 such proceedings. For the relevant statistical data, see Office’s annual reports available at http://www.uohs.cz/en/information-centre/annual-reports.html and Office’s statistical data available at http://www.uohs.cz/cs/informacni-centrum/statistiky/statistiky-z-oblasti-hospodarske-souteze.html.

  134. 134.

    For instance, in 2012 there were three such cases (Office’s Annual Report for 2012, p. 18) and four such cases in 2013.

  135. 135.

    Pursuant to Office’s statistics available at http://www.uohs.cz/cs/informacni-centrum/statistiky/statistiky-z-oblasti-hospodarske-souteze.html (30 April 2014) and Office’s annual reports, there were three such cases in 2012, one in 2011, one in 2010, one in 2009. There was no such case in 2013.

  136. 136.

    See Office’s Annual Report for 2012, pp. 19–22, or in detail Office’s decisions in cases Ref. No. S472/2011; Ref.No. S396/2011 and Ref.No. S544/2012.

  137. 137.

    Pursuant to Section 15(4) of the 2001 Competition Act, the merger approval proceedings are initiated when the Office receives a complete application for approval of concentration, including all the required particulars.

  138. 138.

    Section 17(4) of the 2001 Competition Act.

  139. 139.

    In this regard, see SAC’s judgment Ref.No. 9 Afs 29/2012-53 of 28 March 2013 (Litvínovská uhelná), subsequent judgment of the Regional Court in Brno Ref.No. 62 Af 59/2010-117 of 2 July 2013 (Litvínovská uhelná) and the final SAC’s judgment Ref.No. 9 Afs 73/2013—43 of 9 April 2014. See also Jiří Kindl. The Czech Supreme Administrative Court renders two rulings dealing with access of complainants to files in competition proceedings (Asiana v Student Agency and Litvinovska uhelna cases), e-Competitions Bulletin, June 2013, Art. N° 52498.

  140. 140.

    Regional Court in Brno, Ref.No. 62 Af 55/2011-174 of 2 July 2013 (Litvínovská uhelná).

  141. 141.

    Section 22a (1) letter e) and 22a (2) of the 2001 Competition Act.

  142. 142.

    Section 18(5) of the 2001 Competition Act.

  143. 143.

    Section 19(1) of the 2001 Competition Act. For more details regarding sanctions for non-compliance with legal duties in mergers, see Jindřiška Munková, Jiří Kindl, Pavel Svoboda. Soutěžní právo [Competition Law] 2nd edn. C.H. Beck, Prague, 2012, pp. 523–525.

  144. 144.

    See, e.g., the opening words of the Office’s Chairman in the Information Paper No. 3/2013, available also in English at http://www.uohs.cz/cs/informacni-centrum/informacni-listy.html (1 May 2014).

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Authors and Affiliations

  1. Weil, Gotshal & Manges, Prague, Czech Republic

    Jiří Kindl M.Jur, Ph.D.

  2. Faculty of Law, Palacky University, Olomouc, Czech Republic

    Michal Petr Ph.D.

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  1. Jiří Kindl M.Jur, Ph.D.
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Correspondence to Jiří Kindl M.Jur, Ph.D. .

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  1. Addleshaw Goddard LLP, London, United Kingdom

    Bruce Kilpatrick

  2. de Weck, Zoells & Kobel, Geneva, Switzerland

    Pierre Kobel

  3. Këllezi Legal, Geneva, Switzerland

    Pranvera Këllezi

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Kindl, J., Petr, M. (2016). Czech Republic. In: Kilpatrick, B., Kobel, P., Këllezi, P. (eds) Compatibility of Transactional Resolutions of Antitrust Proceedings with Due Process and Fundamental Rights & Online Exhaustion of IP Rights. LIDC Contributions on Antitrust Law, Intellectual Property and Unfair Competition. Springer, Cham. https://doi.org/10.1007/978-3-319-27158-3_6

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