Document 5 - Amendment to the Act on the Protection of Competition

[1/3] The amendment to the Act on the Protection of Competition and the Act on Financial Market Recovery Procedures brings fundamental changes in the area of merger control, transparency of sector investigations and penalties for distortions of competition. The Office for the Protection of Competition (UOHS) will now be able to call for the notification of a merger that does not meet the turnover criteria if there is a suspicion of a significant distortion of competition. The merger must achieve a turnover of CZK 1.5 billion on the Czech market and at least two competitors must have a turnover of more than CZK 100 million. The request may be made within 6 months of the transaction, and after the delivery of the notice, the prohibition of continuing the implementation of the merger until the final permit is granted. The Office acquires the power to issue measures of a general nature for a period of up to 3 years, which may be extended if there is a persistent distortion of competition on the market. Offences of natural persons for distortion of competition with a fine of up to CZK 10 million and a ban on activity for 5 years are newly introduced. At the same time, the transparency of sector inquiries, including the publication of reports and the comment procedure, is strengthened. The amendment is accompanied by the introduction of a new Chief Economist’s Department within the Office for the Protection of Competition (UOHS), which will provide economic analyses and the investigation strategy. The Act enters into force on 1 July 2026.

[2/3] The amendment to the Act on the Protection of Competition brings fundamental changes in the area of merger regulation. The Office for the Protection of Competition (UOHS) is gaining new powers, including the possibility to require additional notification of concentrations if there is a suspicion of distortion of competition. The newly introduced ‘call in model’ allows the Office to invite competitors to submit a proposal for approval of a concentration within 6 months of its implementation. The merging competitors may not continue to implement the merger until the Office makes a decision. The law introduces new facts for misdemeanours, such as failure to file a proposal for merger authorisation at the request of the Office for the Protection of Competition, which is punishable by a fine of up to CZK 10 million or 10% of turnover. The Office may order the sale of a competitor or part of it if the merger distorts competition. Sector inquiries will be subject to mandatory public consultation, which is intended to increase the transparency and quality of the conclusions. The amendment also extends the leniency program to natural persons who have participated in cartel agreements and allows them to avoid criminal penalties for participation in a cartel. The law is set to come into force on 1 July 2026. Companies must be prepared for new obligations related to merger notification, compliance with deadlines and possible sanctions for violations of the rules. The changes bring higher costs for administration and legal services, but also the possibility of preventing distortions of competition and improving the market environment.

[3/3] This section focuses on competition regulation, competitors’ offences and the powers of the Office for the Protection of Competition (UOHS). Key changes include: 1) The Office may allow exceptions to the competition rules, whereby a decision must be issued within 30 days, otherwise the exemption is considered allowed. 2) The Office may impose measures to restore effective competition, including the obligation to sell part of the enterprise or cancel contracts. 3) New fines for competitors’ violations reach up to CZK 10,000,000 or 10% of turnover. 4) The Office may issue measures of a general nature for a period of up to 3 years, which determine the relevant markets and criteria for concentrations. 5) Introduction of the possibility of leniency for competitors who actively cooperate in the clarification of classified agreements, which may lead to the waiver of the fine or its reduction by up to 50%. 6) The Office keeps a public register of persons prohibited from performing public contracts. Practical impacts: Competitors must carefully monitor the deadlines for filing merger clearance applications (e.g. 30 days from the CNB’s decision becoming final) and ensure compliance with the obligations imposed by the Office. Violations can lead to hefty fines or bans. Companies should consider using leniency when suspected of participating in secret agreements. The Office also publishes annual reports and sector surveys, which increases market transparency.