OFFICE FOR THE PROTECTION OF COMPETITION OF THE CZECH REPUBLIC1 Judicial Review in Competition Cases...

OFFICE FOR THE PROTECTION OF COMPETITION OF THE CZECH REPUBLIC

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Judicial Review in Competition Cases in the Czech Republic

Robert Neruda

Director of the Chairman´s Cabinet


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Enforcement of Competition Law in the Czech Republic – an overview

EC Competition Law

Private enforcement Public enforcement

Before the courts by way of actions in civil proceedings

By the Competition Office ex officio

Individual claims arising from the breach of EC competition law

(damages etc.).

Fines, remedial measures

Judicial review in administrative judiciary


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Public (administrative) enforcement

• Office for the Protection of Competition– NCA responsible for enforcement of the EC competition law in

the Czech Republic • Administrative procedure

– Office is both „prosecutor“ and „judge“– two stages – any decision of the Office can be appealed to the

chairman of the Office• Procedural rules

– Regulation 1/2003– Competition Act (Act No. 143/2001 Coll.)– Administrative Code (Act No. 71/1967 Coll.)

• Burden of proof– Art. 81(1) and 82 EC Treaty – the Office– Art. 81(3) EC Treaty - parties


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Judicial review of the Office's decisions

• Performed within administrative justice (Act No. 150/2002 Coll.)• Complaint to the Regional Court in Brno (administrative branch)

– concentrated jurisdiction– bench of three judges– review from the facts and legal situation at the time of adoption of

appealed decision• but the court may produce evidence

– possible decisions• revocation of the Office's decision (if complaint justified)• dismissal of complaint (if not justified)• waiving or decreasing penalty imposed (if it was unreasonably large)

• Decision of Regional Court may be challenged by the cassation complaint lodged by unsuccessful party– cassation complaint is dealt with by the Supreme Administrative

Court– possible decisions - revocation of decision or dismissal of cassation

complaint


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System of public enforcement

Office

Chairman of the Office

Regional Court in Brno

Supreme Administrative Court

Constitutional Court

Parties

complaint

cassation complaintcassation complaint

constitutional complaint

appeal


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Private enforcement

• Petitions in civil proceeding (Act No. 99/1963 Coll.)• No specific rules on proceedings in competition issues• Private litigations dealt with by eight regional courts

– decentralised jurisdiction • competence according to the seat of defendant

– sole judge• Burden of proof

– Art. 81(1) and 82 EC Treaty – plaintiff– Art. 81(3) EC Treaty – defendant

• Court is bound by the competition office's decision that Art. 81(1) or 82 EC Treaty was breached and by whom

• If there is no such preceding decision court may:– decide the question on its own– initiate a proceeding before the competition authority and suspend its proceeding


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Bottlenecks and drawbacks of private enforcement in the Czech Republic

• Difficulties connected with damage claims– establishing casual nexus– calculation of actual damage– absence of incentives common in the U.S. system of private litigations,

e.g.• treble damages• one-way shifting of costs• class (joint) actions• contingency fees etc.

• Other risks– decentralised jurisdiction – no specific „competition court“– provisional ruling

• may be adopted even before commencement of litigation, but• duty to pay deposit (up to CZK 100.000)• duty to pay damages caused by unreasonable provisional ruling


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Judicial authorisation of inspections (dawn raids)

• Commission's and Office's inspections in non-business (private) premises in the Czech Republic– subject to prior consent of the court

• Regional Court in Brno (civil branch!)• Accelerated proceeding

– parties – Office (& Commission) and user of inspected premises– without hearing– resolution served at the beginning of on-site inspections– court cannot call in question lawfulness of decision to order

inspection and necessity for inspection


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Consequences of the violation of EC competition rules in the Czech

Republic

• In civil law– null and void action– injured person may ask for

• damages• recovery of unjust enrichment• declaration of nullity

• In public law– the Office may:

• impose fine up to CZK 10 million or 10 % of parties' net annual turnover• impose remedial measures (e.g. duty to change wording of contracts, duty

to continue with supplies)– the Office must:

• declare nullity• order discontinuation of unlawful actions


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Possible frictions between EC competition rules and Czech

procedural rules• No specific procedural rules ensuring the fulfilment of all

functions of the Commission as AMICUS CURIAE– could be dealt by the general provisions – but risk of inconsistency of the Commission's position before

the Czech courts• No major frictions as concerns the rules of parallel and

consecutive application of EC competition law by national courts and the Commission

• Specific procedure for judicial authorisation of inspections established– but without any time limits

• No specific system for forwarding judgements to the Commission

• However – the frictions are surmountable and do not hamper the application of EC competition law in civil litigations


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Discussion

OFFICE FOR THE PROTECTION OF COMPETITION OF THE CZECH REPUBLIC1 Judicial Review in Competition Cases...

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