Competition law

In their business activities, multinational companies must pay particular attention to avoiding conflicts with competition law, especially the EU legislation, Act No. 143/2001 Sb., on the protection of competition, and Act No. 89/2012 Sb., Civil Code. In particular, mergers between companies or agreements with other entities pose a risk of infringement because these actions may constitute an act of unfair competition or anti-competitive conduct. Unlawful distortion of competition means the exclusion, restriction or other distortion or imperilment of competition, which may take the form of anticompetitive agreements, abuse of a dominant position of competitors or certain concentrations of competitors.

Anticompetitive agreements

Anticompetitive agreements, often referred to as cartels, are entered into by competitors to restrict competition, divide and control the market and avoid the risks and uncertainties of natural competition. Since cartels fundamentally distort the economic environment and reduce consumer welfare, the Office for the Protection of Competition may punish their participants by imposing a penalty of up to CZK 10 million or up to 10% of the net turnover achieved by the competitor for the last completed financial year or by prohibiting the performance of public contracts for up to three years.

Abuse of a dominant position of competitors

A competitor has a dominant position if its market power enables it to act to a significant extent independently of its competitors and customers. Such a competitor may use a number of unlawful practices, such as excessive prices (exploitation practices), exclusive agreements (exclusionary practices) or predator prices, i.e. prices below the average cost to eliminate competition.

Unlawful concentrations of competitors

Mergers and acquisitions of companies are quite common in competition – bigger players buy smaller ones to gain an even more influential position in the market. But since a merger or an acquisition may result in a distortion of competition as the merging companies gain a dominant position in the market, the largest concentrations are subject to the assessment and approval by the Office for the Protection of Competition. Where the proposed concentration may result in a distortion of competition, the merging entities may make commitments to eliminate the distortion of competition – only then is the merger approved.

Unfair competition

Unfair competition is most often represented by violation of trade secrets, misleading marking of goods and services, free-riding on the reputation of an undertaking, product or services, use of unauthorised comparative advertising, etc. Unlike large and multinational companies, it often affects smaller entrepreneurs as well. In such a case, the injured party may claim, in particular, restoration to the original state, compensation for damages or provision of proceedings.

Our law firm provides clients with comprehensive legal advice on avoiding conflicts with the law.

We also provide clients with legal support in the event of a distortion or a possible distortion of competition.

What issues do we typically deal with in competition law?

• Is it appropriate to enter into an agreement with another entity?
• Is the acquisition or merger of specific entities possible?
• How to deal with unfair competition?
• Vertical agreements between competitors
• Horizontal agreements between competitors (cartels)
• Joint ventures
• Dominant market position of competitors
• Concentrations of competitors (mergers)
• Public aid
• Market power
• Assessment of the client’s intention to form a joint venture
• Analysing the possibility of concentration with another competitor
• Advice on market dominance
• Assessment of the possibility of granting or receiving public aid
• Advising clients on significant market power
• Representing clients before competition authorities and courts
• Legal representation of injured parties in civil proceedings for the recovery of claims arisings from competition infringements