Czech Republic: Defining The Subject Matter Of Administrative Proceedings In Competition Cases - How Also Competition Law Can Be National

If you have ever come across competition law, you know that the competition rules are almost identical in the EU. In the area of cartel agreements, EU rules even prevent Member States from prohibiting agreements that EU law does not prohibit. The more significant differences were in procedural practices, which was also to change through the ECN+ Directive. Nevertheless, national competition rules may differ in many ways or evolve in completely opposite directions.

This summer, the Czech Republic and Slovakia were an example of such a contrary development in the definition of the administrative proceedings in competition cases. At first glance, it may seem that this is an uninteresting legal topic, but it is not. The question is when and in what quality the competition authority must say what it is accusing the undertaking of. How is the development in the Czech Republic and Slovakia opposite compared to the rest of the EU?

Let's start in the Czech Republic. In our recent blog post on the amendment to the Czech Competition Act, we discussed in detail that the Czech Office for the Protection of Competition (the "Office") was obliged to define the conduct of which a party to the proceedings is suspected in the notice of initiation of proceedings. The purpose of a sufficient definition of the conduct is not only to inform a party to the proceedings of what it has to defend against, but also of the extent to which it has an obligation to cooperate with the Office. However, the amendment to the Czech Competition Act already in force has abolished this obligation.

What does this mean in practice? A party to the proceedings will now become aware of the conduct of which it is suspected (i.e. the factual and legal qualification of the conduct) only in the statement of objections. However, the statement of objections is only sent (just) before the decision is issued, so at the end of the proceedings.

In practice, this means that in order to prepare effective defence, a party to the proceedings will now only have four weeks after having been notified of the "accusation". Such long is the usual time limit for replying to the statement of objections before the Office. The trend in the Czech Republic thus shifts the moment of informing about suspicions in favour of the Office to a later date and at the same time substantially limits the right of defence of the parties to the proceedings.

What about in Slovakia? There is no change in the legislation in this respect (yet). Recently, however, the Supreme Administrative Court (SAC) has published a judgement in a previous case imposing a fine for obstruction during an inspection by the Slovak Antimonopoly Office (AMO). In this case, the conclusions of the Regional Court in Bratislava (RCBA) on the issue of the presentation of the AMO's inspectors at inspections as "employees of an unspecified central state administration body" were already interesting. This was discussed by Tomáa on LinkedIN (only in Slovak).

What did the SAC say about the notice of initiation of administrative proceedings in its judgement (only in Slovak), or where did the SAC see the problem? At the beginning of the administrative proceedings, the AMO identified two conducts. However, in the course of the proceedings, the AMO refrained from punishing for one of the original two conducts and did not decide on it at all. The SAC confirmed that the AMO was obliged to decide on the entire subject matter of the proceedings as the AMO defined it in the initiation notice. The AMO's approach exposed the prosecuted undertaking to legal uncertainty that it could be sanctioned again for the conduct that the AMO had not decided on.

At the same time, the SAC set clear requirements for the quality of the notice of initiation of administrative proceedings. Already in the notice of initiation of administrative proceedings, the conduct must be specified in as much detail as the established facts allow. Specificity is expressly required, as a general specification would lead to a violation of the right of defence.

The different development in the Czech and Slovak Republics is thus evident - the Office will not have to describe the conduct at all in the notice of initiation of administrative proceedings, but the AMO will have to do so, and in a higher quality than before. At the moment, these are only theoretical requirements. The practice in both countries will show to what extent the competition authorities will follow the trends set out in the amendment to the Czech Competition Act or the case law of the SAC.