• Arts
  • Language Services
  • Furniture
  • Educational Services
  • Private Equity
  • Event Management
  • Nonprofit / Foundation
  • Manufacturing
  • Information Technology
  • Human Resources
  • Hotels and Restaurants
  • Health Care & Pharmaceuticals
  • Media - Broadcast and Publishing
  • Engineering / Construction
  • Food Products, Beverages and Tobacco
  • Petroleum Industry
  • Wholesale and Retail Trade
  • Travel and Leisure
  • Transporting, Moving and Warehousing
  • Telecommunications
  • Security Services
  • Real Estate
  • Marketing and Public Relations
  • Energy
  • Finance
  • Consumer Goods
  • Law Companies
  • Consultancy
  • Architecture
  • Airlines

News

Antimonopoly Office imposes more fines for obstructing its inspections

1.12.2022
Company: EY

The Czech Office for the Protection of Competition has imposed a fine of almost the maximum possible amount (in this particular case) of CZK 22.5 million on an electronics distributor. The Office has already applied a similarly strict fining procedure in recent months against other competitors in at least three other proceedings for obstruction of its local inspections. The Office thus continues its trend of imposing fines at the upper end of the statutory limit. If a competitor breaches its obligation to cooperate with the Office, it can be fined up to 1% of its turnover under the Competition Act, and repeatedly up to 10% of its turnover.

In deciding on the amount of the fine, the Office took into account in particular the fact that the obstructive conduct of the company consisted of a conscious and purposeful effort by the managing directors and shareholders to prevent the Office from investigating suspected anti-competitive conduct in the distribution and sale of electronics. One of the executives refused to hand over and make available his mobile phone, while the other handed over his phone and laptop only after having previously deleted or changed the contents of the device. The content of one employee's work email account was covertly deleted and backups of the company's employees' work email accounts were not made available to them even when requested by the Office's inspectors.

The decision in question is not yet final and the company may appeal against it.

Local investigations, or dawn raids, are a key tool in uncovering prohibited agreements and other anti-competitive behaviour. On the other hand, they constitute a significant interference with the rights and privacy of competitors. In this context, we recall the proportionality test (the question of legality, legitimate aim and appropriateness) described in the case law. The competition authority should only proceed with a local investigation if it pursues a legitimate aim - the effective protection of competition - and its action is proportionate to that aim; in principle, there must be a proportionate relationship between the scope of the suspicion and the scope of the investigation.

In order to reduce the risk of the Office imposing a fine, it is advisable, as part of the internal compliance system on competition rules, to inform statutory bodies and senior staff on how to deal with such unannounced inspections.

If you have any questions, please contact the authors of this article or the EY team with whom you work.

Authors:

Vladimír Petráček

Eliška Mandíková

 

Tags: Finance |

AmCham Corporate Patrons

x
x

Delete

Are you sure? Do you really want to delete this item?