History of the Office
Establishment of the Office
The Czech National Council established the Czech Office for Competition by the Act No 173/1991 Coll. of April 26, 1991; the Office started its activity on July 1, 1991. In order to declare independence of the decision-making process, Brno became the Office’s headquarters, although Prague is usual seat of all administrative bodies. In 1992 the Office was replaced by the Ministry of Competition. This change was justified by the economic transformation then in progress, but above all by the role the Ministry played in the privatization process.
At present the protection of competition in the Czech Republic is institutionally ensured by the Office for the Protection of Competition which has its seat in Brno. The Office started its activity with this name on November 1, 1996 while continuing in the activity of the former Ministry. The scope of competencies of the Office is defined by the Act No 273/1996 Coll., as amended by the Act No 187/1999 Coll. The Office should create conditions for support and protection of competition and supervise public procurement and state aid. The Office was entitled to decide about compatibility of provided state aid with European Community law in the years 2002 – 2004. On May 1, 2004 this competence was fully transferred to the European Commission. The Office remained an advisory, monitoring and consulting body in the area of state aid.
The Office is a central administrative body entirely independent in its decision-making practice. The Office is headed by a Chairman appointed by the President of the Czech Republic on the proposal of the Government. The term of office of the Chairman is 6 years and nobody can be appointed for more than two successive periods. The Chairman of the Office must not be a member of any political party or political movement. Current Chairman Petr Mlsna came to the Office in December 2020.
The Office is divided into 5 sections. The first vice-chairman Hynek Brom heads the Competition Section. The Section of Public Procurement is headed by the vice-chair Eva Kubišová. At the head of the Section of Legislation and Public Regulation is vice-chairman Petr Solský. Section of External Relations and Administration of the Office is headed by Daniel Stankov. Last section consists of two departmens for 2nd Instance Decision-Making in competition and public procurement.
The total number of employees is currently about 230. Majority of the employees are lawyers and economists.
One significant priority of the Office is to ensure transparency of the decision-making practice of the Office. One step in this direction is the publication of all final decisions in the Collections of Decisions and on the Office website (www.uohs.cz). Furthermore, the Office holds seminars and conferences, issues press releases and information bulletins, etc.
Development of Competition Law
Antitrust law in the territory of Czech countries was mentioned for the first time in Article 4 of the Austrian Cartel Act No 43 of 1870, according to which agreements between tradesmen which were concluded with the aim to increase prices of goods to the detriment of consumers were not effective. After the creation of the Czechoslovak Republic the first systematic law against restriction of competition was enacted in 1933. This was done by the Act No 141/1933 Coll., on cartels and private monopolies. Contrary to the current conception, in accordance with the then dominant European conception the Act stemmed from the admissibility to enter cartel agreements and solely reprobated their abuse. Although the Act was not explicitly repealed in the post-war era, in the first two years after the end of World War II it was impossible to implement it and the socio-economic system introduced in the Czechoslovak Republic after February 1948 practically nullified it. The possibility of abuse of dominant position by economic entities in deliberately monopolistically organized economy and the need for regulation acting against this possibility ceased to exist. Instead of market and competition an institute of cooperation among socialistic organization as an adequate stimulant was established, emphasising advantages of planned national economy.
Reform efforts in the years 1968 – 1969 again drew attention to the issues of market and competition. Regulations then published to improve the system of planned national economy (the Government Regulation No 100/1966 Coll. and particularly its amendment No 169/1969 Coll.) contained quite comprehensive amendment of three general clauses, i.e. generally formulated basic regulations together with examples of reprobated and most frequent activities restricting competition, or anti-competitive activities. However, the amendment to the Economic Code of 1970 contained only regulation which prevented organizations from abuse of their economic position (monopoly position) towards other organizations and was in accordance with the former conception of market and competition negation placed under the heading “cooperation among socialistic organizations”. Although the Act was modified in the following years, it practically remained unused with one exception until its final repeal.
Legislative approach in the Czech Republic was in this period driven by two essential factors – on the one hand by relieving of excessive state directing characteristic for communist regimes in this area, on the other hand by not leaving the creation of competitive environment fully directed by business subjects and ensuring regulation in sectors with natural monopoly. This resulted in the Act on Competition which was drafted and enacted in 1991 and which was after two amendments in the years 1992 and 1993 replaced on July 1, 2001 by the Act No 143/2001 Coll., on the Protection of Competition, which has been amended several times since then.
The concept of new Czechoslovak legislation for the protection of competition resulted from the specifics given by tradition and needs for development of economy in those times. At the same time comparability with legal regulations in the EU member states was observed. Legal regulation of the protection of competition thus stems from competition law of the European Union, in particular from Article 101 and subsequent of the Treaty on the Functioning of the Europen Union.