Undertaking in the free market is a competitive game
Undertaking in the free market is a competitive game. Sometimes companies may be tempted to avoid competition and to try to set their own rules of the game. Sometimes one big player makes an effort to force competitors out of the market. The Office for the Protection of Competition (hereinafter “the Office”) acts as a referee and ensures that all companies play according to the same rules. The Office may order nullification of agreements or procedures which constrain competition and it may also issue a fine on a company which has breached competition law.
The Competition Section at the Office includes the following Departments which interfere with practices restricting competition:
Dominance and vertical agreements
Two Departments of Dominance and Vertical Agreements exercise action and decision-making in case of agreements distorting competition (with the exception of horizontal agreements which are subject to investigation by the Cartel Department) and abuse of dominant position in the first instance proceedings, both pursuant to the Act on the Protection of Competition and Article 101 and 102 of the Treaty on the Functioning of the European Union (TFEU). Energy, i.e. production and supplies of electricity, gas and heat, is one of the pivotal branches on which the Department focuses when solving competition problems. The energy sector is one of the most important for business as well as for consumers and the Manufacturing Department monitors it systematically. Markets dealing with consumer goods, agriculture and groceries, health care services or pharmaceutics and water (supplies, disposal, including wastewater), telecommunications and media, the banking and insurance industry, transport, motor vehicles, fuel, postal services, publishing and printing, etc. are branches no less important for the Manufacturing and Services Department from the point of view of investigation and administrative proceedings. No less important is international co-operation, as well as efficient co-operation between the Manufacturing and Services Department and the sector regulators, particularly the Energy Regulatory Office (Energetický regulační úřad, ERÚ) and the Czech Telecommunication Office (Český telekomunikační úřad, ČTÚ).
The Cartel Department deals solely with the detection of horizontal agreements concluded among the mutual competitors in the market (cartel agreements), both pursuant to the Act on the Protection of Competition and Article 101 and 102 of the TFEU. In the framework of its action the Cartel Department effectively uses the Office’s Leniency programme which sets the framework for a more lenient regime in setting fines to the participants in the secret cartel agreements, who decide to co-operate with the Office in investigation. Further activity of the Cartel Department includes international co-operation, supervision of fulfilment of obligations stated in the Office’s decision, manufacturing of conceptual materials or suggestions to legislative proposals.
The Merger Department assesses the impact of concentrations between undertakings on competition and supervises the fulfilment of obligations and commitments stated in the Office’s decisions. At the same time the Merger Department monitors whether a certain concentration between undertakings is not implemented prior to the notification and prior to the legal force of a decision approving such concentration. The Merger Department may also grant exemptions from the prohibition of the mentioned implementation of concentration prior to approval. In accordance with Council Regulation (EC) No. 139/2004, on the control of concentrations between undertakings, the Merger Department assesses the need for a possible referral of authority to assess the impact of the concentration on competition between the Office and the European Commission. Furthermore, the Merger Department participates in advisory committees on mergers within the framework of which more important cases of concentrations between undertakings are dealt with by the European Commission and member states. To ease the orientation of potential merging undertakings in their obligation to notify the Office of the transaction between them, the Merger Department holds pre-notification consultations on the matter of submission of proposals for concentration approval and publishes conceptual materials about the given issues (Notice of the Office).
Chief Economist Department
The Chief Economist Department co-operates with the other departments at the Office in investigating the most demanding cases (cases including economic/econometric analyses) including abuse of dominant position, prohibited agreements and concentrations of undertakings. The Chief Economist Department also administers independent economic viewpoints on the cases investigated by the Office. The Chief Economist Department deals particularly with the issue of analytical approach to investigation, identification of appropriate economic methods/tests and required data and analytical processing of the data and the subsequent interpretation. Further activity of the Chief Economist Department includes preparation of methodical materials and presentations, formulation of the Office’s viewpoints for professionals and general public and international co-operation in solving the individual cases.