OFFICE FOR THE PROTECTION OF COMPETITION OF THE CZECH REPUBLIC1 Judicial Review in Competition Cases in the Czech Republic Robert Neruda Director of the Chairman´s Cabinet

OFFICE FOR THE PROTECTION OF COMPETITION OF THE CZECH REPUBLIC2 Enforcement of Competition Law in the Czech Republic – an overview EC Competition Law Private enforcement Before the courts by way of actions in civil proceedings Individual claims arising from the breach of EC competition law (damages etc.). Public enforcement By the Competition Office ex officio Fines, remedial measures Judicial review in administrative judiciary

OFFICE FOR THE PROTECTION OF COMPETITION OF THE CZECH REPUBLIC3 Public (administrative) enforcement Office for the Protection of Competition –NCA responsible for enforcement of the EC competition law in the Czech Republic Administrative procedure –Office is both „prosecutor“ and „judge“ –two stages – any decision of the Office can be appealed to the chairman of the Office Procedural rules –Regulation 1/2003 –Competition Act (Act No. 143/2001 Coll.) –Administrative Code (Act No. 71/1967 Coll.) Burden of proof –Art. 81(1) and 82 EC Treaty – the Office –Art. 81(3) EC Treaty - parties

OFFICE FOR THE PROTECTION OF COMPETITION OF THE CZECH REPUBLIC4 Judicial review of the Office's decisions Performed within administrative justice (Act No. 150/2002 Coll.) Complaint to the Regional Court in Brno (administrative branch) –concentrated jurisdiction –bench of three judges –review from the facts and legal situation at the time of adoption of appealed decision but the court may produce evidence –possible decisions revocation of the Office's decision (if complaint justified) dismissal of complaint (if not justified) waiving or decreasing penalty imposed (if it was unreasonably large) Decision of Regional Court may be challenged by the cassation complaint lodged by unsuccessful party –cassation complaint is dealt with by the Supreme Administrative Court –possible decisions - revocation of decision or dismissal of cassation complaint

OFFICE FOR THE PROTECTION OF COMPETITION OF THE CZECH REPUBLIC5 System of public enforcement Office Chairman of the Office Regional Court in Brno Supreme Administrative Court Constitutional Court complaint cassation complaint constitutional complaint appeal

OFFICE FOR THE PROTECTION OF COMPETITION OF THE CZECH REPUBLIC6 Private enforcement Petitions in civil proceeding (Act No. 99/1963 Coll.) No specific rules on proceedings in competition issues Private litigations dealt with by eight regional courts –decentralised jurisdiction competence according to the seat of defendant –sole judge Burden of proof –Art. 81(1) and 82 EC Treaty – plaintiff –Art. 81(3) EC Treaty – defendant Court is bound by the competition office's decision that Art. 81(1) or 82 EC Treaty was breached and by whom If there is no such preceding decision court may: –decide the question on its own –initiate a proceeding before the competition authority and suspend its proceeding

OFFICE FOR THE PROTECTION OF COMPETITION OF THE CZECH REPUBLIC7 Bottlenecks and drawbacks of private enforcement in the Czech Republic Difficulties connected with damage claims –establishing casual nexus –calculation of actual damage –absence of incentives common in the U.S. system of private litigations, e.g. treble damages one-way shifting of costs class (joint) actions contingency fees etc. Other risks –decentralised jurisdiction – no specific „competition court“ –provisional ruling may be adopted even before commencement of litigation, but duty to pay deposit (up to CZK ) duty to pay damages caused by unreasonable provisional ruling

OFFICE FOR THE PROTECTION OF COMPETITION OF THE CZECH REPUBLIC8 Judicial authorisation of inspections (dawn raids) Commission's and Office's inspections in non- business (private) premises in the Czech Republic –subject to prior consent of the court Regional Court in Brno (civil branch!) Accelerated proceeding –parties – Office (& Commission) and user of inspected premises –without hearing –resolution served at the beginning of on-site inspections –court cannot call in question lawfulness of decision to order inspection and necessity for inspection

OFFICE FOR THE PROTECTION OF COMPETITION OF THE CZECH REPUBLIC9 Consequences of the violation of EC competition rules in the Czech Republic In civil law –null and void action –injured person may ask for damages recovery of unjust enrichment declaration of nullity In public law –the Office may: impose fine up to CZK 10 million or 10 % of parties' net annual turnover impose remedial measures (e.g. duty to change wording of contracts, duty to continue with supplies) –the Office must: declare nullity order discontinuation of unlawful actions

OFFICE FOR THE PROTECTION OF COMPETITION OF THE CZECH REPUBLIC10 Possible frictions between EC competition rules and Czech procedural rules No specific procedural rules ensuring the fulfilment of all functions of the Commission as AMICUS CURIAE –could be dealt by the general provisions –but risk of inconsistency of the Commission's position before the Czech courts No major frictions as concerns the rules of parallel and consecutive application of EC competition law by national courts and the Commission Specific procedure for judicial authorisation of inspections established –but without any time limits No specific system for forwarding judgements to the Commission However – the frictions are surmountable and do not hamper the application of EC competition law in civil litigations

OFFICE FOR THE PROTECTION OF COMPETITION OF THE CZECH REPUBLIC11 Discussion