Policy Brief: Competition Law and Policy in the Czech Republic

Competition law and policy in the Czech Republic have converged on European practices. Since the OECD review of Czech competition policy in 2001, the country has joined the European Union, while the Czech Competition Act has been revised and now closely follows the substantive terms and enforcement methods of the European Commission. The Czech competition agency, ÚOHS, has evolved through a change in leadership and a shift in its enforcement approach. For most issues, ÚOHS is willing to advise businesses as to how they can comply with the law and to work with them to resolve problems through measures other than formal enforcement action.

Competition policy attention has concentrated on problems in network and service sectors. Results have been mixed. ÚOHS has moved vigorously against abuses in telecoms, taking advantage of its new power to apply the EC Treaty when this sector was excluded from the Czech Competition Act (from 2005 to 2007). In electric power and natural gas, decisions about privatisation led to the re-creation of integrated national-scale firms. Problems about access to storage are slowing the development of competition in the natural gas sector.

Enforcement against hard-core price fixing has been limited, but it has stepped up recently. A major case in 2007 was an important opportunity to show how clandestine international cartels operate and how leniency can be used to uncover them. The new leniency program adopted in 2007 should be a more effective tool against hard-core cartel agreements. Enforcement could be strengthened further by providing for stronger sanctions against individuals who are involved in cartel behaviour and against associations that are the vehicle for reaching prohibited agreements.