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The fight against cartels will be stronger in the Czech Republic

In present it is possible to punish only companies for cartel’ agreement, their managers are not threaten by sanction. If a new law in Czech Republic is approved by the parliament unchanged, the managers can be threaten by 3-year prison and prohibition of activity for an active presence in anticompetitive acting.

The new punishments would concern only so called horizontal cartels, thus, the agreements of pricing or dividing of market among direct competitors. According to ÚOHS (Czech authority for competition policy) the horizontal cartels are the most dangerous way of restriction of competition and they lead to the increase in prices for final consumers and to the deterioration of choice of good’s quality.

The abuse of dominant position, not allowed connection of companies and even anticompetitive agreements among suppliers and purchasers will be not threaten by prison.

The chief of ÚOHS thinks; that the new punishments for managers will not have a negative effect on a Czech business. The new punishments are focusing only on the hardest and intentional cases of disruption the competition.

So the Czech managers would not be threaten by the punishments for unintentional mistakes or not so huge offences against competitive rules. The punishment for anticompetitive acting is quite common in the European Union. Germany, France, Great Britain, Estonia, Romania or Slovakia have it in their law too.

In the USA there was also a tightening in the punishments for cartels three years ago. The managers, who are directly participate on a cartel’ agreement, can spend in the prison even ten years.

The uncovered cartels were punished mostly with fines in the Czech Republic until now. Last year ÚOHS fined for example bakery companies Delta, Odkolek and Penam, which arranged the prices of bakery products. The most important case until now; was the cartel of sixteen international industrial companies. This cartel was fined with the 942 million crowns (cca 36,2 million €). The ÚOHS uncovered this illegal agreement due to the cooperation with the ABB company, which participated in the cartel. It was under the leniency programme, ABB confessed the participating in cartel and presented evidences about illegal agreements. Because of this, ABB avoided to the fine.

In my opinion this process is really appropriate because the number of cases of companies connecting together is still high and it is necessary to investigate every connection in order not to harm the consumers by distorting how the market operates.

Petra Handlířová

References:

http://byznys.lidovky.cz/boj-proti-kartelum-pritvrdi-d1y-/moje-penize.aspx?c=A070830_085948_ln_ekonomika_vvr

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Author: studentnovasbe

Master student in Nova Sbe

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