CZECH REPUBLIC Law and Practice Contributed by: Robert Neruda, Roman Světnický, Martin Rott and Robert Nersesjan, HAVEL & PARTNERS
2. Jurisdiction 2.1 Notification
2.2 Failure to Notify The OPC may impose a fine of up to 10% of net turnover achieved by the undertakings in the preceding accounting period for the failure to notify a concentration meeting the notification criteria set by the CCA. The fine calculation fol - lows the OPC’s fining guidelines. There has been an increasing number of deci - sions imposing fines for failing to notify a trans - action under the Czech merger control regime. Most recently, the OPC imposed a fine of CZK18.8 million (approximately EUR752,000) on EP ENERGY TRADING for failing to notify acqui - sition of a company active in the retail supply of electricity and natural gas. The OPC publishes its decisions on its website, including informa - Generally, the following types of transactions are subject to merger control in the Czech Republic. • Mergers – two or more previously independ - ent undertakings merging into one undertak - ing. • Acquisitions of control – one or more persons who already control at least one undertaking, or one or more undertakings, acquire direct or indirect control of the entirety or parts of one or more other undertakings (assets and/or shares deals). • Joint ventures – a joint venture that will per - form all the functions of an independent busi - ness entity on a lasting basis is established. Regardless of its form, there must be a change in the nature of control of an undertaking in order for a transaction to be considered a concentra - tion within the meaning of the CCA. It is irrel - evant whether the change in control is brought tion on the amount of the fine. 2.3 Types of Transactions
Transactions constituting a concentration within the meaning of the CCA must be notified to the OPC. There are no exemptions from the obliga - tion to notify, but a concentration must fulfil the following two general conditions to be notifiable. • The concentration must be long-lasting. Accordingly, a temporary change of control that cannot result in permanent or long- lasting changes in the structure of the market is exempt from the merger control scrutiny. A period of five years is usually considered as long-lasting, but a case-by-case assessment is necessary to provide a clear answer. • While the acquisition of control is generally subject to a notification obligation, the CCA provides two exemptions in regard to special industries and types of transactions: (a) control over an undertaking acquired by a bank as a result of the payment of the issue price of the shares by way of a set-off of the bank’s receivables from such legal entity, provided this owner - ship interest is possessed during a rescue operation or financial restructuring of the controlled undertaking; or (b) a provider of investment services acquires control by way of an acquisition of shares of an undertaking, provided the shares are acquired for the purpose of their subsequent sale and the related voting rights are not exercised for the purpose of determining or influencing the market behaviour of the controlled undertaking. There is no possibility to file voluntarily if thresh - olds are not exceeded: the scope of merger con - trol is limited solely to the compulsory filings.
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