CZECH REPUBLIC Trends and Developments Contributed by: Robert Neruda, Roman Světnický, Martin Rott and Robert Nersesjan, HAVEL & PARTNERS
Introduction For over two decades, the Czech merger con - trol regime has been considered as one of the more predictable and business-friendly systems in the EU. The framework, governed purely by turnover-based notification thresholds and a clear definition of concentrations, has provided a stable legal environment for domestic and international investors alike. However, the legislative calm has given way to a comprehensive reform of the Czech merger con - trol regime, which is now underway. The Czech Office for the Protection of Competition (CCA) proposes to revise its merger control regime. The revision may bring the most significant changes since 2001 and, if adopted, could align the Czech Republic’s enforcement tools more closely with those used in Germany and Austria, potentially even exceeding them in certain respects. The proposed changes are not occurring in a vacuum. They are a response to evolving eco - nomic realities, such as the rise of digital markets, complex investment structures, and the grow - ing importance of national security and strategic assets. At the same time, the CCA seeks to align its powers with emerging European trends and extend its oversight to cases that, while falling below traditional thresholds, may still pose com - petition or public interest concerns. As a result, merger control in the Czech Republic may no longer be reserved for the largest market play - ers. Companies of all sizes, including start-ups and investors, should begin preparing for a new era of scrutiny. Overview of the Amendment and Public Consultation In 2024, the CCA launched an extensive public consultation regarding the proposed amend - ment to the Act on the Protection of Competi -
tion and related legislation. The aim of the con - sultation was to gather feedback from experts, businesses, and stakeholders on the planned changes, which were designed to address cur - rent economic and legal challenges. The primary drivers behind the reform include the need to better respond to increasing market concentration, the growing complexity of trans - actions, and the alignment of Czech legislation with European trends, particularly drawing on practices from Germany and Austria. The reform focuses on expanding the CCA’s investigative and control powers, introducing new institutional tools, and strengthening the sanctioning frame - work. The consultation highlighted several frequently discussed points of the reform, including: • the introduction of a call-in mechanism allow - ing the CCA to retrospectively require notifi - cation and review of mergers that fall below current turnover thresholds but may impact the Czech market; • the proposed New Competition Tool (NCT) aimed at addressing long-term structural market issues without requiring prior proof of infringement; • the broadened definition of concentration to encompass not only traditional mergers and acquisitions but also new forms of co-oper - ation, including strategic alliances conferring significant influence; • the introduction of expanded personal liability for natural persons, extending sanctions to executives and other individuals involved in anti-competitive conduct; and • the enhancement of investigative powers, including the ability to impose obligations or restrictions on undertakings without prior notification, and tougher sanctions.
154 CHAMBERS.COM
Powered by FlippingBook