On 1 January 2010, criminal sanctions will be introduced for behaviour that leads to or facilitates the creation of a cartel, regardless of whether Czech or EU competition law applies.
The provisions in the new Criminal Code will make it a criminal offence to enter into an illegal price fixing agreement, market division agreement or any other agreement restricting competition with their competitor(s) and thereby cause damage (financial or otherwise) to other competitors or consumers or gain an illegitimate benefit for themselves or someone else.
This offence could be committed by managers, directors or employees of businesses involved in the cartel and will be punishable by:
- up to eight years' imprisonment (depending on the level of damage suffered by competitors and/or consumers)
- a ban on undertaking a specified activity
- forfeiture of goods or other property
The new offence will only apply to 'horizontal' agreements (between competitors) and, in particular, hard-core restrictive practices such as price fixing. However, it will not allow individuals to be punished for vertical agreements restricting competition, abuse of dominant position and breach of merger notification requirements.
There are also no provisions for cartel investigations to include cooperation between the police, procurators and the Antitrust Office. Consequently, individuals cannot receive any special treatment which might undermine the effectiveness of national or EU leniency programmes applying to their business.
The current Czech Criminal Code (dating from 1961) contains a provision making it a criminal offence for an individual to breach mandatory business rules but, even though it applies to competition laws, it has never been used to convict someone of a competition law breach. This explains why the Antitrust Office has lobbied so hard for the new provisions to be included.
Law: new Criminal Code, s. 248
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The original publication date for this article was 01/04/2009.