From The Czech Woods And Fields... (Overview Of Competition Events For May 2023)

• Published date: 26 July 2023
• Subject Matter: Antitrust/Competition Law, Antitrust, EU Competition , Cartels, Monopolies
• Law Firm: Havel & Partners s.r.o.
• Author: Mr Robert Neruda and Petra Joanna Pipkov'

We present to you the thirty-ninth instalment of the information service regarding events that occurred in the world of competition law in April 2023. Regular readers know that this is necessarily a purely subjective selection, and one simply cannot expect complete objectivity from it.

The Czech competition authority was extremely active in May, which is why the May blog post is mainly devoted to competition events from the Czech woods and fields. However, in the regular procedural corner, we also focus on various competition procedural aspects of the business of one of the BigTech companies.

Cartels and other prohibited agreements

In our April article, we already dealt with the Czech competition authority's campaign against anti-competitive decisions of associations of undertakings. In May, the Czech competition authority continued its campaign.

First, it fined the association of wholesale distributors of medicines, AVEL, for conduct in connection with payments for recalls of medicines. Such recalls may occur, for example, because of adverse drug effects or because of the imminent expiry or the termination of sales in the Czech Republic. Such cases are called mandated (or actual) recalls. In addition, mock recalls also occur. Until the fateful AVEL member's meeting, the recalls were paid for by the wholesale distributors. At that time, however, EU legislation was adopted introducing a safeguard to prevent counterfeiting of medicines (the so-called unique identifier). According to the Czech competition authority, distributors feared that this would increase the error rate and lead to more frequent recalls. It was decided at the association's meeting that distributors would charge manufacturers/importers a flat fee for mock recalls and, in the case of mandated recalls, an amount based on one pack of the medicine. The Czech competition authority considered this to be an anti-competitive decision by an association of undertakings. Since there was no increase in the number of recalls and the decision was therefore not put into practice, the Czech competition authority assessed the conduct as a one-off of one day's duration. Moreover, AVEL settled with the Czech competition authority and adopted an effective competition compliance programme. The resulting fine was therefore only CZK 696,000.

Another conduct of an association of undertakings under scrutiny concerned the price declarations of the Czech-Moravian Association of Microbreweries. This case - as well as the case of the beekeepers - was resolved within the framework of competition advocacy. It was essentially the same situation, where the representatives of the association informed through the media about the rising costs of production and, as a consequence, about the planned increase in beer prices (e.g. here). The Czech competition authority, as part of the competition advocacy, instructed the representatives of the association about the competition risks, and also drew attention to potentially risky provisions in the code of conduct and communication of the association in this sense. The wording of the association's code has been amended and the association has taken further corrective measures in the area of communication. Thus, the Czech competition authority saw no need to initiate formal...