EU ANTITRUST: HOT TOPICS & NEXT STEPS

Prague, Czechia

EU ANTITRUST: HOT TOPICS & NEXT STEPS 2022

Are the Fines Imposed to Cartel Participants in the Czech Republic Optimal? Tereza Vaňkátová University of Economics Faculty of International Relations, Department of International and European Economic Law náměstí Winstona Churchilla 1938/4, Prague, 130 67 Czechia e-mail: ternovakova@seznam.cz

Abstract The Office for the protection of competition of the Czech Republic issued new guidelines for imposition of fines for cartels in 2018. Since the fines imposed on the participants of cartel agreements before 2018 were set significantly below the efficient level, the new notice enables the Office to increase the fines for the most serious anticompetitive conduct. The aim of this paper is to find out if the fines imposed after the new notice was issued are finally set at the efficient level from the perspective of their preventive function. It means whether or not the fines imposed are sufficient to deter competitors from concluding anticompetitive agreement. 1. Introduction The Office for the Protection of Competition of the Czech Republic (Office) declared that since 2015 the necessity to significantly increase fines imposed for anticompetitive behaviour. Especially, this includes competitors who participated in a so-called ‘hard-core cartel’ which is meant to be the most serious anticompetitive practice. For this purpose, in 2018, the Office issued new Sentencing Guidelines which enable the Office to impose higher fines for anticompetitive conduct than the fines imposed according to the Sentencing Guidelines from 2006. Analyses of the fines imposed on competitors who participated in hard-core cartels between 2009–2016 in the Czech Republic established that the fines were imposed at the significantly sub-optimal level (Nováková, 2017, p. 57). Those fines were not only unable to create a deterrent effect considering the low probability of detection, but they were not even capable of taking away the profits made by the members of the cartel. In case of bid rigging, the analyses found out that the fines did not sufficiently take into account the harmfulness Keywords: fines, hard-core cartels, deterrence JEL Classification: K210, K420 JEL code.

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