Antitrust Litigation 2021

Last Updated September 16, 2021

Czech Republic

Law and Practice

Authors



Clifford Chance is uniquely placed to combine its strengths in the area of antitrust with its dispute resolution expertise. The firm prides itself on being as close as possible to the commercial and transactional aspects of the work, which enables it to focus on providing the most important dispute-related advice – which is how to avoid litigation/arbitration in the first place. If it can no longer be avoided, the team's experience and close co-operation with colleagues from other practice areas such as antitrust allows it to deliver high-quality legal service both from a procedural and substantive perspective. This strategic approach focusing on high added-value advice enables the firm to participate on the highest-value disputes, such as representing Seznam in relation to the Google Android case in which Google was sanctioned with a historically high fine.

There has been a very considerable shift in the status of antitrust litigation in the Czech Republic in recent years. Before 2017, the term "antitrust litigation" was mainly associated with the review of the decisions of the Czech Office for the Protection of Competition (the Czech Competition Office) by the administrative courts. Damages claims were rare until then, due to the difficult position of the claimants.

On 1 September 2017, Czech Act No 262/2017 Coll., on Competition Damages, as amended (the Competition Damages Act), was adopted, which now serves as the legal basis for a claim for damages for breach of competition law. It was adopted on the basis of Directive 2014/104/EU of the European Parliament and of the Council of 26 November 2014. Given the time of its adoption, this area of law is still fairly novel, without much case law from the Czech courts available.

There are, however, several cases pending at various stages. Some of the most recent ones have been enabled by the current activity of the European Commission focused on the tech sector, most notably in relation to the Google cases.

The Bill on Collective Proceedings has been drafted and is now waiting for approval by the Czech Parliament. The currently available version had been expected to come into effect in 2022, but it is not certain whether the Bill will be passed at all, given also the Parliamentary elections later this year.

Generally, under Czech law there are three basic requirements that need to be met in order to succeed with any damages claim: there needs to be an illegal act, there needs to be a loss (damage) and there needs to be a causal link between the two. All these requirements are set by Act No 89/2012 Coll., the Civil Code, as amended (the Civil Code), and serve as the general basis for all claims for damages for breach of competition law.

Moreover, in the antitrust area, the Competition Damages Act provides additional rules applicable to claims for damages for breach of competition law. It is mainly relevant for follow-on claims, as it provides that if there is a decision of a relevant authority confirming a competition law infringement, the relevant court deciding about the damages is bound by that decision. This means that the claimant does not have to prove that competition law was infringed. Therefore, the first requirement that there needs to be an illegal act is already settled and the court is bound by that.

Standalone claims are also available, and were available even before the adoption of the Competition Damages Act. However, in a standalone claim, the claimant must prove the breach of competition law at a general court (likely without any specific competition law expertise), which may be very difficult. Standalone claims are basically non-existent in the Czech Republic.

The Czech Republic has a two-instance court system that is made up of four branches. These organisational branches consist of the following courts:

  • District Courts;
  • Regional Courts (eight in the Czech Republic);
  • High Courts (two in the Czech Republic); and
  • the Supreme Court (deciding on civil and criminal matters) and the Supreme Administrative Court (deciding on administrative matters).

Separately, there is a constitutional court that oversees the decisions of the above-mentioned courts from the constitutional law perspective.

Given the two-instance nature of the court system, judgments of a first-instance court may generally be appealed (and usually are) at a second-instance court, which is the next higher court. The appellate courts have various options of how to decide on the appeal – ie, they may either affirm, reverse or cancel the decision of a lower court and remand it for further proceedings. This usually substantially affects the length of the proceedings. In terms of antitrust litigation, the courts may also cancel decisions of the competition authority. All these options often lead to lengthy proceedings.

Generally, the Czech courts do not specialise and, therefore, there are no specialist competition courts or competition law judges that would decide on claims for damages for breach of competition law. However, pursuant to the Competition Damages Act, the Regional Courts (which are generally the courts of second instance deciding on an appeal) are competent to decide on the proceedings relating to private damages claims arising from competition law breaches in the first instance. Therefore, if an appeal against such decision is lodged, the appeal would be decided by one of the High Courts (either in Prague or in Olomouc, depending on the local jurisdiction).

Local jurisdiction is determined pursuant to the general provisions on jurisdiction set out in Act No 99/1963 Coll., the Civil Procedure Code, as amended (the Civil Procedure Code), which also governs the procedure for transferring cases between different courts on the basis of the local and subject matter jurisdiction of courts (for example, following a successful objection on lack of jurisdiction of the court where the claim was raised).

Pursuant to Section 27 of the Competition Damages Act, the court is bound by a decision of another court, the Czech Competition Office and the European Commission on the fact that a restriction of competition has occurred and who has committed it. The national courts thus need to consider the infringement of competition law found in the final administrative or judicial decision as irrefutably established for the purposes of an action for damages.

Where a decision on an infringement of competition law forming the basis of a claim for damages has been given by a national competition agency (NCA) of another EU member state, it is presumed that competition was restricted by the person identified in such decision, unless the contrary is proven.

NCAs may intervene in damages actions on the basis of the concept of "intervener" under the provisions of the Civil Procedure Code, which provides that anyone who has a legal interest in the outcome of the proceedings may participate as an intervener alongside the claimant or defendant.

Generally, each party is obliged to provide the court with relevant statements and support the statements by evidence. However, the burden of proof is more strict on the part of the claimant, since the claim will be dismissed if the claimant does not manage to support its statements with evidence, regardless of the procedural activity of the defendant. The relevant standard of proof for competition law damages claims in the Czech Republic is the ordinary civil standard (ie, on the balance of probabilities).

In relation to follow-on damages claims, claimants do not need to prove that competition law was breached once this has been established by another court, the Czech Competition Office or the European Commission. However, the claimant still needs to prove that it suffered damage in a specific amount and the causal link between the damage and the breach of the competition law.

Furthermore, the Competition Damages Act establishes a rebuttable legal presumption according to which it is presumed that the restriction of competition in the form of a cartel causes damage. The burden of proof on the question of the occurrence of damage is thus shifted to the defendant in cartel cases.

The pass-on defence is available in the Competition Damages Act but needs to be proven by the defendant on the basis of the general provisions on the burden of proof. Under the Civil Procedure Code, the court decides on the basis of the established facts and the court evaluates the evidence at its discretion, analysing each piece of evidence individually and all the evidence in its mutual context.

Claims can be brought by both direct and indirect purchasers. The Competition Damages Act enables the indirect purchasers to claim that the damage has been passed on to them.

The price increase shall be presumed to have been passed on, in whole or in part, to the claimant if the claimant proves that there was a restriction of competition by the defendant, that the restriction of competition by the defendant led to an increase in the price for the defendant's direct purchaser, and that the claimant purchased goods or services affected by the restriction of competition from that direct purchaser or another downstream purchaser. This does not apply if the defendant proves that the transfer of the price increase has not been passed on.

Typically, a follow-on claim will be issued after the relevant decision on restriction of competition becomes final and unappealable (which will usually be several years after the restriction of the competition took place, as there are several options to appeal against the decision, both in the Czech Republic and on the European level). The trial commences by filing the claim with the relevant court, with the timing of the filing of the claim being fully in the hands of the claimant. The trial will typically take several years and the timing will largely depend on the complexity of the case and the procedural activity of the parties. Therefore, different cases may vary significantly in duration. It also needs to be taken into account that the proceedings may take several additional years if an appeal is lodged.

There is no possibility to expedite the proceedings relating to claims for damages for breach of competition law, but it is possible for the court to decide on the claim in parts (by handing down an interim judgment). This may be very helpful in complex cases where the court has the option to decide on liability in the first stage (or on the fact that damage has been caused and that there is a causal link between the damage and the illegal action) and then to decide on the remaining issues (for example, on the amount of compensation) in the second stage.

The courts may interrupt the proceedings when a parallel investigation is conducted by an NCA/the European Commission (but are not required by law to do so), either upon request by a party or on their own. It is, however, likely that the courts will be tempted to do so, especially given the binding effect of the decisions of the Czech Competition Office or the European Commission. If the court decides on a damages claim in contradiction of a future decision of the Czech Competition Office or the European Commission, such contradiction would constitute grounds for challenging such court decision. The courts will thus most likely wait until the decision of the NCA/European Commission is final.

At the moment, there is no legal framework for class/collective actions under Czech law. The Bill on Collective Proceedings has been drafted and is waiting for approval by the Parliament. The available version was initially expected to become effective in 2022, but it is not certain whether the Bill will be passed at all.

Certain limited procedural aspects similar to class actions can be found in Act No 634/1992 Coll., the Consumer Protection Act, as amended, with regard to consumer protection.

As there is currently no legal framework applicable to class/collective actions, there are no applicable rules as to who can bring a class action or other procedural questions.

As there is currently no legal framework applicable to class/collective actions, there are no applicable rules relating to judicial oversight/involvement in the settlement of collective actions.

No strikeout or summary judgment is available under Czech law.

Czech law only recognises partial and interim judgments. In the case of a partial judgment, the court only decides on part of the subject matter of the proceedings or only on one of the parties to the proceedings. This is useful in those cases where a certain part of the subject matter is no longer in dispute and, therefore, its earlier enforceability is possible.

In the case of an interim judgment, the court only decides on the merits of the matter under consideration, which may speed up the procedure. For example, the court decides that there is a claim for damages and further proceedings will focus solely on the amount of damages. This is usually used in very complex cases.

The Czech Republic is bound by the applicable EU legislation, especially the Recast Brussels Regulation (EU 1215/2012) on jurisdiction and the recognition and enforcement of judgments in civil and commercial matters and Rome I (EC 593/2008), as well as the Rome II (EC 864/2007) Regulations governing the applicable law relating to contractual and non-contractual obligations, respectively. In other cases, international treaties are used.

Additional rules are set by Act No 91/2012 Coll., on Private International Law, as amended. In terms of jurisdiction, pursuant to the Civil Procedure Act, as a general rule a contracting party is sued at the place of its registered office (or place of business or place of residence). However, exceptions from this general rule are available, so it is also possible to sue a party in the country where damage was caused, for example. Therefore, it is possible for Czech claimants to file claims for damages for breach of competition law in the Czech Republic even in cases with foreign defendants.

Under the Civil Code, the general limitation period is three years from the date on which the claimant learned or could have learned of the existence of the facts relevant for the claim – ie, three years from the date on which the claim could have been raised at a court for the first time. Moreover, the right to compensation for damage or other harm is statute-barred no later than ten years (or 15 years for intentional damage) after the date on which the damage or harm occurred (this period is of an objective nature, and it is not possible to file the claim after its lapse).

However, the Competition Damages Act contains a special provision pursuant to which the limitation period for claiming damages under the Competition Damages Act is five years and thus the general three-year period pursuant to the Civil Code does not apply. The limitation period commences on the date on which the claimant becomes aware of the damage or of the person liable for damages, and of the restriction of competition (or on the date on which the claimant should and could have become aware thereof). It commences no sooner than on the date on which the restriction of competition was ended. Furthermore, the Competition Damages Act stipulates that the objective ten-year (or 15-year) period described above does not apply to competition law damages claims and thus the limitation period is always linked to the knowledge of the claimant of the relevant facts.

The Competition Damages Act also provides for various situations in which the limitation period is suspended. For example, the limitation period is suspended:

  • for the duration of an investigation or proceedings conducted by an NCA of any EU member state or the European Commission in relation to a competition law infringement, as well as for a duration of one year after the relevant authority decides on the competition law infringement or the investigation or after the proceedings are terminated in a different way; or
  • for the duration of the proceedings to disclose evidence pursuant to the Competition Damages Act or legislation of another member state of the European Union.

The general rules concerning the disclosure of documents are contained in the Civil Procedure Code. The court may order a person who holds a document that is necessary to be produced as evidence to submit such document. However, the applicability of this provision is very limited and seldomly successfully called upon, because of the requirement to specifically identify the requested document, among other reasons.

The Competition Damages Act introduced specific disclosure/discovery provisions that enable the parties to request the disclosure of documents by the counterparty (or other persons having the documents at their disposal); the provisions, however, refer to the Civil Procedure Code and contain the requirement for the identification of the documents to be as specific as possible. The practicality of the disclosure/discovery procedure in the context of claims for competition damages is yet to be seen.

While pre-action disclosure is not available under the Civil Procedural Code, it is available under the Competition Damages Act.

Documents may be withheld from disclosure on the basis that they are privileged. The basis for this has been primarily laid out in the case law of the Court of Justice of the European Union. In any case, the privilege may be waived.

Leniency materials and settlement agreements are fully protected from disclosure under the Competition Damages Act.

Witnesses of fact are relied on in the proceedings on damages, and their position is regulated under the Civil Procedure Code. Their evidence is primarily given orally. A written statement of a witness is also possible, but is considered documentary evidence rather than a testimony.

Witnesses may be subject to cross-examination. An individual who is not a party to the proceedings must appear in the court upon a writ of summons and bear testimony as a witness. The witness must tell the truth and must not conceal anything. The witness may deny the testimony if it could result in a risk of criminal prosecution of the witness himself/herself or of the persons close to him/her; the court shall decide whether the denial of testimony is justified.

Competition damages claims usually rely heavily on expert witnesses, especially in relation to the amount of damages. The expert opinion is usually delivered in written form, followed by a cross-examination of the expert.

The parties may either file an expert opinion prepared privately or request that the court assigns the expert opinion.

Requesting joint statements indicating the areas in which experts agree/disagree in advance of trial is not common practice; the same applies to alternative methods of hearing expert evidence.

Under Czech law, the damage shall be compensated in full. Czech law distinguishes between actual damage and lost profit, with actual damage being a pecuniary loss that reflects a reduction in the assets of the person concerned, while loss of profit represents an increase in those assets that would have occurred in the normal course of things but did not occur. The general rule is to restore the claimant to the position it would have been in had the infringement not been committed. In complex competition damages claims, the damages are usually quantified by expert reports submitted to the court by the parties. The expert may also be appointed by the court in order to advise on the quantification of damages if the court considers it appropriate to do so.

Under Czech law, exemplary or punitive damages are generally not available. There are certain situations that are similar to the concept of punitive or exemplary damages, but these do not relate to competition damages.

The pass-on defence is available under the Competition Damages Act. It needs to be proven by the defendant on the basis of the general provisions on the burden of proof.

Under the Competition Damages Act, if it is necessary for full compensation of the damage, the claimant can request that the defendant pays interest so that the damages take into account the monetary devaluation occurring from the day the damage was caused to the date the damages are due.

Furthermore, default interest is applicable for the period from the maturity of the damages to the actual payment.

If the competition is restricted by the joint actions of several defendants, those defendants shall compensate the damage jointly and severally. The Competition Damages Act expressly states that the court cannot decide that any defendant shall compensate the damage proportionally to its participation in the competition law breach in question.

The defendants who are obliged to pay the damages jointly and severally have to settle among themselves commensurate to their participation in the damage caused (eg, in cases when one defendant pays the whole compensation).

In the case of damage caused by several defendants, the co-operating defendant (ie, the defendant who used the leniency procedure) only compensates the damage to its direct or indirect purchasers or suppliers. The co-operating defendant compensates the damage to other injured parties only if the claims for compensation against the other defendants (who are not co-operating defendants) are irrecoverable. The co-operating defendant is not obliged to pay damages to injured parties other than to its direct or indirect purchasers or suppliers, if the claims for damages of other injured parties against the other defendants are statute-barred.

There are no contribution proceedings under Czech law. New standalone proceedings would have to be initiated.

Before or after the commencement of the proceedings, a party may request the court to order an injunctive relief if it is necessary to regulate provisionally the relationships of the parties or if there is a threat that the enforcement of the decision could be jeopardised. The circumstances for the order of an injunctive relief must be demonstrated to the court to a reasonable level of probability. Moreover, the claimant must show that its case is arguable. The requested injunctive relief needs to be interim by nature, and the need to regulate the relationship provisionally or the threat that the enforcement of the decision could be jeopardised needs to be proven by the requesting party.

The court shall decide on the request within seven days, without hearing the other party. The applicant for an injunctive relief is obliged to provide to the court a returnable security in order to cover any loss caused by this injunctive relief. The defendant has the right to appeal against the injunctive relief, but such an appeal does not have a suspensory effect.

If the injunctive relief ceased to exist or was cancelled for a reason other than because the claim on the merits was granted or because the claimant's right was satisfied, the claimant shall compensate the damage caused by the interim relief to the other party. The security provided to the court is used for this compensation, but it may not be sufficient to cover the whole amount of compensation.

Although methods of alternative dispute resolution (such as arbitration or mediation) might potentially be available, given that a competition damages claim will seldom be based on a breach of a contract, mandating such alternative dispute resolution would likely require an agreement among the parties after the damage had occurred, which is unlikely, although not impossible.

Litigation funding is generally available from private third party funders, although it is a rather novel element in the Czech market. One of the methods used is for the third party funder to bear the costs of the proceedings and receive a proportion of the damages awarded to the claimant if the claim is successful. If the claim is unsuccessful, the claimant is under no obligation to pay any costs to the third party funder. However, the circumstances in which funding may be available depend solely on the agreement between the funder and the funded party.

The awarding of costs follows the general rules stipulated by the Civil Procedure Code, pursuant to which costs are awarded to the winning party. The losing party is thus ordered to pay the winning party’s costs, including the court fees, costs reasonably incurred in connection with the proceedings and costs of legal representation. In the case of a partial win, the costs are allocated proportionally. In exceptional cases, neither of the parties is awarded the costs, or full costs may be awarded despite only partial success of the claim. The legal costs are calculated based on an advocacy tariff – ie, the legal costs awarded by the court may be significantly different from the legal costs actually incurred. Security for costs is not used under Czech law.

Appeals are available pursuant to the general provisions of the Civil Procedure Code. As the private damages claims arising from competition law breaches are dealt with by the Regional Courts in the first instance, the appeals are heard by the High Courts. In order to submit an appeal, the appealing party needs to demonstrate that the first instance court (ie, the Regional Court in this case) erred either in law or in fact, or breached a procedural requirement relating to the proceedings. There is only a limited option of the parties to submit new facts and evidence in the appellate proceedings due to the principle of concentration (eg, in cases where the evidence or facts occurred after the decision of the first instance court).

Furthermore, an extraordinary appeal to the Supreme Court of the Czech Republic may be available in very specific circumstances, such as where the appellate court departed from the established decision-making practice of the Supreme Court or where the extraordinary appeal involves an issue of substantive or procedural law that has not previously been considered by the Supreme Court. However, it is not possible to submit any new facts or evidence within the proceedings before the Supreme Court.

In very exceptional cases, a constitutional complaint may be lodged with the Constitutional Court of the Czech Republic, provided that constitutional rights were violated during the proceedings.

Clifford Chance

Jungmannova 745/24
Prague 1
110 00
Czech Republic

+420 222 555 222

+420 222 565 000

prague-office@cliffordchance.com www.cliffordchance.com
Author Business Card

Trends and Developments


Authors



Clifford Chance is uniquely placed to combine its strengths in the area of antitrust with its dispute resolution expertise. The firm prides itself on being as close as possible to the commercial and transactional aspects of the work, which enables it to focus on providing the most important dispute-related advice – which is how to avoid litigation/arbitration in the first place. If it can no longer be avoided, the team's experience and close co-operation with colleagues from other practice areas such as antitrust allows it to deliver high-quality legal service both from a procedural and substantive perspective. This strategic approach focusing on high added-value advice enables the firm to participate on the highest-value disputes, such as representing Seznam in relation to the Google Android case in which Google was sanctioned with a historically high fine.

Introduction to Competition and Antitrust Law in the Czech Republic

Competition law in the Czech Republic is traditionally regarded as a branch of public law, in which a public authority – the Czech Office for the Protection of Competition (Czech Competition Office) or the European Commission – oversees the markets and ensures that:

  • dominant companies do not abuse their dominant position;
  • companies do not enter into cartel agreements; and
  • planned mergers of companies reaching certain thresholds of turnover do not threaten to distort competition.

These three points illustrate the three main pillars of competition law in the Czech Republic as well as in the European Union. The term "competition law" is commonly used interchangeably with the term "antitrust".

The term "antitrust" has its roots in the United States, where this branch of law primarily serves the purpose of combatting big monopolies (ie, trusts). Currently, both the Czech Competition Office and the European Commission use the term antitrust to cover oversight over the first two pillars (ie, protecting competition from abuses of dominant position and from cartels), while oversight over mergers stands aside as a part of the wider competition law framework. Strictly speaking, antitrust is a subcategory of competition law focused on protecting competition by imposing sanctions on entities that have already restricted competition, while merger clearance proceedings serve the purpose of avoiding structural threats to competition preventively.

It is the antitrust part of competition law that usually leads to litigation, which is why it is more common to refer to "antitrust litigation" rather than "competition law litigation".

Antitrust Litigation in the Czech Republic before 2017

If a company is sanctioned by the Czech Competition Office, for either abuse of dominant position or participation in a cartel, the company has an option to challenge the decision.

Firstly, the company may appeal the decision to the Chairman of the Czech Competition Office.

If the appeal is not fully successful, the company may then further challenge the decision by filing a court petition to a regional court as part of the more general right to have the court review administrative decisions. As the local jurisdiction of the court is governed by the statutory seat of the Czech Competition Office, with the Czech Competition Office being the defendant in such proceeding, all such antitrust petitions for a review of the decisions of the Czech Competition Office are to be filed with the Regional Court in Brno. This has led to this court having a certain specialisation and a high level of antitrust expertise.

The decision of the regional court may be further challenged by lodging an extraordinary appeal on questions of law with the Supreme Administrative Court of the Czech Republic. The extraordinary appeal may be lodged by either the company or the Czech Competition Office, depending on who is the successful party at the regional court.

Theoretically, the decision of the Supreme Administrative Court may be challenged by a constitutional complaint lodged with the Constitutional Court of the Czech Republic; however, the vast majority of constitutional complaints are rejected for lack of relevance from a constitutional law perspective.

All these instances have a significant impact on the duration of the trial, with proceedings often taking up to five years or even longer.

Antitrust Litigation in the Czech Republic after 2017

A significant development in the field of antitrust litigation in the Czech Republic was initiated by EU Directive 2014/104/EU on certain rules governing actions for damages under national law for infringements of the competition law provisions of the member states and of the European Union. This EU Directive led to all EU member states, including the Czech Republic, adopting their own national laws to regulate private competition law damages claims.

In the Czech Republic, the EU Directive was implemented by Czech Act No 262/2017 Coll., on Competition Damages (the Competition Damages Act), which came into effect on 1 September 2017 and has been a hotly debated topic ever since.

Although it was theoretically possible to file a standalone claim for damages based on a restriction of competition even before the Competition Damages Act was enacted, the claimant had to prove not only the specific amount of damage it suffered and the causal link between the damage and the restriction of competition, but also that competition had been restricted in the first place. Without the provisions of the Competition Damages Act, the decisions of the Czech Competition Office were not binding on the general courts, which predominantly lacked any antitrust law experience – given the complexity of this particular area of law and its close connection to highly advanced economic models and theories, this made the chances of success for such claims remote.

The Czech Competition Act significantly increased the potential of success of claims for damages caused by restriction of competition mainly by introducing the following.

  • The courts are bound by a decision of another court, the Czech Competition Office or the European Commission on the fact that a restriction of competition has occurred and who has committed it. As a result, the court no longer needs to decide on whether the competition law has been breached, which overcomes one of the main obstacles to standalone competition damages claims.
  • Where a decision on an infringement of competition law forming the basis of a claim for damages has been given by a national competition authority of another EU member state, it is presumed that competition was restricted by the person identified in such decision, unless the contrary is proven. Although the position of the claimant would be slightly weaker in such case, the refutable assumption shifting the burden of proof increases the potential of success significantly compared to standalone claims.

Given the above, what remains to be proven under the Competition Damages Act is the amount of damage caused by the restriction of competition and the causal link between the restriction of competition and the damage. Even in this respect, the Competition Damages Act makes the situation easier for the claimant, mainly through the following.

  • The applicability of the general provision of the Czech civil law enabling the court to reduce the damages for reasons of special considerations is excluded by the Competition Damages Act.
  • If the amount of damages cannot be precisely determined, it can be determined at the court's discretion based on the individual circumstances of the case.
  • The Competition Damages Act introduces a discovery procedure that enables evidence not available to the claimant to be requested, with a potential sanction for failure to comply with the discovery, consisting of the introduction of a presumption that the evidence would have proven the allegations raised by the claimant.
  • If competition was restricted by several infringers, they are liable jointly and severally.
  • The Competition Damages Act contains a special limitation period of five years, which commences on the date on which the claimant becomes aware of the damage or of the person liable for damages, and of the restriction of competition (or on the date on which the claimant should and could have become aware thereof). It commences no sooner than on the date on which the restriction of competition was ended.

In relation to the question of the amount of damages, it is highly advisable to consult the Practical Guide on quantifying antitrust harm in damages actions published by the European Commission, which provides very helpful guidance of how the damages shall be approached – both for the parties and for the court.

Despite the above, it is to be expected that there will be certain difficulties in pursuing follow-on damages claims, mainly due to the following.

  • There are multiple procedural questions that might be subject to different interpretation.
  • The applicability of the special limitation period is not entirely clear and, therefore, there might be different interpretations of this question as well.
  • (Functional) discovery proceedings are a new concept in Czech law – the courts might be hesitant to grant discovery requests and the parties might lack guidance on how to prepare effective discovery requests.
  • All of the above might significantly impact the duration of the trials. As there is only very limited case law available so far, the "rules of the game" are not entirely known yet and it might take a significant amount of time before they are known.

Last but not least, there are no specialised antitrust courts and the general rules on jurisdiction apply, with the exception that the regional courts, which are typically courts of second instance, are competent to hear the cases as the first-instance courts. This means that the cases are to be brought to the general courts identified either based upon the statutory seat of the defendant or, alternatively, the place where the restriction of competition occurred or where the damage materialised. The claims are therefore to be decided by general courts that might not have any previous experience with antitrust or competition law in general.

Decisions of the regional courts may be appealed at the high courts by the losing party. Furthermore, an extraordinary appeal may be filed with the Supreme Court of the Czech Republic, and, potentially, a constitutional complaint may be filed. Please note that the court instances are fully parallel to the administrative antitrust litigation mentioned in Antitrust Litigation before 2017, above, with the Constitutional Court being the only court where the same judges may deal with a case from both the administrative and private branches of the law. Therefore, the expertise of the courts revising the administrative decisions of the Czech Competition Office will not be available in private antitrust cases, and even case law might not be fully applicable.

Actual and Potential Impacts of the Competition Damages Act in the Czech Republic

One of the main developments resulting from the enactment of the Competition Damages Act has been increased litigation activity in the local tech sector, which is likely to continue on a larger scale.

The DG Comp of the European Commission under the leadership of Ms Margrethe Vestager continues to focus intensively on the restriction of competition by the global tech companies, with Alphabet/Google and Qualcomm being fined repeatedly for serious anti-competitive behaviour, and Amazon and Apple being investigated.

The Czech Republic, on the other hand, has a number of tech companies that invest heavily in advanced technologies and are capable of developing from local start-ups into global players, with several success stories already. Therefore, there is a high likelihood that local companies have been or will be affected by the competition-restricting practices of the main global players that have been fined by the European Commission.

Although private antitrust litigation lacks a tradition in the Czech Republic and the general courts might struggle to some extent with, from their perspective, this entirely new area of law, the regulation now clearly allows local companies to protect their rights against even the main global players, and, by these efforts, ultimately contributes to the level of competition in the sector.

Clifford Chance

Jungmannova 745/24
Prague 1
110 00
Czech Republic

+420 222 555 222

+420 222 565 000

prague-office@cliffordchance.com www.cliffordchance.com
Author Business Card

Law and Practice

Authors



Clifford Chance is uniquely placed to combine its strengths in the area of antitrust with its dispute resolution expertise. The firm prides itself on being as close as possible to the commercial and transactional aspects of the work, which enables it to focus on providing the most important dispute-related advice – which is how to avoid litigation/arbitration in the first place. If it can no longer be avoided, the team's experience and close co-operation with colleagues from other practice areas such as antitrust allows it to deliver high-quality legal service both from a procedural and substantive perspective. This strategic approach focusing on high added-value advice enables the firm to participate on the highest-value disputes, such as representing Seznam in relation to the Google Android case in which Google was sanctioned with a historically high fine.

Trends and Development

Authors



Clifford Chance is uniquely placed to combine its strengths in the area of antitrust with its dispute resolution expertise. The firm prides itself on being as close as possible to the commercial and transactional aspects of the work, which enables it to focus on providing the most important dispute-related advice – which is how to avoid litigation/arbitration in the first place. If it can no longer be avoided, the team's experience and close co-operation with colleagues from other practice areas such as antitrust allows it to deliver high-quality legal service both from a procedural and substantive perspective. This strategic approach focusing on high added-value advice enables the firm to participate on the highest-value disputes, such as representing Seznam in relation to the Google Android case in which Google was sanctioned with a historically high fine.

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