Czech Competition Enforcement Facing Major Changes

I. Introduction

The Czech Competition Authority ("CCA") has released the long-anticipated draft amendment to Act No. 143/2001 Coll., on the Protection of Competition (the "Competition Act"). The proposed overhaul would equip CCA with a substantially expanded enforcement toolkit, encompassing — among other things — a novel market investigation mechanism, direct administrative sanctions for individual managers, and a broadened merger control framework featuring a new call-in power. With the draft still in the early phases of the legislative procedure, now is a critical window for affected businesses to shape the outcome through active engagement before the key policy choices become final.

The draft targets an effective date of 1 January 2027, a timeline that appears highly ambitious given the scope and complexity of the reforms. In light of the far-reaching nature of the proposed changes, undertakings with operations in the Czech market — in particular those active in highly concentrated industries, those involved in mergers and acquisitions, and those that may hold a dominant market position — are well advised to participate in the legislative process without delay and to closely track the progress of the amendment as it advances through Parliament.

The following key issues are addressed below:

II. Merger Control: Revised Thresholds and a New "Call-In" Mechanism

1. Increased Notification Thresholds — Reduced Mandatory Filing Obligations

The rationale for raising thresholds is that the current thresholds are more than 20 years old, and inflated numbers of filings often concern transactions with little genuine competitive risk in the Czech Republic. CCA estimates that the threshold increase could reduce the number of notified cases by approximately 30%, based on data from 2014–2023, with most of the reduction falling in simplified-procedure cases.

The draft increases the merger control thresholds, raising, in the first set of thresholds, local combined turnover threshold from CZK 1.5 billion to CZK 2.5 billion (approximately EUR 100 million) and the individual local turnover threshold for at least two parties from CZK 250 million to CZK 350 million (approximately EUR 14 million). The second set of thresholds is increased accordingly, requiring local revenues of one party (target) above CZK 2.5 billion and worldwide revenues of another party above the same amount.

For joint ventures specifically, the draft introduces a notable break from the current regime and full consistency with the EU approach, considering any JV (be it existing or newly created) as a target. It brings a change in JVs triggering a mandatory notification only where the JV itself or both of its parents generate local Czech turnover (and not only one as is currently the case).

Key point: The higher thresholds mean that many routine transactions currently requiring notification — in particular smaller acquisitions — will fall outside the mandatory filing obligation, reducing regulatory burden and deal timeline friction. For joint ventures specifically, the draft introduces a notable practical change: a JV will trigger a mandatory notification only where the JV itself or both of its parents generate local Czech turnover. International groups with Czech operations on only one side of a JV — transactions which under the current rules may require notification — will no longer face a mandatory filing obligation. Certain (although not all) fully functional JVs with exclusive focus outside the Czech Republic would similarly no longer require mandatory filing.

2. New "Call-In" Mechanism — Post-Closing Exposure for Sub-Threshold Transactions

This is perhaps the most significant new element in the merger control chapter and one warranting particular business attention.

Under the proposed amendment, CCA may call in a transaction for notification even where it does not meet the standard thresholds, provided that the combined Czech turnover of all parties exceeds CZK 2.5 billion, which can be triggered by one party (acquirer) only. CCA must exercise the call-in within 6 months of the relevant triggering event (i.e., the closing of the transaction or acquisition of control), and once it does so it must give the parties at least 30 days to file.

Key point: The call-in mechanism imposes no minimum revenue threshold on the target. The acquired company may generate zero or negligible Czech revenues, and CCA may still call in the transaction. This is particularly relevant for acquisitions of start-ups, early-stage companies, or businesses with no Czech presence — precisely the types of transactions that traditional turnover-based thresholds are designed to exclude from mandatory review. Even for sub-threshold deals, there is now a 6-month post-closing risk window during which CCA may intervene. In concentrated sectors or sectors with high enforcement risk, deal planning will need to account for this possibility — in technology, digital and healthcare M&A, this changes the risk calculus materially. "Killer acquisitions" are specifically flagged as the type of deal the call-in is designed to capture. Businesses may at the moment wish to advocate for clearer substantive criteria governing when CCA may exercise call-in (e.g., requirements around market share or competitive effects indicators), a shorter review window, or the availability of the simplified procedure for voluntary call-in notifications.

Critically, if CCA calls in a transaction that has not yet been fully implemented, the parties must halt further implementation until a clearance decision becomes final — effectively imposing a standstill obligation after closing.

A voluntary notification option is also proposed for deals that could be called in, allowing parties to proactively seek legal certainty. However, the simplified procedure would not be available for call-in filings.

As a transitional matter, the call-in mechanism will not apply to mergers that were completed before the effective date of the amendment.

III.  Novel Competition Instrument for Addressing Market Failures

This is the most structurally novel element of the entire amendment and introduces a paradigm shift in Czech competition enforcement.

The draft introduces a new instrument that allows CCA to intervene where competition fails in the long term due to market evolution or structure, rather than requiring proof of cartel conduct or abuse of dominance. The tool is based on market investigations.

1.  Monitoring of Markets

A new provision allows CCA to conduct non-public "market monitoring" to check whether market conditions indicate a distortion or failure of competition. This is a preliminary, non-binding intelligence-gathering tool, which will not be public.

2. Formal Market Investigations

Where CCA suspects a long-term failure of effective competition, it may launch a formal market investigation. The initiation of an investigation must be published, and the investigation must be completed within a maximum of 1 year.

The draft sets out indicators and assessment factors for determining whether long-term competition failure exists. "Long-term" is defined as continuous for at least 3 years or recurring and unlikely to cease within 2 years.

After completing a market investigation, CCA publishes a report (which may include recommendations to the government or other authorities) and, where long-term competition failure is found, may impose generally applicable measures for a period of up to 3 years.

3. Remedies — Behavioural and Structural Measures

CCA may impose a broad catalogue of non-structural measures, which include:

• Data access and information-sharing obligations

• Transparency and interoperability standards

• Adjustments to contract terms and types

• Accounting separation obligations

• Bans on certain unilateral practices

• In highly concentrated markets, even restrictions on further consolidation (i.e., further acquisitions)

Where behavioural measures are found to be insufficient, CCA may — as an exceptional measure — impose structural remedies by decision, including the divestiture of a business or part of a business.

Measures of general nature are limited to 3 years but may be extended. Commitments may be offered by market participants and accepted by CCA subject to conditions and obligations.

Key points: Structural remedies — including forced divestitures — may be imposed without any finding of an infringement of competition law. No wrongdoing on the part of the affected undertaking needs to be established. This is a fundamental departure from the traditional competition enforcement model, under which structural intervention is available only as a consequence of a proven breach of competition rules. Businesses — particularly in concentrated, digital, pharmaceutical, energy or financial markets — can now face binding market-wide measures and potentially divestitures on the basis of market structure alone. This is arguably the highest-priority area for business engagement in the legislative process.

4. Sectoral Inquiries

A new provision on sector inquiries requires CCA to announce the start of an inquiry publicly, publish a draft report with at least a 60-day public comment period, publish responses and address them in the final report, and then inform the government and competent regulatory authorities.

IV. Individual Liability of Managers in Horizontal Cartel Cases

The stated policy aim of introducing individual liability is to increase deterrence and enforcement effectiveness by enabling administrative punishment of individuals who concluded or facilitated hard-core horizontal agreements.

The draft introduces the possibility for CCA to investigate and sanction managers and other natural persons in parallel with the investigation of the undertaking itself. Individual liability is limited to "by-object" horizontal agreements (i.e., price-fixing, market-sharing, bid-rigging and similar hard-core restrictions). The attempt to conclude such an agreement is also punishable.

Fine caps for core infringements are set at up to CZK 10 million. In addition, CCA may impose an activity ban (disqualification from certain roles) for a period of up to 5 years.

Key points: For the first time in Czech competition law, individual managers face direct personal administrative sanctions — not merely fines imposed on the undertaking — for participating in horizontal cartels. This applies to price-fixing, market-sharing and bid-rigging. Fines of up to CZK 10 million and a disqualification (activity ban) of up to 5 years may be imposed on the individual personally, irrespective of whether the individual acted on behalf of or under instruction from the undertaking. Personal liability attaches to the individual's own conduct in concluding or facilitating the prohibited agreement. Senior management and executives involved in commercial negotiations, trade association activities and procurement processes face direct personal exposure, and compliance programmes will need to be updated to reflect this risk. Leniency decisions will need to take into account the interplay between corporate and individual exposure, given that individual protection is linked to the corporate leniency framework.

Individual liability is linked to the corporate leniency framework: where the undertaking files a leniency application in time and individuals actively cooperate, current and former managers and employees benefit from protection from individual sanctions.

V. Broadened Inspection and Dawn Raid Powers

The draft significantly modernises and broadens CCA's investigation toolkit.

1. Continuation of Inspections Off-Site

The draft would allow CCA to complete its review of copied electronic materials at its own premises — i.e., outside the inspected business — with appropriate sealing and technical safeguards in place and the right of undertaking representatives to attend the off-site review. In practice, off-site continuation of inspections is set to become the standard mode of operation rather than an exceptional measure. CCA will be able to seize electronic data during a dawn raid and analyse it at its own premises at its own pace. Businesses should treat any dawn raid as potentially resulting in an extended, CCA-controlled review of their electronic records well beyond the day(s) of the on-site inspection itself.

2. Inspections Conducted Remotely

Dawn-raid powers are extended to cover records accessible via devices enabling remote access, and cooperation of employees during the inspection is required. With the undertaking's consent, CCA may also conduct a fully remote inspection using electronic access devices – which will, of course, lose the surprise aspect.

3. Legal Professional Privilege (LPP)

An explicit procedure is introduced for legal professional privilege (LPP) disputes. Where LPP is claimed and doubts remain, sealed duplicate copies of the disputed documents are created. The undertaking then has 2 months to bring a court action. If no action is brought within the deadline, CCA may open the copies and add them to the file. If the court upholds the privilege claim, the documents must be returned to the undertaking.

4. Electronic Communications Data

For supervision purposes, CCA may request traffic and location data from electronic communications providers, but only with prior written authorisation from the competent High Court judge, and only where necessary and proportionate.

Key points: The extension of dawn raids to off-site and potentially remote settings substantially increases the intrusiveness of inspections. In practice, off-site continuation of inspections is set to become the standard mode of operation — businesses should treat any dawn raid as potentially resulting in an extended, CCA-controlled review of their electronic records well beyond the day(s) of the on-site inspection itself. The formalisation of the LPP challenge mechanism provides procedural certainty but imposes a strict 2-month deadline to bring a court action; failure to act within that window results in CCA being entitled to open sealed copies and use them in the investigation without further recourse. Robust pre-inspection LPP protocols — including clear identification and segregation of privileged materials, standing instructions to external counsel, and internal procedures for asserting privilege during an inspection — are now essential. Businesses should review their document management, IT architecture, and LPP procedures, and consider advocating for clearer conditions governing consent for remote inspections and stronger safeguards around off-site review processes.

VI. Additional Topics — Leniency, Settlement, File Access

1. Leniency — Cooperation Obligations and Individual Protection

Eligibility for leniency requires the undertaking to make its current managers and employees available for interviews and testimony, and to use reasonable efforts to ensure former managers and employees are similarly available. Where these conditions are met and individuals cooperate actively, they benefit from protection against individual sanctions.

CCA must accept "simplified" leniency applications from applicants who have already filed with the European Commission (for conduct affecting more than three Member States). CCA may request only limited supplementary information in such cases and may request a full application early only in exceptional circumstances.

2. Settlement — Limited Right of Appeal

In settlement proceedings, if the settlement request is accepted and a settlement decision is issued, the settling party's ability to challenge that decision on appeal is significantly curtailed. This restriction on appeal will not apply to settlement applications filed before the effective date.

3. File Access — Additional Exclusions

File access rights are restricted in several respects: leniency and settlement submissions and related materials are excluded from file access; materials gathered in market monitoring, market investigations and sector inquiries are also excluded.

CCA may also temporarily exclude certain parts of the file until the statement of objections stage if disclosure could frustrate ongoing supervision activities. File access may be provided remotely using electronic identification.

Leniency and settlement requests are treated as strictly confidential, with access limited to the parties for the purposes of their defence in directly related proceedings (including allocation of joint and several fines and judicial review).

4. Inter-Authority Data Sharing

The draft adds CCA to the list of institutions expressly entitled to obtain data held by other public bodies — including the Ministry of Finance, the Czech National Bank, the Czech Statistical Office, and the Supreme Audit Office. Certain bodies will be required to proactively share information indicating possible competition offences with CCA

Key point: The extension of file access restrictions to new investigative tools — market monitoring, market investigations and sector inquiries — may affect parties' ability to fully defend themselves in proceedings arising from those tools. The individual protection linked to leniency cooperation creates important incentives but also imposes corresponding obligations on undertakings and their current and former managers and employees. CCA will have access to a significantly broader pool of public-source data, increasing its investigative capacity. The proactive reporting obligations on other public bodies are particularly noteworthy for businesses in regulated sectors (banking, insurance, capital markets) and those active in public procurement.