Sokolovská uhelná company concluded restricted agreements on export prohibitions

By its first-instance decision of January 8, 2010 the Office for the Protection of Competition of the Czech Republic (the Office) has imposed a fine of CZK 17,283 million on company Sokolovská uhelná.

The party to the proceedings had concluded and performed restricted export prohibition agreements which are aimed for distortion of competition and which might have led to distortion of competition in the market of brown coal-cakes, brown energetic coal and brown sized coal in the Czech Republic.

 

In its decision, the Office stated both Czech Competition Act infringement and infringement of Article 81 of the Treaty Establishing European Community (to-day Article 101 TFEU). On the contrary, during the course of the administrative proceedings, conclusion and performance of agreements on price-fixing, resale price maintenance or commitments on exclusive distribution of brown coal and fuel cakes was not proven.

 

Agreements on export prohibitions are considered to be serious distortion of competition both by Czech and European competition law. Such agreements are intended to distort competition and thus it is not necessary to prove negative impacts on competition. Nevertheless, the Office concluded that in this case negative impact of agreements in question may consisted in restriction of intra-brand competition. Through the agreements on export prohibition supplier was able to split common market thereby contributing to market foreclosure for competing intra-brand products. Agreements in question led to the reduction of number of purchasers who might export the goods bought from the party to the proceedings. Based on agreements on export prohibition the distributors were limited in choice of final customer which might have led to offer reduction for consumers.

 

The Office has already dealt with issue of agreements on export prohibition. A fine of total amount of CZK 5 million has been imposed recently on company Karlovarské minerální vody within the settlement procedure. The Office has also inquired into possible export prohibitions of several brewing companies. Finally, in 2003, company ČEZ was imposed a fine of total amount of CZK 7.5 million for similar infringement (prohibition on re-import of electric power.    

 

External relations department

10/007/HS002