BEKO Fined 13 Million for Obstructing the On-Site Inspection

The Office for the Protection of Competition (hereinafter referred to as "the Office") imposed a fine of CZK 13,651,000 on BEKO SPÓLKA AKCYJNA for an infringement of the obligation to provide cooperation during an on-site inspection carried out by the Office at the business premises of its branch in Prague. The decision has been appealed and is not final.

The Office proceeded to an on-site inspection at the business premises of BEKO's branch plant in Prague after it had gathered reasonable indications of the conclusion and performance of possible prohibited agreements on the direct and indirect pricing of goods for resale negotiated by BEKO with customers in the Czech Republic. The inspection focused primarily on the business records of BEKO employees and representatives who, within the scope of their duties, are responsible for communication and business relations with purchasers of BEKO electrical appliances in the Czech Republic. Some of these sales representatives carry out their activities non-exclusively for BEKO on the basis of a contract of assignment under their own business ID number (the so-called "agents").

Despite being repeatedly informed by the Office's inspectors about the Office's statutory powers and the rights and obligations of the undertakings, BEKO failed to comply with the Office's request to block the online mailboxes of the agents on the @beko.com internet domain so that their content could not be manipulated, thereby obstructing the purpose of the inspection. Furthermore, BEKO did not allow the inspectors to fully exercise their power to inspect or make copies of business records. It also wrongfully sought to exempt itself from its duty to cooperate by delegating responsibility for compliance to persons carrying out business activities for it. Those persons are, however, legally obliged to provide cooperation and a violation of that obligation by them constitutes a violation of the obligation of the undertaking being inspected. By failing to provide the inspectors with access to the business records contained in the e-mail account of one of the agents, BEKO violated its obligation.  

On-site inspections are one of the Office's most important and effective tools for detecting infringements of competition law. By refusing to cooperate, the very intention and purpose of an on-site inspection is denied or jeopardised. The Competition Act therefore allows the Office to punish non-cooperation by imposing a fine of up to one per cent of the undertaking's net turnover for the preceding financial year.

The undertaking BEKO is a wholesaler of electrical household appliances and radio and television sets. In the Czech market it distributes the Beko and Grundig brand products.

Press Unit of the Office for the Protection of Competition
23/0167 – V0103/2023

This decision was annulled and the fine was cancelled by the decision of the Chairman of the Office in July 2024. The administrative proceeding was terminated.