Fines exceeding CZK 280 million imposed on O2 Czech Republic and SHERLOG Technology for cartel agreement

SHERLOG Technology, a.s. and O2 Czech Republic a.s. (hereinafter referred to as “SHERLOG” and “O2”) entered into a cartel agreement in the area of vehicle and other means of transport monitoring and electronic logbook services. In its first-instance decision, the Office for the Protection of Competition (hereinafter referred to as “the Office”) imposed a fine of CZK 18,357,000 on SHERLOG and CZK 262,320,000 on O2 for anticompetitive conduct. SHERLOG was also banned from performing public contracts for six months. The decision is not yet final and may be challenged by an appeal, which will be decided by the Chairman of the Office.

According to the Office’s findings, SHERLOG and O2 infringed both the Czech Act on the Protection of Competition and EU competition rules by allocating customers between themselves and by coordinating the offers and sales of vehicle and similar mobile transport monitoring services and electronic logbook services to those customers through mutual communication and the exchange of information, at least from 7 December 2012 to 9 June 2022. Their coordination also concerned bids submitted to contracting authorities in public procurement procedures.

The Office launched investigation of the case in 2022, when it also carried out on-site inspections at both companies. During the administrative proceedings, the Office found that the two companies had cooperated for many years in providing the O2 Car Control service. The commercial cooperation on the joint product itself was not subject to sanctions. However, the Office concluded that the contractual arrangements concluded in December 2012 went beyond ordinary commercial cooperation. Under these arrangements, SHERLOG was significantly restricted in offering its own SHERLOG Trace product, which was a competing alternative to O2 Car Control. In many cases, SHERLOG could not offer its product without prior communication with and approval from O2. This created a mechanism under which the two undertakings allocated customers between themselves and coordinated their commercial activities. The companies determined which customers would be offered O2 Car Control and in which cases the competing SHERLOG Trace product could be offered. The Office classified this arrangement as a prohibited customer-allocation agreement.

The administrative proceedings further established that this mechanism was not merely a formal (and temporary) contractual provision but was applied in practice over a prolonged period. According to the Office, e-mail communications between the two companies show that, in specific cases, the undertakings shared information about business opportunities and coordinated which of them would pursue a particular customer or public contract. Such conduct was identified, for example, in relation to contracts for Nové Město na Moravě, Prague Airport and the Service Facilities of the Ministry of the Interior. The Office therefore concluded that, at least from 7 December 2012 to 9 June 2022, O2 and SHERLOG entered into and implemented a prohibited by-object customer-allocation agreement aimed at removing uncertainty regarding their future competitive conduct and restricting competition between them in acquiring customers.

The long duration of the anticompetitive conduct played a particularly important role in determining the amount of the fines. As no mitigating circumstances were identified, SHERLOG was fined CZK 18,357,000 and, because the infringement was committed in connection with public procurement, was also banned from performing public contracts for six months. The Office did not impose such a ban on O2 because it could have had significant adverse effects on competition in the telecommunications services sector, where O2 holds substantial market shares. Instead, O2’s fine was increased by more than CZK 75 million to a final amount of CZK 262,320,000.

Press Unit of the Office

26/144 – S0255/2023