Chairman Rafaj confirmed fine for Sokolovská uhelná company

15 Sep 2010

Mr. Petr Rafaj, Chairman of the Office for the Protection of Competition (the Office), confirmed by his second-instance decision a fine of CZK 17.283 million imposed on the company Sokolovská uhelná, právní nástupce, a.s.

In the years 1997-2007 the party to the proceedings concluded and fulfilled prohibited agreements on export prohibition which aimed at disturbing competition and could have resulted in distortion of competition in the market of brown coal briquettes, brown energetic coal, and brown sized coal in the Czech Republic.

In the agreements the customers of Sokolovská uhelná committed not to export brown coal and brown coal briquettes outside the Czech Republic or to trade in it so as to enable such export.

In its decision the Office stated the infringement of both the Czech Act on the Protection of Competition and Article 81 of the EC Treaty (to-day Article 101 of the TFEU), because the mentioned agreements could have influenced trade among the EU Member States. During the course of the administrative proceedings conclusion and fulfillment of agreements on price fixing for further retail or on exclusivity of supplies of brown coal and briquettes have not been proven.

The agreements on export prohibition are perceived as significant distortion of competition by both Czech and European law. The aim of these agreements is distortion of competition, thus there is no need in proving the negative impact on competition. Nevertheless, in the given case the Office came to a conclusion that the negative result of the agreements under consideration could have been distortion of competition within the framework of one brand. By means of agreements on export prohibition the supplier could have divided the common market and thus contributed to closing of a market for competitive goods in the framework of the same brand. Thus the agreements under consideration led to decrease in the number of customers which could have exported the goods bought from the party to the proceedings. On the basis of the agreements on export prohibition the customers were limited in their choice of the end customer which could have led to decrease in the offer for customers.

In the proceedings on appeal Mr. Rafaj dismissed the statement by Sokolovská uhelná that the agreements in question were not prohibited, were not fulfilled and did not have a potential impact on the market.

External Relations Department
10/108/HS032