Významná tržní síla: uloženy pokuty za splatnost faktur delší 30 dnů

Significant market power: fines imposed for invoices more than 30 days overdue

The Office for the Protection of Competition ("the Office") has informed that in the past few days it has issued two further decisions on the commission of offences in the area of significant market power and unfair commercial practices in the sale of agricultural and food products, for which it has imposed fines totalling CZK 1 million.

The Office thus followed up on its earlier decisions (we informed you about the first one HERE), in which it also imposed fines for the offence of an entity (buyer) with significant market power negotiating or applying to its supplier in specific business relationships a deadline for payment of the purchase price for the purchase or sale of agricultural products or food products longer than 30 days from the delivery of the invoice. The law declares such a commercial practice to be unfair and prohibits it as such.

It should be stressed that a buyer with significant market power may commit the above offence not only by negotiating the relevant prohibited provision in a contract with a supplier, but also by (merely) practicing payment of invoices in excess of 30 days, even if the contractual arrangements comply with the legal requirements.

From a practical point of view, it is striking that customers with significant market power fail to apply such clear and (in our view) relatively unproblematically interpreted legislation in their business relations, which ultimately leads to the commission of an offence, related proceedings before the Office and, in many cases, to the imposition of a fine.

In this context, it should be recalled that the major amendment to the Act on Significant Market Power of 2022 (we have provided you with more detailed information HERE and HERE) has comprehensively changed the concept of significant market power, and the statutory regulation now applies to a significantly wider range of entities engaged in the sale of agricultural and food products. They must then comply with all the requirements set out in the law. It can again be recommended that businesses in the field of sales of agricultural and food products regularly check their position in relation to specific suppliers on the basis of their turnover and, if they find that they qualify as a customer with significant market power, for example, to revise the contractual terms agreed and applied in practice or to take other appropriate measures to ensure that the law is not infringed.

For further information, please contact the author of this article or other members of the EY team with whom you work.

Author:

Jan Turek