Navigating the New Era of Competition Law: Key Reforms in the Czech Republic

The Czech Republic’s competition law framework is on the cusp of significant transformation, marked by ambitious legislative reforms and evolving enforcement priorities that are poised to reshape the landscape of competition law in the region. These developments compel practitioners and businesses alike to adapt to a new legal reality characterized by proactive regulatory measures and enhanced oversight.

One of the landmark advancements set to impact the Czech legal system is the anticipated amendment to the Czech Competition Act. This pivotal reform is expected to newly enter legislative process in early 2026, after the new government is formed. Central to this evolution is the introduction of the New Competition Tool (NCT), which represents a monumental shift in the enforcement capabilities of the Czech Competition Authority (CCA). This powerful mechanism will allow the CCA to intervene in markets identified as dysfunctional, even in the absence of explicit legal infractions such as cartel behavior or dominance abuse. With the capability for rapid interventions within a timeframe of one year, the NCT enables the CCA to impose both behavioral and structural remedies—such as divestments—particularly in scenarios where behavioral measures fail to yield sufficient results. This regulatory tool will extend its reach into critical sectors including telecommunications, energy, and banking, thereby underscoring an expanded regulatory purview.

In tandem with the introduction of the NCT, further amendments to the competition law will strengthen the CCA’s authority concerning merger control. This marks a strategic shift toward more assertive scrutiny of transactions that, while not meeting traditional turnover thresholds, may nonetheless pose competitive or strategic risks. The incorporation of a unique call-in mechanism is designed to enhance oversight of these deals, reflecting a response to the complex and evolving nature of market dynamics, particularly in light of the rise of digital markets, intricate investment structures, and pressing national security concerns. These changes not only align with broader European trends but also draw insights from legislative experiences in other member states such as Germany and Austria, thereby reinforcing an increasingly robust sanctioning framework.

The scope of the reforms includes significant procedural alterations aimed at enhancing enforcement capabilities. Notable among these are proposals for imposing personal liability on individuals engaged in hardcore cartel activities and broadening investigative powers. However, some more contentious initiatives, such as conducting dawn raids without prior suspicion, have been moderated in response to advocacy from various stakeholders during public consultations. This stakeholder engagement reflects a commitment to respond to economic realities as well as the interests of market players.

These legislative advancements emerge against a backdrop marked by heightened public scrutiny of market behaviors, particularly within essential goods sectors, such as food, where inflation and price increases have sparked significant calls for intervention. Although the CCA does not function as a price regulator, the improved toolkit at its disposal offers innovative avenues for addressing anti-competitive practices that affect consumer welfare and market health.

Current enforcement trends indicate a sharp focus on vertical agreements and specific industries including the automotive and electric vehicle sectors. Ongoing sector-specific inquiries demonstrate the CCA’s intent to tailor its oversight according to emerging market realities, thus aligning legal practices with contemporary challenges.

For legal practitioners and corporations navigating the intricacies of mergers, acquisitions, and regulatory compliance within the Czech Republic, these impending reforms signal a pressing need for thorough preparation. Organizations must ready themselves for an environment of intensified scrutiny, where the expanded remit and enhanced remedies of the Czech Competition Authority necessitate careful strategic planning and adept legal counsel to effectively mitigate risks in an increasingly multifaceted and dynamic marketplace.

As the Czech Republic embarks on this transformative journey in competition law, the role of experienced legal professionals will be pivotal in fostering compliance and navigating the complexities that accompany regulatory changes. If needed, our law office eis prepared to guide clients through the nuances of an evolving legal environment.