Is The Constitutional Court found no 254 / 2020 Coll. still valid?

Yes, The Constitutional Court found no 254 / 2020 Coll. is still valid and effective.

The Constitutional Court found no 254 / 2020 Coll.

Q: When it became The Constitutional Court found no 254 / 2020 Coll. effectiveness?

The Constitutional Court found no 254 / 2020 Coll. became effective date not available.

The Constitutional Court found of 7 April 2020 sp. zn.

Valid The Constitutional Tribunal found

Text versions: 27.05.2020

I. II. III. IV. V. VI. VI./a VI./b VI./c VII. VII./a VII./b VII./c VII./d VII./e VII./f VIII. „§ 1 § 2 § 3 § 3a § 4 IX. IX./a IX./b IX./c IX./d IX./e IX./f X. X./a X./b X./c X./d X./e X./f XI. XI./a XI./b XI./c XI./d XI./e XI./f XI./g XI./h XII. „§ 3a XII./a XII./b XII./c XII./d XII./e XII./f XIII. „§ 4 XIII./a XIII./b XIII./c XIV. „§ 4 XIV./a XIV./b XIV./c XV. „§ 4 XV./a XV./b XV./c XVI. „§ 4 XVI./a XVI./b XVI./c XVI./d XVI./e XVII. „§ 5a XVII./a XVII./b XVII./c XVII./d XVII./e XVIII. „§ 8 XVIII./a XVIII./b XVIII./c XIX.

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254

FIND

The Constitutional Court

On behalf of the Republic

The Constitutional Court, under point (b) of Article 3 (1) of the Act, decided on 30 / 16 on 7 April 2020 in plenary by the President of the Court of Paul Rychetský (Judge of the Rapporteur) and by the judges Louis David, Jaroslav Fenyk, Josef Fiale, Jan Filip, Jaromír Jirsa, Tomír Žirsa, Vladimir Láčník, Pavel Šámal, Katřina Šimáčková, Vojtěch Šimíček, Milady Tomková, David Uhlír and Jiří Zemánek, on a) of a group of senators appointed by the Senator Ing. Veronica Vrecionová, on the abolition of the Law No. 395 / 2009 Sb., on the significant market power in the sale of agricultural and misuse of agricultural and use of agricultural products.

as follows:

I. Paragraph 3a (a), in the words "the amount of all cash performance of the supplier, the total of which may not exceed 3% of the annual revenues of the supplier over the last completed financial year of 12 months for food delivered to an individual customer in the year in which the financial performance occurred," Act No 395 / 2009 Coll., on significant market power in the sale and misuse of agricultural and food products, as amended by Act No 50 / 2016 Coll., shall be deleted from the date of publication of this finding in the Collection of Acts.

II. Proposal by the appellant (a) for the annulment of Sections 3, 4 (1), 4 (2) and 4 (2) of the provision in the words "in particular" and 4 (2) (c), (d), (h), (i) and (k) of Act No. 395 / 2009 Coll., on significant market power in the sale and misuse of agricultural and food products, as amended by Act No. 50 / 2016 Coll., is rejected.

III. Procedure for the proposal of the appellant (a) for the annulment of Sections 5 (2), 7, 8 and 9 of Act No. 395 / 2009 Coll., on significant market power in the sale and misuse of agricultural and food products, as amended by Act No. 50 / 2016 Coll., is hereby terminated.

IV. In the rest, the author's proposal (a) to repeal Act No. 395 / 2009 Coll., on significant market power in the sale and misuse of agricultural and food products, as amended by Act No. 50 / 2016 Coll., is rejected.

V. The appellant's proposal (b) to abolish § 5a (1), § 5a (2) in the words "21e, 21f and 21g" and § 8 (3) and (4) of Act No 395 / 2009 Coll., on significant market power in the sale and misuse of agricultural and food products, as amended, is rejected.

VI. In the rest, the author's proposal (b) to repeal Act No. 395 / 2009 Coll., on significant market power in the sale and misuse of agricultural and food products, as amended, is rejected.

VII. The competition authority is not an intervener in this proceeding.

Reasons

I.

Subject matter

1. On 7 September 2016, the Constitutional Court received a proposal from a group of 17 senators [hereinafter referred to as "the draftsman (a) '] to repeal Act No 395 / 2009 Coll., on significant market power in the sale and misuse of agricultural and food products, as amended by Act No 50 / 2016 Coll. (hereinafter referred to as" the Law on Significant Market Power' or "the contested Act '; These abbreviations shall be applied in relation to this law as well as in the version of the later laws, the wording in which the law was effective, if necessary, shall always be specified.) (a) the former Senator, Ing. Veronica Vrecion, was appointed to act for the appellant and the proceedings on this proposal were conducted under sp. zn.

2. On 30 June 2017, the Constitutional Court received the submission of another group of 17 Senators (hereinafter referred to as "the applicant (b) '), which was intended, on the one hand, as a reply to the parties' comments on the original application and, on the other hand, as a complement to the argument and extension of the original application. This new group of senators consisted of 10 senators who signed the original bill and 7 other senators. The mandate to act for this group was granted to Senator George Oberfalzer. This submission responded in the meantime to the adopted amendments to the Law on Significant Market Power, which were implemented by Act No. 104 / 2017 Coll. and Act No. 183 / 2017 Coll. In its conclusion, the proposal for the repeal of Act No. 395 / 2009 Coll., on significant market power in the sale and misuse of agricultural and food products, as amended, or the abolition of its Article 3a (a) in" the total of which must not exceed 3% of the annual revenues of the supplier for the last completed financial year of 12 months for food delivered to an individual customer in the year in which the financial performance occurred ', § 4 (2) of the introductory part of the provisions in the words "in particular', § 4 (2) (c), (d), (h) and (k), § 5a and § 7 (1) in the words" The exercise of supervision and management carried out by the Office under this Act '. Since it was a different proposal from another appellant, it initiated a separate procedure, which was conducted under sp. zn.

3. By order of 19 September 2017 No. Pl. ÚS 30 / 06-113, the Constitutional Court decided to combine the two proposals for joint proceedings. The purpose of this procedure is thus two proposals to abolish the Law on Significant Market Power, each referring to its wording effective in a different period of time. (b) by any proposal, the appellant seeks the annulment of only certain provisions of the contested law.

II.

Affected law

4. The Law on Significant Market Power was adopted in order to avoid abuse of significant market power in supplier-customer relations in the field of the purchase of food for resale and related services. According to Article 3 (1) of the Act, a significant market power is defined as a customer's position whereby a customer may, without a fair reason, impose an advantage on suppliers in connection with the purchase of foodstuffs or the acceptance or provision of services related to the purchase or sale of foodstuffs. In order to achieve that objective, the Act provides for a general prohibition on the abuse of significant market power, which it partially specifies, as well as certain other obligations of customers with significant market power. At the same time, it lays down rules on the supervision of compliance with this law and the offences which may be committed by customers in the event of infringement.

5. Although the Law on Significant Market Power was adopted in 2009 and became effective on 1 February 2010, its present wording differs significantly from that of the original. The amendment made by Act No. 50 / 2016 Coll. has made a substantial change to it, which has affected its entire content and structure. At least in part all the provisions of this law have been amended. The amendment redefined the definition of basic concepts, including the concept of significant market power, as well as the obligations of individual customers. Later, the law on significant market power was amended twice more. The amendment made by Act No. 104 / 2017 Coll. (part seven, Article IX) added to the contested Act new Sections 5a and 7a, which govern the authority of the Competition Authority (hereinafter referred to as "the Authority ') to carry out sectoral investigations and use data from information systems of public administration and specified and supplemented the wording of Section 7 (1) of the Law on Significant Market Power. The subsequent amendment carried out by Act No. 183 / 2017 Coll. (part hundred and ninety-sixth, Article CC) concerned mainly the definition of offences with regard to the adoption of Act No. 250 / 2016 Coll., on Liability for Infringements and Proceedings. Paragraph 5 (2) has been deleted from the contested law, Section 7 (2) and Section 8 (1), (2) and (3) have been partially amended or supplemented (including Section 8) and Section 8 (6) have been added. The latter amendment also changed the whole of § 9 and the insertion of § 9a.

6. Citations of the various provisions of the contested law will be included in other parts of this finding, in which their constitutional assessment will be carried out.

III.

Summary of the appellants' arguments

7. As mentioned above, the Constitutional Court reviews the Law on Significant Market Power in the present proceedings on the basis of two proposals for its annulment. However, it cannot be overlooked that the proposal subsequently was intended to supplement the appellant's proposal (a) and to extend its argument, with which the appellant (b) fully agreed. The appellant (a) could no longer make a new proposal, since in the meantime, the term of office of some of the senators who constituted it expired. In order to simplify the further text, the Constitutional Court will therefore consider the argument put forward as a common argument of the two appellants, unless their differentiation is useful in specific cases.

8. The appellants consider the law on significant market power to be of very poor quality, indeterminate and discriminatory law, which inadvertently interferes with the rights of the parties concerned. They consider that it maintains the overall imconceptual surveillance of the production and sale of food products, which remains in the hands of several state authorities. The contested law is accused of having a minimum application success and is aimed only at protecting suppliers against the bargaining power of trade chains. To this end, it imposes obligations only on customers, that is to say, one side of the supplier's customer relations, without solving any potential dominance on the supplier's side.

9. The various arguments of the appellants will be summarised and settled in detail in other parts of this finding, but it can be briefly stated that the appellants object

(a) the non-constitutionality of the procedure for the adoption of Act No. 50 / 2016 Coll. on the ground that it was to be drawn up in fact by the Office, which is to use the amended Law on Significant Market Power itself, as well as the non-constitutionality of the procedure for the adoption of Act No. 104 / 2017 Coll., under which the so-called legislative supplement was to be made to that Act on the amendment points, by which the new Section 5a is inserted into the Law on Significant Market Power and the amendment of Section 7 (1) is amended;

(b) the indeterminity of some of the concepts contained in the Law on Significant Market Power which obstructs its constitutionally consistent interpretation and application and constitutes a contradiction with the principle of nullum crimen sine specizcerta under Article 39 of the Charter of Fundamental Rights and Freedoms ("the Charter") and Article 7 of the Convention on the Protection of Human Rights and Fundamental Freedoms ("the Convention"), including the indeterminity of the very definition of the prohibition of abuse of significant market power under Article 4 (1), in conjunction with Article 3 (1) of the contested law, which is intended to make the prohibition of a demonstration of prohibited acts pursuant to Article 4 (2) of that Law,

(c) disproportionate interference in the ownership of customers and their right to do business, where the purpose pursued by the contested law can also be achieved through the general private law of unfair competition and public law contained in Act No. 143 / 2001 Coll., on the Protection of Competition and on the amendment of certain laws (Law on the Protection of Competition), as amended, ("the Law on the Protection of Competition"),

(d) the direct discriminatory effect of the law, which is manifested in a different treatment between customers with significant market power and suppliers with significant market power; and

(e) the indirect discriminatory effect of the Act, which, as a result of the application of the annual turnover criterion of CZK 5 billion pursuant to § 3 (4) of the contested law, from which the significant market power of the customer depends, is mainly affected by foreign trade chains,

whereas, in relation to individual sub-provisions, they object

(f) the excess and disproportionate limitation on the amount of all the monetary benefits of the supplier resulting from the mandatory requirement of the contract between the customer with significant market power and the supplier pursuant to Article 3a (a) of the contested law;

(g) the inadequacy of the prohibition on certain procedures for the negotiation and application of price terms used in the course of trade pursuant to Article 4 (2) (c) and (d) of the contested law;

(h) the inadequacy of the prohibition provided for in Article 4 (2) (h) of the contested law in order for the customer to request compensation of the penalties imposed by the inspection authority on the supplier without the existence of fault;

(i) the inadmissibility of the prohibition provided for in Article 4 (2) (i) of the contested law in order for the customer to negotiate with or apply to suppliers different contractual conditions for the purchase or sale of services related to the purchase or sale of foodstuffs in comparable transactions without a fair reason;

(j) the indeterminity of the obligation to respect the results of official controls on foodstuffs carried out by the national supervisory authorities by a customer pursuant to Article 4 (2) (k) of the contested law, which is to constitute a contradiction with the principle of ne bis in idem pursuant to Article 40 (5) of the Charter and may lead to the refusal of the judicial protection of customers contrary to Article 36 (1) of the Charter,

(k) the non-constitutionality of sectoral investigations pursuant to Article 5a of the contested law, in view of the inadmissibility of their involvement in the private sphere and the information self-determination of the parties concerned; and

(l) the indeterminity of the rules on the imposition of fines pursuant to Articles 8 and 9 of the contested law, creating a disproportionately wide margin of discretion for the administrative authority.

IV.

Proceedings before the Constitutional Court

10. The Constitutional Court, pursuant to Article 69 of Act No. 182 / 1993 Coll., on the Constitutional Court, as amended, (hereinafter referred to as the Law on the Constitutional Court), has gradually sent proposals by the appellants (a) and (b) to the chambers of Parliament (paragraph 1) and to the Government (paragraph 2) and the Ombudsman (paragraph 3) as the bodies entitled to intervene as interveners.

11. The Chamber of Deputies, in their observations of 20 October 2016 and 19 October 2017, and the Senate, in their observations of 19 October 2016 and 23 October 2017, signed by the then Presidents of the individual chambers of Jan Hamask and Milan Štách, summarised the course of the legislative processes under which the contested law was discussed and approved, as well as the amendment to Act No. 50 / 2016 Coll. and Act No. 104 / 2017 Coll.

12. On 17. 10. 2016, the Constitutional Court received, within the legally prescribed deadline, the notification by the Government of the entry into the proceedings, which the Government decided by order No 922 of 17. 10. 2016. The Government has ordered the Minister for Human Rights, Equal Opportunities and Legislation to produce a detailed statement of the Government in cooperation with the Minister for Industry and Trade and the President of the Office and to send it to the Constitutional Court. The Government then mandated the Minister of Industry and Trade to represent this proceeding. On the proposal of the appellant (a), the Government expressed its views extensively by letter dated 9 November 2016, signed by the then Minister for Human Rights, Equal Opportunities and Legislation Mgr. Jiří Dienstbier. As regards the appellant's proposal (b), by letter dated 18 October 2017, the Minister of Industry and Trade, Jiří Havlicek, MBA, commented on it on behalf of the Government. It stated that the Authority would send to the Constitutional Court, as amicus curiae, a statement that will also reflect the position of the Government, as it falls within its competence to protect business operators against abuse of a stronger market position.

13. The Ombudsman Mgr. Anna Shabatova, Ph.D., by letter dated 26 September 2016, informed the Constitutional Court that she was not taking advantage of her right to intervene in this proceedings. This position was maintained in a letter dated 11 October 2017, by which it responded to the appellant's proposal (b).

14. The Office proposed by letter of 5 October 2016, signed by its President, Mr Peter Rafaj, that the Constitutional Court should rule under Section 63 of the Law on the Constitutional Court, in conjunction with Section 93 of the Civil Code on its accession as an intervener. In addition, the Constitutional Court received a statement from the Office dated 3 November 2016 on the content of the appellant's proposal (a) sent by the Office as amicus curiae, the content of which is identical to that of the Government of 9 November 2016. By another letter of 17 October 2017, the Office commented on the appellant's extended proposal (b) and the additional arguments.

15. The original observations made by the chambers of Parliament, the Government and the Office in its proposal were widely expressed by the appellant (b). In this respect, it has already fulfilled its proposal and function as a replica. The appellant (b) made a submission by letter dated 23 March 2018.

16. Similarly to the arguments put forward by the appellants in their proposals, a summary of the various additional submissions, namely the observations of the Government and the Office and the replies of the appellant (b), will be included in the other parts of the finding.

17. In accordance with Article 44 of the Law on the Constitutional Court, the Constitutional Court has ruled in the matter without the oral hearing, since further clarification could not be expected from it.

V.

Application for the status of intervener

18. The Constitutional Court has not complied with the application of the Office to admit its intervention. In accordance with Article 28 (2) of the Law on the Constitutional Court, only those to whom that law confers the status of intervener are entitled in proceedings concerning the annulment of laws and other laws, that is to say, if the other conditions laid down by law are not fulfilled and if there is no waiver of the status of intervener - the Government (§ 69 (2)), the Ombudsman (§ 69 (3)) and an authorised appellant whose proposal was inadmissible on the ground that the Constitutional Court is already acting in the matter (§ 35 (2)). Paragraph 28 (2) of the Law on the Constitutional Court thus excludes the subsidiary application of § 93 (1) and (2) of the Civil Code (§ 63 of the Law on the Constitutional Court) to proceedings before the Constitutional Court, which means that the Constitutional Court is not entitled to rule on the admissibility of the intervening party to anyone else, which also applies to the Office [for example, the finding of 20.10.2004 sp. zn. Pl. ÚS 52 / 03 (N 152 / 35 SbNU 117; 568 / 2004 Coll.], the finding of 26.4.2006 sp.

19. However, this does not prevent the Constitutional Court from seeking its opinion or, where appropriate, taking into account the opinion sent by the Constitutional Court in the context of its assessment, in the light of the Authority's competence under the Law on Significant Market Power. In that case, however, it will only be an opinion sent by the Office as an amicus curiae, in which case it depends solely on the Constitutional Court whether it will consider it relevant for its decision or not [the finding of 22.1.2019 sp. zn. In the present case, the Constitutional Court took into account the position of the Office, which was also referred to by the Government in its observations and dealt with the arguments set out therein.

VI.

Proceedings before the Constitutional Court

20. First of all, the Constitutional Court examined whether all the legal procedural conditions for discussing the proposals of the appellants under Article 87 (1) (a) of the Constitution of the Czech Republic (hereinafter referred to as the Constitution) were fulfilled. In both cases, the condition for the design authorisation of a group of senators under Paragraph 64 (1) (b) of the Constitutional Court Act was fulfilled, as the proposal was signed by a minimum number of 17 senators. The two proposals clearly comply with all legal formalities (Section 34 of the Constitutional Court Act).

VI./a

Admissible to the appellant's proposal (a) and the reasons for the partial termination of the procedure

21. The applicant (a) submitted a proposal for the repeal of the law on significant market power, as amended by Act No. 50 / 2016 Coll. Since the amendment came into effect on 6 March 2016, it can be concluded that the proposal was directed against the contested law in a version which was valid and effective at the time of its submission, and therefore the reason for its inadmissibility under Paragraph 66 (1) of the Constitutional Court Law was not given. However, the contested law was subsequently amended by Act No. 104 / 2017 Coll. and Act No. 183 / 2017 Coll., as a result of which the question arose as to whether those amendments did not constitute a reason for the termination of the procedure under Paragraph 67 (1) of the Constitutional Court Act in the case of the provisions concerned. According to that provision, if the law, other legislation or individual provisions of which annulment is sought cease to apply before the end of the proceedings before the Constitutional Court, the proceedings shall be terminated.

22. According to the Constitutional Court, the reason for the termination of the procedure on the appellant's proposal (a) is manifestly given in the case of Sections 5 (2) and 9 of the Law on Significant Market Power, which were repealed by the amendment of Act 183 / 2017 Coll. and replaced as a whole by a new text.

23. In cases where, in the course of the proceedings before the Constitutional Court, the whole of the contested law or its provision has not been expressly annulled, but only a part of it, including by replacing some of its words, the assessment of whether there has been a reason for the termination of the procedure under Paragraph 67 (1) of the Constitutional Court Law is based on whether the amendment also entails a change in the content of the legal rules expressed by this legislation or its provisions as a whole. If such a change has taken place, that reason for the suspension may be extended to the whole of the legislation under appeal or its provisions (or to the wider separable part thereof, if only it is concerned), as amended before the amendment is effective, since they are no longer identical to their amended text and therefore are not part of their effective text (for example, the order of 26 September 2000 sp. zl. ÚS 35 / 2000 (U 33 / 19 SbNU 297)). Similarly, it will be an amendment to the whole of the contested legislation or its provision (or a wider part thereof) if the repealed part has been replaced by a new text, but it has not been possible to separate it from the rest of the legislation or its provision without the remaining text itself being passed as an expression of the law.

24. In relation to Article 7 (1) of the Law on Significant Market Power, as amended by Act No. 50 / 2016 Coll., the Constitutional Court states that the amendments made by Act No. 104 / 2017 Coll. in that provision the words "On the proceedings conducted by the Office on the abuse of significant market power 'have been replaced by the words" On the exercise of supervision and proceedings conducted by the Office under that Act'. This amendment, which extended cases in which the provisions of the Competition Act apply mutatis mutandis, concerns a part of that provision which cannot be separated from the rest of the provision. Therefore, the expiry took place at the time of the entry into force of Act No. 104 / 2017 Coll. not only in the scope of the provision cited in the previous version, which was replaced by a new text but in the scope of that provision as a whole. This provision could no longer exist separately without this remainder.

25. Furthermore, the Constitutional Court concluded that Paragraph 7 (2) of the Law on Significant Market Power, as amended by Act No. 50 / 2016 Coll., acknowledged the content changes by adding exceptions to the rule that the legislation on control will not apply to the procedure of the Office under this Act. Since the date of entry into force of Act No. 104 / 2017 Coll. This provision, as a whole, must be viewed in such a way that it no longer applies in the previous version. The same conclusion applies to Section 8 of the Law on Significant Market Power, as amended by Act No. 50 / 2016 Coll., even though the amendment made by Act No. 104 / 2017 Coll. merely replaces the word "administrative offence" (in the relevant number and fall) with the word "offence." This change did not only affect the designation of administrative offences, which are new offences, but also their legal definition, which followed the general regulation contained in the Act on Liability for Infringements and Proceedings [cf. the finding of 16.5.2018 sp. zn. In this case, too, this is a change which, as a result of which Article 8 of the Law on Significant Market Power, as amended by Act No. 50 / 2016 Coll., expired after the application for its annulment.

26. The reason for the termination of the procedure under Article 67 (1) of the Law on the Constitutional Court was therefore given in the case of the appellant's proposal (a) for the annulment of Sections 5 (2), 7, 8 and 9 of the Law on Significant Market Power, as amended by Act No. 50 / 2016 Coll.

VI./b

Admittance of the appellant's proposal (b)

27. The applicant (b) submitted a proposal for the repeal of the Law on Significant Market Power, as amended by Act No. 50 / 2016 Coll., Act No. 104 / 2017 Coll. and Act No. 183 / 2017 Coll., i.e. as effective as of 1 July 2017. Although this proposal was made on 30 June 2017 for the effectiveness of the previous legal regulation, the last two amendments were already published in the Collection of Laws on that day. Therefore, the proposal is not admissible because of its premature nature under Paragraph 66 (1) of the Constitutional Court Act. The fact that the proposal is directed against the contested law in the wording of all these amendments, although the text was not yet effective, does not consider the Constitutional Court to be disputed. It is clear from the content of the proposal that this argument reflects and responds to the amendments made by Act No. 104 / 2017 Coll. and Act No. 183 / 2017 Coll..

28. However, the appellant's proposal (b) is partially inadmissible because of the impediment to the proceedings initiated (litispendence) pursuant to Article 35 (2) of the Constitutional Court Act, since at the time of its submission, the Constitutional Court had already discussed the appellant's proposal (a) for the annulment of the law on significant market power, although the law was the subject of the proceedings in its earlier version. The obstacle to the proceedings initiated is given in relation to those provisions of the Law on Significant Market Power which have not been amended or supplemented by amendments made by Act No. 104 / 2017 Coll. and Act No. 183 / 2017 Coll. This concerns paragraphs 1, 2, 3, 3a, 4, 5 (originally Section 5 (1), which, after the repeal of paragraph 2 of the amendment made by Act No 183 / 2017 Coll. does not refer to paragraphs 1), 6, 10 and 11 of the Law on Significant Market Power.

29. In relation to the remaining provisions of the Law on Significant Market Power, as effective after the entry into force of its amendments implemented by Act No. 104 / 2017 Coll. and Act No. 183 / 2017 Coll., which are Sections 5a, 7, 7a, 8, 9 and 9a, none of the legal grounds for inadmissibility or termination of proceedings were given.

VI./c

Summary of the subject matter of the assessment

30. It is desirable to summarise at this point that the substantive assessment in the present proceedings is the law on significant market power, as effective from 1 July 2017, when its amendments made by Law 104 / 2017 Coll. and by Act 183 / 2017 Coll., with proceedings on the appellant's proposal being conducted in the scope of Sections 1, 2, 3, 3a, 4, 5, 6, 10 and 11 of the contested law (a) and in the scope of Sections 5a, 7, 7a, 8, 9 and 9a of the contested law.

VII.

Assessment of the competence and constitutional conformity of the procedure for the adoption of the contested legislative provisions

31. Before the Constitutional Court was able to assess the content of the law on significant market power with constitutional order, the Constitutional Court, as amended by Act No. 48 / 2002 Coll., addressed whether the contested law and its individual amendments had been adopted and issued within the limits of the Constitution laid down by competence and in a constitutional manner. In his assessment he also dealt with the arguments of the draftsmen which questioned the procedure for adopting Act No. 50 / 2016 Coll. and Act No. 104 / 2017 Coll.

VII./a

Arguments of the draftsmen

32. The appellants see a defect in the procedure of adopting Act No. 50 / 2016 Coll., which was amended by the Law on Significant Market Power, in that it was prepared by the Office. While it is customary for a sectoral central government body to prepare legislative changes in which it promotes government conceptual ideas, it cannot be overlooked in the case of the Authority that it is a senior administrative supervisory body which is relatively independent of government policy and which is bound only by laws and not by government resolutions. According to the appellants, it is therefore logical that this body's motivation will aim to protect and strengthen its control position, or to deepen the state's control and sanctions function, which will, however, be at the expense of its subordinate business entities. This "officially biased" character of the bill was to be offset by the test of legislative equilibrium. The requirements of this relatively independent central government body should have been objectivized, for example, through the advisory work of the Legislative Council of the Government. However, according to the draftsmen, this did not happen and the requested objectivization was not achieved even when discussing the amendment to the Act in the committees of the Chamber of Deputies. The amendment to the contested law thus inadequately strengthened the position of the Office and, on the other hand, reduced the defensive position of the bodies controlled.

33. The appellant (b) added in its proposal the grounds for questioning the way in which Paragraph 5a was inserted into the Law on Significant Market Power and the amendment of Paragraph 7 (1) of the Act by Amendment No 104 / 2017 Coll. These provisions became part of the law on the basis of a factually unrelated amendment to the Committee on Public Administration and Regional Development, which was also to be initiated by the Office. According to the appellant, (b) at first sight, the object of these provisions is to pass with the purpose of that law, which was to put it simply, to amend certain laws in the context of the management of public administration information systems. In both cases, they were therefore so-called legislative stickers, the inadmissibility of which was previously established by the Constitutional Court [finding of 15.2.2007 sp. zn. ÚS 77 / 06 (N 30 / 44 CollNU 349; 37 / 2007 Coll.)].

VII./b

Government observations

34. The Government opposed the allegation of the unconstitutionality of the adoption of those amendments to the Law on Significant Market Power. The legislative process was to be carried out in both cases in a standard manner. The fact that the Office was involved in the preparation of the law was justified by its position as a central body of the State administration, which covers both the promotion and protection of competition and the supervision of compliance with the law on significant market power. It is the Authority that has the most knowledge of how legal regulation is reflected in the practical functioning of supplier-customer relations in the area of the sale and purchase of agricultural and food products. This was not an attempt to strengthen its influence, but rather to ensure that cases of abuse of the market power of consumers vis-à-vis food suppliers were more effective. Moreover, the draft law, which was later declared Act No. 50 / 2016 Coll., has made substantial changes in the course of its discussions in the Chamber of Deputies on the basis of parliamentary amendments.

VII./c

Observation of the Competition Authority

35. On the appellant's objections (b) in relation to the procedure for the adoption of Act No. 104 / 2017 Coll. also the Office expressed its views in detail. In his view, the appellant (b) should have challenged this law and not the amended or inserted provisions of the law on significant market power. In his view, this practice stems from the decision-making practice of the Constitutional Court [finding of 31.1.2008 sp. zn. (b) However, the appellant cannot be accepted in substance. Infringement of the principle of the consistency of the law (as stated in the finding in the sp. zn. That is not the case with the contested law. Paragraph 5a of the Law on Significant Market Power was proposed as part of a broader amendment to the draft law proposed by the Public Administration and Regional Development Committee as the Guarantee Committee of the Chamber of Deputies under the so-called Comprehensive Amendment. The aim of this amendment was to regulate a greater range of social relations, as evidenced by the fact that, as a result, up to 8 laws were eventually amended instead of the initially intended four laws. Unlike the amendments made at the second reading of the draft law, this amendment did not restrict the possibility of a House debate. It is not relevant, however, that the reasons for its submission are not reflected in the explanatory report, which thus does not constitute a sufficient picture of the legislator's intention. In addition, the Office is suspended from considering that the appellant (b) does not contest the way in which Article 7a of the contested law was adopted, which became part of the amendment made by Law 104 / 2017 Coll. as a result of the same amendment.

VII./d

Replication of the appellant (b)

36. In response to the Office's observations, the appellant (b) noted that the Office, such as amicus curiae, should comment only on the substantive effects of the law. Nevertheless, the Office takes the role of an obvious defender of the law in its observations and in the procedure for its adoption, an area where the argument from the Chamber of Deputies and the Senate, or the Government, is more appropriate. In the case of the finding of sp. zn. Pl. ÚS 24 / 07, the material link of the legislation adopted by one complex law was important for the rejection of the proposal, but this is not the case with the amendment to the Law on Significant Market Power implemented by Law 104 / 2017 Coll. is not the case. The original proposal for this amendment was intended to address the issue of the functioning of the public administration information systems and the use of information from them, namely the material related to the extension of the contested Act on § 7a, but not to the regulation of the investigative powers of the Office. According to the appellant (b), its proposal to abolish Article 5a and Article 7 (1) in the words "The exercise of supervision and proceedings by the Office under this law" of a significant market power law is therefore still justified.

VII./e

Background to the review of the constitutionality of the legislative procedure

37. In the case of the contested law and its amendments, Parliament's competence to adopt it pursuant to Article 15 (1) of the Constitution is clearly given. In addition, the Constitutional Court addressed the procedure for their adoption in terms of whether the constitutional procedure laid down in the legislative procedure has been maintained in terms of the participation of individual constitutional bodies in it and whether the required majority of Members or Senators voted in favour of the draft laws in each chamber of Parliament. It is a fact for which the breach of the constitutional rules would without further doubt the very legitimacy of the law itself and which must therefore be assessed in the proceedings for the annulment of laws or other laws [the finding of 27.11.2012 sp. zn. ÚS 1 / 12 (N 195 / 67 SbNU 333; 437 / 2012 Coll.], paragraph 178].

38. On the contrary, the Constitutional Court does not examine the way in which the draft law was drawn up before the legislative process was initiated, namely who and to what extent was involved in it and whether the government proposals were followed in their preparation in accordance with the legislative rules of the Government. It is not a constitutional rule and therefore the possible participation of persons other than the appellants in the preparation of a draft law or a possible breach of the legislative rules of the Government are not in themselves capable of establishing the inconstitutionality of the law [cf. the finding of 18.8.2004 sp. zn. Pl. ÚS 7 / 03 (N 113 / 34 SbNU 165; 512 / 2004 Coll.) or the finding of 13.12.2016 sp. zn. Pl. ÚS 19 / 16 (N 237 / 83 SbNU 677; 8 / 2017 Coll.), paragraph 56].

39. The contested law also includes provisions that have been adopted on the basis of proposals from the appellants of the content of an unrelated amendment, and it is in this fact that their inconstitutionality is seen. The Constitutional Court notes that the power to submit an amendment, which emits, expands or amends certain parts of the original proposal, pursuant to Article 63 (1) (5) and Article 92 (1) of Act No. 90 / 1995 Coll., on the Rules of Procedure of the Chamber of Deputies, as amended by Act No. 265 / 2014 Coll., hereinafter referred to as "the Rules of Procedure of the Chamber of Deputies', in the case of negotiations on a draft law, is for Members or a guarantee committee or other committee to which the draft law has been ordered. The limits of that authorisation must be interpreted, on the one hand, in accordance with the requirements of the principle of predictability, clarity and internal consistency of the law expressed in the rule of law pursuant to Article 1 (1) of the Constitution (in particular, the finding of sp. zn. ÚS 77 / 06 and the finding of sp. zn. Pl. ÚS 24 / 07), on the other hand, the requirements of free or free competition of political forces representing one of the components of the democratic state, which are expressed in particular in Article 5 of the Constitution and in Article 22 of the Charter [to that effect in particular of 1.3.2011 sp. sp. zn. Pl. ÚS 53 / 10 (N 75 / 61 SbNU. These principles give rise to requirements in relation to the content of the amendments as well as the way in which they are applied or discussed.

40. The purpose of the amendment pursuant to Articles 63 (1) (5) and 92 (1) of the Rules of Procedure of the Chamber of Deputies is in line with its close relationship with the draft law under discussion. The amendment should not deviate from the material covered by this proposal by its content (details of the sp. zl. ÚS 77 / 06). However, the role of the Constitutional Court is not to protect the legality of parliamentary procedure. The inconstitutionality of the law as regards the procedure for its adoption does not constitute the very fact that part of it has been adopted on the basis of an amendment which does not meet that content requirement. It is essential whether this procedure has made it impossible to make the draft law subject to a genuine assessment and discussion by Parliament, including the participation of a parliamentary minority (Sp. zn. This would be the case in cases of so-called extreme systemic inconsistency, where the content inconsistency of the draft law - as amended by the amendment adopted - would make it merely a formal carrier of changes to the rule of law. In addition, the inconstitutionality of the law could arise from the fact that by adopting an amendment in the very conclusion of a legislative process which would deviate from the material covered by this proposal in the absence of sufficient time, it would be impossible to assess and discuss it properly (as would be the case in the case of an unreasonably declared state of legislative emergency, see the finding of the SPR 55 / 10 and the finding of the SPR 53 / 10). Any major amendment, as is the case with the so-called comprehensive amendments [cf. the finding of 6 October 2010 sp. zn. Pl. ÚS 39 / 08 (N 207 / 59 SbNU 3; 294 / 2010 Coll.)], or the amendment complementing the subject of the legal regulation will, however, stand as constitutionally conformal if sufficient space has been created during the legislative process to discuss it. This must not be a surprising change that the parliamentary minority, in particular, cannot become acquainted with and cannot comment on in the negotiations.

VII./f

Self-assessment of the constitutionality of the procedure for the adoption of the contested law and its amendments

41. The Constitutional Court has examined the procedure for the adoption of the Law on Significant Market Power and all its existing amendments. First, he assessed whether the draft laws concerned the two chambers of Parliament in the Constitution of the prescribed sequence, whether those laws were approved by the necessary majority of Members and Senators, and whether the President of the Republic had the opportunity and, where appropriate, the right to return those laws. It was based on the parties' comments and publicly available information on the legislative process.

42. The draft law on significant market power in the sale of agricultural and food products and its abuse (Chamber of Deputies, 5th parliamentary term, 2006-2010, House of Press 431) was submitted by Members JUDr. Michal Hašek, Ing. Petr Zgarba, Ing. František Novosad, Ing. Václav Grüner, CSc., Ing. Ladislav Skopal and Ing. Josef Černánský Chamber of Deputies on 21 February 2008. The Chamber of Deputies approved it at the third reading on 15 May 2009 at its 56th meeting (Resolution 1223), when 78 of the 141 Members present voted for it, 58 opposed and 5 abstained. The Senate discussed the bill (Senate, 7th term, 2008-2010, Senate Press No. 86) at its 8th session on 17 June 2009 and returned it to the Chamber of Deputies with amendments (Resolution No 217). 49 of the 63 senators present voted in favour, 14 abstained. The Chamber of Deputies of 9 September 2009, at its 60th meeting, approved the bill as approved by the Senate (Resolution 1344). 103 of the 180 Members present voted in favour, 59 opposed and 18 abstained. The adopted law was delivered to the President of the Republic on 14 September 2009, who did not sign it and returned it to the Chamber of Deputies on 25 September 2009. The Chamber of Deputies subsequently insisted on the original bill (Resolution 1454). The vote on the law returned by the President of the Republic took place on 3 November 2009 at its 64th meeting (Resolution 1454), with 106 out of 179 Members voting in favour, 63 opposed and 10 abstentions. The Act was published in the Collection of Laws on 13 November 2009 in amount 128 under No 395 / 2009 Coll.

43. The draft law amending Act No. 395 / 2009 Coll., on significant market power in the sale and misuse of agricultural and food products (Chamber of Deputies, 7th Election, 2013- 2017, House Press 444) was submitted by the Government to the Chamber of Deputies on 31 March 2015. The Chamber of Deputies approved it at its 36th meeting of 9 December 2015 at the third reading (Resolution No 993), with 131 out of 182 Members voting for it, 41 opposed and 10 abstentions. The Senate discussed and approved the bill (Senate, 10th term, 2014- 2016, Senate Press No. 174) at its 18th meeting on 13 January 2016 (Resolution No. 323). 51 of the 67 senators present voted in favour, 10 opposed and 6 abstained. The Law adopted was delivered on 21 January 2016 to the President of the Republic who signed it. The Act was published in the Collection of Laws on 5 February 2016 in the amount of 17 under No. 50 / 2016 Coll.

44. The draft law amending Act No. 365 / 2000 Coll., on Information Systems of Public Administration and on the amendment of certain other laws, as amended, Act No. 181 / 2014 Coll., on Cybersecurity and on the amendment of related laws (the Act on Cyber Security), and certain other laws, (Chamber of Deputies, 7th Election, 2013- 2017, House Press 852) submitted to the Chamber of Deputies on 28.6.2016. It was approved by the Chamber of Deputies at its 54th meeting on 3 February 2017 at the third reading (Resolution 1553), when 131 of the 148 Members present voted for it, 17 abstained. The Senate discussed and approved the bill (Senate, 11th term, 2016- 2018, Senate Press No. 58) at its 5th session (Resolution No. 105) on 8 March 2017. 53 of the 63 senators present voted in favour, 12 abstained. The law adopted was delivered on 15 March 2017 to the President of the Republic who signed it. The Act was published in the Collection of Laws on 5 April 2017 in the amount of 39 under No. 104 / 2017 Coll.

45. The draft law amending certain laws in connection with the adoption of the Act on Liability for Infringements and Proceedings and the Act on certain Infringements (Chamber of Deputies, 7th Election, 2013- 2017, House Press 929) was submitted by the Government to the Chamber of Deputies on 5 October 2016. The Chamber of Deputies approved it at its 56th meeting on 7 April 2017 at the third reading (resolution 1624), with 119 out of 169 Members voting for it, 18 opposed and 32 abstentions. The bill (Senate, 11th terms of office, 2016- 2018, Senate Press No. 125) was referred to the Senate on 9 May 2017, but the Senate did not adopt any resolution to it within 30 days, as a result of which the bill was adopted. The law adopted was delivered on 9 June 2017 to the President of the Republic who signed it. The Act was published in the Collection of Laws on 28 June 2017 in an amount of 66 under No 183 / 2017 Coll.

46. Since the abovementioned constitutional requirements were met for all four laws, the Constitutional Court further assessed the appellants' objections relating to individual amendments or amendments, respectively. The Constitutional Court does not consider the objection that the draft law, which was subsequently declared Act No. 50 / 2016 Coll., was drafted by the Office. It is a matter of law promoter, how he drew up his proposal. There is no constitutional requirement that draft law be drawn up without the participation of other bodies than the promoters, or, on the contrary, with the participation of more bodies balancing each other.

47. To the appellant's assertion (b) that § 5a and § 7 (1) in the words "The exercise of supervision and procedures conducted by the Office under this Act" were adopted as an unconstitutional legislative adjunct, the Constitutional Court notes that the relevant amendment points have become part of the draft Act, which was later declared as Act No. 104 / 2017 Coll., on the basis of an amendment to the Committee on Public Administration and Regional Development. While it can be accepted that the regulation of sectoral investigations and the exercise of supervision under the Law on Significant Market Power was not the subject of a government draft law, the amendment of the Guarantee Committee does not constitute the so-called extreme systemic arbitrage, nor can it be considered surprising in the light of the legislative process. It was approved by the Guarantee Committee at its 49th meeting on 16 November 2016, so Members had it at their disposal two and a half months before the third reading of the bill. The amendment in question (designated as A5) was adopted in the third reading of 3 February 2017 by votes 134 of the 146 Members present, with 12 abstentions. The Constitutional Court therefore found no reason for which the Law on Significant Market Power or any of its amendments should be adopted contrary to constitutional order.

VIII.

Legal definition of prohibition of abuse of significant market power

48. The Constitutional Court considers, at the outset, the assessment of the substance of the law on significant market power with constitutional order to be useful in citing paragraphs 1 to 4 of that law, which contain the definition of the purpose of the law, the definition of the concept of significant market power and the concepts of the concept of relevant market power (in particular the supplier, the customer, the purchasing alliance) and the very prohibition of abuse of significant market power. Paragraph 3a of the law on significant market power sets out the terms of the contract between the customer with significant market power and the supplier. Those provisions, including the footnotes, read as follows:

„§ 1

(1) This Act provides for:

(a) the method of assessing and avoiding misuse of significant market power in connection with the purchase of foodstuffs for resale on the territory of the Czech Republic or the services related to such purchase or sale of foodstuffs;

(b) supervision of compliance with this law.

(2) Under this law, the abuse of significant market power, which was carried out abroad, is also assessed if its effects have occurred or may occur in the Czech Republic.

§ 2

Definition of certain terms

For the purposes of this Act:

(a) by the supplier, where he sells foodstuffs for resale or receives or provides services related to the sale of foodstuffs;

(b) by the purchaser, the entrepreneur or the purchasing alliance referred to in (c), where they purchase foodstuffs for resale or receive or provide services related to the purchase of foodstuffs; the customer is also considered to be the customer who provides such purchase or service to another customer under a command-type contract;

(c) buying alliances between groups of customers, arising from a contract, other legal action or other legal fact which provides cooperation between customers in connection with the purchase of foodstuffs for the purpose of resale or the reception or provision of services related thereto, or which have been established for the purpose of such cooperation, irrespective of whether or not that grouping has a legal personality;

(d) a food or a product defined as a food directly applicable by European Union1).

1) Regulation (EC) No 178 / 2002 of the European Parliament and of the Council of 28 January 2002 laying down the general principles and requirements of food law, establishing the European Food Safety Authority and laying down procedures in matters of food safety.

§ 3

Significant market power

(1) Significant market power is a customer's position whereby a customer may, without a fair reason, impose an advantage on suppliers in connection with the purchase of food or the acceptance or provision of services related to the purchase or sale of food.

(2) Significant market power shall be assessed in particular with regard to the structure of the market, barriers to entry and the financial strength of the customer.

(3) Where the customer is an entrepreneur who provides for the purchase of food or services related to the purchase or sale of food for another customer under a command-type contract, its significant market power shall be assessed together with the status of the customer for which it operates.

(4) Significant market power is deemed to have:

a) a customer whose turnover for the sale of food and services related thereto in the Czech Republic exceeds CZK 5 billion for the last completed financial year of 12 months,

(b) a customer who is a controlled person whose turnover for the sale of food and services related to it in the Czech Republic does not exceed CZK 5 billion for the last completed financial year of 12 months if its turnover for the sale of food and services related to it in the Czech Republic together with the turnover for the sale of food and services related to it in the Czech Republic exceeds CZK 5 billion for the last completed financial year of 12 months; or

c) a shopping alliance where the combined turnover of its members for the sale of food and services related to it in the Czech Republic exceeds CZK 5 billion for the last completed financial year of 12 months.

§ 3a

Forms of the contract

A contract between a customer with significant market power and a supplier shall be negotiated in writing and shall include, in addition to essential parts:

(a) the method of payment of the purchase price and the period for payment of the purchase price, the amount of the discount on the purchase price or the method of determination, if provided, and the payment of the purchase price may not exceed 30 days from the date of receipt of the invoice, the amount of all the supplier's cash performance, the total of which may not exceed 3% of the supplier's annual sales for the last completed financial year of 12 months for food delivered to the individual customer in the year in which the financial performance took place;

(b) the time or method of its determination for the delivery of the object of the purchase and for the determination of its quantity for the specified period or the determination of the quantity of the individual supply of the object of the purchase;

(c) where services related to the purchase or sale of foodstuffs are accepted and provided, the means of cooperation in their reception and provision in the scope, extent, manner and time of performance, price or destination;

(d) the period of guaranteed validity of the purchase price which may not exceed 3 months from the date of the first delivery of the food for which the purchase price was agreed;

(e) the manner in which the debt is transferred which is governed by the relevant provisions of the Civil Act.

§ 4

Prohibition of abuse of significant market power

(1) Abuse of significant market power is prohibited.

(2) The abuse of significant market power is in particular:

(a) the negotiation or application of contractual terms which create a significant imbalance in the rights and obligations of the Contracting Parties;

(b) the negotiation or acquisition of any payment or other performance for which a service or other consideration has not been provided or is disproportionate to the value of the consideration actually paid;

(c) the application or acquisition of any payment or discount the amount, object and extent of which has not been agreed in writing prior to the supply of food or services to which the payment or discount relates;

(d) the negotiation or application of price conditions whereby the tax document for payment of the purchase price for the supply of foodstuffs will not contain the final amount of the purchase price after any discounts agreed on the purchase price, except for pre-agreed quantitative discounts;

(e) the negotiation or application of payments or other consideration for the acceptance of foodstuffs for sale;

(f) the negotiation or application of the maturity of the purchase price of foodstuffs longer than the period referred to in Article 3a (a);

(g) the negotiation or application of the right to return purchased foodstuffs, except for a material breach of the contract;

(h) requesting compensation for penalties imposed by the inspection authority on the supplier without the existence of fault;

(i) discrimination against a supplier consisting of the negotiation or application of different contractual terms for the purchase or sale of services related to the purchase or sale of foodstuffs in comparable transactions, without a fair reason;

(j) carrying out an audit or other form of inspection of the supplier by the customer or by the natural person or legal person authorised by him at the expense of the supplier, including requiring food analyses at the expense of the supplier; or

(k) failure to respect the results of official controls on foodstuffs carried out by the authorities of the state control (2) by the customer.

2) Act No. 110 / 1997 Coll., on Food and Tobacco Products and amending and supplementing certain related laws, as amended. '

49. It should be added to the cited text of the law that the breach of the obligations of customers with significant market power pursuant to Sections 3a and 4 of the contested law constitutes the substance of the infringements under Section 8 thereof. At the same time, it may have consequences in relation to the validity of private-law arrangements which would be infringed due to the absence of one of the mandatory requirements of contracts between customers with significant market power and suppliers.

50. The prohibition of abuse of significant market power is the essence of the contested law, with the possible inconstitutionality of its definition affecting the remaining provisions governing the supervision of its compliance and defining the facts of the infringements, taking into account the substance of the interdependence. Thus, the assessment of the constitutionality of the contested law as a whole depends primarily on the assessment of the constitutionality of the prohibition on the abuse of significant market power, as a result of which the Constitutional Court first addressed the question of the certainty of that prohibition and, in view of the objections raised, its compliance with the right of customers to engage in business under Article 26 (1) of the Charter and its possible direct or indirect discriminatory effect.

IX.

Certain prohibition of abuse of significant market power

51. As with any other legal obligation, the Constitutional Court examined whether the prohibition of abuse of significant market power pursuant to Article 4 (1), in conjunction with Article 3 of the Law on Significant Market Power, meets the requirements of certainty and predictability of the law resulting from the rule of law under Article 1 (1) of the Constitution and which are always applicable in the imposition of obligations under Article 4 (1) of the Charter. The question is whether the customers covered by this prohibition could already have anticipated the illegality of certain acts within the framework of supplier-customer relations on the basis of the wording of the law on significant market power and could therefore be required to refrain from such negotiations. In the case of Paragraph 4 (2) of the contested law, the Constitutional Court had to answer in this context the question of the admissibility of a demonstrative list of cases of abuse of significant market power, which is expressed in the introductory part of that provision by the word "in particular '.

IX./a

Arguments of the draftsmen

52. The appellants consider that the definition of the substantive scope of the Law on Significant Market Power and a number of its provisions do not meet the constitutional requirements of clarity, certainty, clarity and predictability of the law. Not only does it use a number of indeterminate terms (for example, a product, goods and a product that actually denotes the same thing, which in practice may not be understood at all), but it does not respect the terms introduced in the Civil Code. Instead, it introduces new concepts that do not fall within the legislative framework of the Czech Republic and lead to uncertainty on the part of the parties to legal relations. Uncertainties also concern the definition of the facts of the offences.

53. One of the provisions against which those objections are directed is Paragraph 4 (1) of the Law on Significant Market Power, which contains the General Clause that abuse of significant market power is prohibited. According to the appellants, the limits of the term "abuse" are difficult to define and the law does not give any guidance, which allows the Authority to make any interpretation of the relevant provision. However, even if the interpretation that only acts falling under one of the specific facts referred to in Article 4 (2) were to be affected, given the correlation between that provision and Article 3 (1), it would be necessary to establish the inconstitutionality of the entire Article 4 of the Law on Significant Market Power.

IX./b

Government observations

54. Unlike the draftsmen, the government is convinced of the possibility of a constitutionally consistent interpretation of the contested law. In its view, the possible uncertainty of some of its provisions is below the intensity which would exclude the possibility of interpreting them using the usual interpretation procedures. The indeterminity of some terms that characterized the original text of the Act and affected its applicability was removed by the amendment made by Act No. 50 / 2016 Coll. Its aim was to clarify the legal regulation, thereby strengthening the state of legal and factual certainty as to the scope of the permitted or prohibited conduct. As to the objection that the contested law does not respect the concepts introduced in the Civil Code and uses a notation that does not fall within the legislative framework here, the Government pointed out that it is an unspecific claim. At the same time, she added that, although the inconsistency of the terminology used is an obvious fact in the Czech legal order, it is not itself a reason to repeal the legislation itself.

55. As regards the uncertainty raised, the Government stated that the general rule, which is further set out in other legal provisions, was expressed in the General Clause. It is the same category of terms as good faith or fair trade, that is to say, those which allow natural rights to be exercised when applying a positive right. The rules of administrative or competition law cannot be applied without any further principle of criminal law, where the facts of the offences need to be defined relatively precisely in accordance with the principle of subsidiarity of criminal repression and ultima ratio. One of the fundamental differences is that, given the lower social harm of administrative offences compared to criminal offences, the use of indefinite legal terms is generally acceptable in the field of administrative law.

56. The general definition of general clauses is an integral part of competition law and the regulation of social relations by it. The purpose of competition law, whether private or public, is to eliminate market failures, which, given the diversity of market relations, necessarily requires the universality of legal regulation. According to the Government, this concept is accepted not only by the doctrine, but also by the decision-making practice of the Constitutional Court [finding of 29.5.1997 sp. zn. III. ÚS 31 / 97 (N 66 / 8 SbNU 149)] and the administrative courts (judgment of the Supreme Administrative Court of 3.10.2008 sp. zn. 7 Afs 40 / 2007). The question of the possibility of defining the facts of administrative offences by means of blank legal standards is not justified, as Article 4 of the contested law does not contain any provision referring to a statutory law.

IX./c

The appellant's reaction (b) and the amendment of the proposal

57. The appellant (b) responded to the Government's observations. It is aware that a comparison with the Law on the Protection of Competition is offered where there is a prohibition on abuse of significant market power. It also defines the prohibition of abuse of dominant positions in the form of a general clause supplemented by a demonstration of possible forms of implementation. This is where the similarity ends. The apparent broad definition of the substance of the abuse of a dominant position is limited and specified by the material condition that the abuse in question must "be against the detriment of other competitors or consumers," as well as the general materiality of the offences in the competition section, which requires the sanctioned conduct to distort or threaten to distort competition and, last but not least, rich Czech and Union case law relating to the relevant issue. On the other hand, the contested law does not provide such limits on the concept of abuse of significant market power. This is all the more true because the amendment made by Act No 50 / 2016 Coll. has deleted the requirement that the conduct sanctioned under the Law on Significant Market Power should have the objective or result of "a significant distortion of competition in the relevant market '. The deletion of this requirement raises serious doubts as to whether that law can be considered as a competition law law at all.

58. The description of the lack of legal regulation resulting from a high degree of uncertainty would, hypothetically, be bridged by an interpretation that would be regarded as an abuse of significant market power only by those negotiations which fall under one of the specific factual elements under Paragraph 4 (2) of the Law on Significant Market Power. However, this would have to be a taxative list and not a demonstration list. In the event that the Constitutional Court would not comply with the application for annulment of the law on significant market power as a whole, (b) the appellant proposed the annulment of at least some provisions, including the word "in particular 'in the introductory part of Paragraph 4 (2) of the contested law, in which it sees a breach of the principle of nullum crimen sine specizcerta. By deleting this word, the list of special facts would lose its demonstrative character and thus define more specifically what is meant by abuse of significant market power.

IX./d

Observation of the Competition Authority

59. The Office also commented on the appellants' objections that the law does not fulfil the constitutional guarantee of nullum crimen sine specie. In his view, it is quite clear from the General Clause what features must be established in order to enable the Authority to establish that the customer has significant market power. There is also clearly a prohibition on abuse of this position. The wording of the General Clause, including a demonstrative list of facts, was essentially taken from the Competition Act. It is not true that, contrary to the abuse of a dominant position which must be detrimental to other competitors or consumers, there is no material correction for the abuse of significant market power and that there is no limit to the disproportionately broad concept of "abuse of significant market power." Section 3 (1) of the contested law must also be seen as part of the general clause. It is a fair reason and the possibility of imposing benefits on suppliers is a material correction. The Office shall identify and demonstrate the fulfilment of both of these characteristics in the administrative procedure.

60. In order to provide a demonstration of the facts, the Authority stated that, like in the field of competition, all unfair commercial practices cannot be adequately covered by the precise calculation of the facts in the law. In this way, the contested law, in its original version, included a number of comprehensive annexes. However, the reality was that customers who abused their market power were able to react flexibly to a strict list of practices by applying new practices, not specified in the law. This is also why the amendment to the law has given way to the "slave" listing of unfair business practices and has only defined in the law the most serious circuits of unfair business negotiations. It can only be added that there is nothing vague about the facts thus formulated, on the contrary they include the most common unfair commercial practices that occur in the food sector. The Office does not have a problem with defining the correct conduct of administrative proceedings. Demonstrative lists of prohibited dominant practices have been enshrined in the Competition Protection Act since 2001, when the Act became effective and has not yet been repealed. If there is no non-constitutional list of facts, then it is not clear why the non-constitutional list of facts in the Law on Significant Market Power should be a non-constitutional list of facts.

61. The Office does not agree that, by deleting the word "in particular" from Article 4 (2) of the Law on Significant Market Power, it will become a demonstrative list of facts definitive and complete. While, in practice, the use of existing and formulated facts is generally taking place, a situation where the unfair commercial practice applied for some reason does not exactly fit into the facts foreseen by the law cannot be excluded. As a result of the removal of the word 'in particular', it would not be possible for the Office to penalise its application and to remedy the malfunction.

IX./e

Replication of the appellant (b)

62. The appellant (b) believes that the Office's observations in a number of aspects confirm the indeterminate and ambiguous nature of the contested law. It is recalled that the Office's somewhat surprising claim that the suspicion of potential abuse of significant market power may be waived by the customer if it proves that he had a fair reason to act. From the point of view of the principles of administrative punishment, it is hardly acceptable for a suspect in an administrative offence to prove facts about his innocence. In addition, the "fair ground 'criterion is totally inadmissible in the context of imposing sanctions on administrative offences, because the assessment of justice depends on a number of subjective circumstances that are beyond their aprioric knowledge from the perspective of potentially responsible bodies. In this context, the appellants cannot imagine that the criterion of" justice "of certain conduct or conduct would be used as part of the definition of the facts of criminal offences under the Criminal Code. There are no fundamental differences between criminal or administrative penalties in terms of the principles of such penalties.

63. It cannot be accepted by the Authority's claim that a very vague general clause of abuse of significant market power contained in Paragraph 4 (1) of the contested law qualifies the definition of that position itself in its § 3 (1). This definition does not make further prohibited negotiations available to the addressees of the contested law. It merely specifies a certain qualified position which defines the personnel scope of this law, namely that only a customer with significant market power can commit the offences imposed by it. Therefore, when deciding whether a customer has committed an infringement, the Authority should proceed by first establishing whether it has significant market power under Article 3 of the contested law. Only then should it prove whether one of the facts of the offences has been fulfilled. However, if, according to the Office, the law is in fact designed to "return" to the definition of significant market power under Paragraph 3 (1) of the Act, then, according to the appellant (b), it is not a constitutional conformity solution. The law thus formulated does not allow its addressees to determine what action is allowed and what sanctions can be imposed.

64. If the Office advocates the constitutionality of the legislative solution chosen by reference to the alleged similar competition law, the appellants have already explained in their proposal how much the situation is different in the case of that law. First of all, rich Czech and EU case-law sufficiently narrows the extent of the facts of abuse of a dominant position. The classification of this substance by material elements which are injury to competitors or consumers and distortion of competition is also sufficiently specific. However, the same does not apply to abuse of significant market power, which is to be qualified by the absence of a fair reason and by the imposition of an advantage. The assessment of a fair reason may differ in the case of individual potentially defective negotiations. Indeed, it is difficult to estimate what constitutes a fair reason in relation to each particular negotiation. In principle, by imposing an advantage, it is only generally possible to indicate the conduct which Article 4 (2) of the contested law prohibits in individual specific facts. But there is no specific additional qualifying condition.

65. (b) According to the appellant, the Office, in its observations, admits that, in particular, it depends on its desire to deal with the conduct of the contested law. Having regard to the principle of enumerativity of public law as referred to in Article 2 (3), However, it is totally unacceptable for a public authority to extend its scope by interpreting it, particularly if it is about the possibility of imposing criminal penalties for offences. The Office itself emphasised the need for an extensive interpretation of the prohibition of abuse of significant market power indicates the conceptual inconstitutionality of the contested law. It is the same as if the penal code defined crimes by "especially" about what or what to do.

IX./f

Self-assessment

66. The Constitutional Court points out that, subject to the law referred to in Article 4 (1), The Charter must always be laid down by law and comply with the essential requirements of the rule of law under Article 1 (1) of the Constitution. These include requirements for clarity and certainty of the law [the finding of 24.5.1994 sp. zn. Pl. ÚS 16 / 93 (N 25 / 1 SbNU 189; 131 / 1994 Coll.)] and for its predictability, clarity and internal inconsistencies [for example, the finding of 12.2.2002 sp. zn. Pl. ÚS 21 / 01 (N 14 / 25 SbNU 97; 95 / 2002 Coll.) or the finding of sp. zn. Pl. ÚS 77 / 06, paragraph 36].

67. The indeterminity of legal concepts is not unusual in the legal system and essentially results from the abstract and regulatory nature of legal standards. It does not create the inconstitutionality of legislation itself. However, if the law provides for a certain obligation, it is necessary that the degree of uncertainty of the law does not prevent it from being available to its addressees by virtue of the text of the law, using the usual methods of interpretation of the laws [cf., the finding of 28 February 1996 sp. zn. The disclosure of a particular rule of conduct does not mean that this rule must always be explicitly expressed in each of its component parts in the law. It is sufficient that the addressee may deduce it from the general legal obligation expressed, for example, in view of his status as an expert carrying out a particular activity.

68. Paragraph 4 (1) of the Law on Significant Market Power prohibits abuse of significant market power. In order to assess the certainty and predictability of this prohibition, the legal definition of the concept of "significant market power 'contained in Article 3 (1) of that law, according to which a significant market power constitutes" a customer's position', whereby a customer may, without a fair reason, impose an advantage on suppliers in relation to the purchase of foodstuffs or the acceptance or provision of services related to the purchase or sale of foodstuffs'. This clarification is necessary since the concept of "significant market power 'is in itself so vague that otherwise it would not be possible with sufficient certainty to derive its content, even though the concept of market power is also used in another law, namely § 10 (1) and (2) of the Competition Act, where there are also facts relevant to its assessment.

69. It follows from that legal definition that only the customer can have significant market power within the meaning of the contested law and therefore only he can commit abuse. In order to assess the "significance 'of market power, the ability to achieve a prohibited consequence is determined, which means the ability of the customer to" impose "unilaterally" an advantage "on suppliers without a fair reason'. Since significant market power is generally defined as the ability of the customer to achieve that effect by acting," abuse "of significant market power can be seen precisely in the behaviour that would result in that effect. Another interpretation of" abuse "of significant market power does not have the necessary basis in its definition. In fact, it is up to Article 3 (1) of the Law on Significant Market Power, which defines in general what is meant by abuse of Significant Market Power. In doing so, significant market power defines the possibility of abuse. Paragraph 4 (1), in conjunction with Article 3 (1) of the Law on Significant Market Power, provides for a general prohibition on customers from imposing an advantage on suppliers in connection with the purchase of food or the acceptance or provision of services related to the purchase or sale of food without a fair reason.

70. The material characteristics which should allow the addressees to distinguish between the prohibited conduct and refrain from it are the already mentioned "enforcement" of the "advantages" and the absence of "fair cause." In both cases, these are vague terms. The familiarity of their obligation to refrain from certain practices towards customers must be assessed in the light of the status of customers as experts in the purchase or sale of foodstuffs. The basis for assessing whether an advantage imposed without a fair reason can be seen in a particular act is thus commercial practices and principles of fair trade [§ 7 and 1801 of the Civil Code, § 3 (2) (d) of the Competition Act], as well as a general prohibition on the abuse of economic status to create or exploit the dependency of the weaker party (§ 433 of the Civil Code). In accordance with Article 3 (2) of the Law on Significant Market Power, the conclusion that the customer was in a position to enforce an advantage without a fair reason must take into account in particular the market structure, barriers to entry and the financial strength of the customer. According to Article 3 (3) of the Act, the significant market power of an entrepreneur must be assessed together with the status of the customer for whom it provides the purchase of food or services related to the purchase or sale of food for another customer under a contract of command-type.

71. The general definition of significant market power is further specified by the presumption that Article 3 (4) of the Law on Significant Market Power, according to which it has significant market power, simply put, the customer whose turnover for the sale of food and services related to it on the territory of the Czech Republic, calculated either separately or, if the controlled person, together with the turnover of the controlling person, exceeds CZK 5 billion for the last completed financial year of 12 months. In the case of a purchasing alliance, this value shall exceed the combined turnover of its members. The turnover criterion thus defined should be considered as part of the definition of significant market power which allows customers to determine whether they are subject to obligations under the contested law. It provides sufficient details as to which customers are obliged to ensure that contracts concluded by them with suppliers are required under Article 3a of this Act. At the same time, the negotiations referred to in § 4 (1) as well as in the various sub-paragraphs of § 4 (2) of the contested law are prohibited precisely and only in cases where the customers are subject to that turnover criterion. Only then will such conduct be an abuse of significant market power.

72. The application of Paragraph 4 (1), in conjunction with Paragraph 3 of the Law on Significant Market Power as the general facts of the infringement, obviously envisages a restrictive approach, and therefore cannot be affected as an offence by an act whose assessment, in terms of the material characteristics mentioned, would prevent the requirement of predictability of the law, for example in view of the long-term examination of certain practices in supply and customer relations in the decisions of the Office or its interpretative opinions or decisions of administrative courts. However, the assessment of a particular act is already a matter of the constitutionally consistent application of the legal regulation, which can be achieved precisely with respect for the abovementioned interpretations. It is not the role of the Constitutional Court to foresee at this point various cases of infringement of Paragraph 4 (1) of the Law on Significant Market Power. The space to comment on specific cases shall remain in the case of proceedings concerning a constitutional complaint against decisions of public authorities in which that provision will be applied.

73. Therefore, the Constitutional Court did not find the unconstitutional insecurity to prohibit the abuse of significant market power, as defined in Section 4 (1) in conjunction with Section 3 of the Law on Significant Market Power. For the same reasons, such uncertainty cannot be seen in the application of the word 'in particular' in § 4 (2) of the introductory part of the provisions of this law. The abuse of significant market power may also be an act which cannot be substitutable to one of the specific facts defined in the various subparagraphs of Paragraph 4 (2) of the Law on Significant Market Power. The provisions of Articles 3, 4 (1) and 4 (2) of the Introductory Part of the provision in the word "in particular 'of the contested law do not contradict the requirement of certainty and predictability of the law under Article 4 (1) of the Charter and Article 1 (1) of the Constitution.

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Regulation Information

Citation	The Constitutional Court found no 254 / 2020 Coll., on the proposals for annulment of Act No 395 / 2009 Coll., on significant market power in the sale and misuse of agricultural and food products, as amended
Regulation Type	The Constitutional Tribunal found
Author	-
Collection	Code of Laws

Date of Promulgation	27.05.2020
Effective from	-
Effective until	-
Status	Valid

Legal Areas: Economic (State) Administration of state (national) property Administrative law Agriculture

The regulation text is for informational purposes only.