Act No 359 / 2022 Coll.
Act amending Act No 395 / 2009 Coll., on significant market power in the sale and misuse of agricultural and food products, as amended
Valid
Effective from 01.01.2023
Text versions:
01.01.2023
30.11.2022
359
THE LAW
of 10 November 2022
amending Act No 395 / 2009 Coll., on significant market power for the sale and misuse of agricultural and food products, as amended
Parliament has decided on this law of the Czech Republic:
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., Act No. 104 / 2017 Coll., Act No. 183 / 2017 Coll., the Constitutional Court's finding, published under No. 254 / 2020 Coll., Act No. 261 / 2021 Coll. and Act No. 417 / 2021 Coll., is amended as follows:
1. In the title of the law, the words "and unfair commercial practices' and the words" and its abuse 'are inserted after the words "on significant market power'.
2. paragraphs 1 to 3a, including the headings and footnotes 1 shall read:
Preliminary provisions
(1) This law implements the relevant European UnionRegulation (1) and provides for
(a) the way in which the assessment and avoidance of unfair commercial practices by customers with significant market power in the agricultural and food chain,
(b) the formalities and form of contract between the customer with significant market power and the supplier;
(c) supervision of compliance with this law.
(2) Under this law, unfair commercial practices are assessed regardless of where they were carried out and regardless of the applicable law of the contract between the customer with significant market power and the supplier if their effects have occurred or may occur in the Czech Republic.
Definition of certain terms
For the purposes of this Act:
(a) by a supplier, a person or an alliance of suppliers, where he produces or sells agricultural products or food products, or receives or provides services related to the sale of agricultural products or food products ("related services"); the supplier is also the person who provides the sale, production or related services to another supplier under contract;
(b) by a customer, a person or an alliance of customers, when buying agricultural products or food products, or receiving or providing related services, or a person who provides such purchase or related services to another customer under contract; the customer is also the State, the local authority, another legal person governed by public law or their association,
(c) an alliance between suppliers of groupings of persons resulting from a contract, other legal action or other legal fact which ensures cooperation between suppliers in connection with the production or sale of agricultural products or food products or the acceptance or provision of related services, or has been established for the purpose of such cooperation, whether or not the grouping has a legal personality;
(d) by alliances of customers of groups of persons arising from a contract, other legal action or other legal fact which ensures cooperation between customers in connection with the purchase of agricultural products or food products or the reception or provision of related services, or has been established for the purpose of such cooperation, whether or not the grouping has a legal personality;
(e) agricultural and food products, products listed in Annex I to the Treaty on the Functioning of the European Union, and products listed in this Annex but processed for use as food using the substances, products or goods listed in this Annex,
(f) agricultural and perishable products of agricultural or food products which, by their nature or at their stage of processing, could become unfit for sale within 30 days of harvesting, production or processing.
Significant market power
(1) It has significant market power
(a) a customer whose annual turnover exceeds EUR 2 000 000 against a supplier whose annual turnover does not exceed EUR 2 000 000;
(b) a customer whose annual turnover exceeds EUR 10 000 000, against a supplier whose annual turnover exceeds EUR 2 000 000 but does not exceed EUR 10 000 000;
(c) a customer whose annual turnover exceeds EUR 50 000 000 against a supplier whose annual turnover exceeds EUR 10 000 000 000 but does not exceed EUR 50 000 000;
(d) a customer whose annual turnover exceeds EUR 150 000 000 against a supplier whose annual turnover exceeds EUR 50 000 000 000 but does not exceed EUR 150 000 000;
(e) a customer whose annual turnover exceeds EUR 350 000 000 against a supplier whose annual turnover exceeds EUR 150 000 000 000 but does not exceed EUR 350 000 000; or
(f) a customer to whom the State is a State, a territorial unit, another legal person governed by public law or an association thereof, against a supplier whose annual turnover does not exceed EUR 350 000 000.
(2) It also has significant market power
a) customer whose annual turnover in the Czech Republic exceeds 5 billion CZK,
b) a customer who is a controlled person whose annual turnover on the territory of the Czech Republic does not exceed CZK 5 billion if its turnover together with the turnover of the controlling person exceeds CZK 5 billion, or
c) a shopping alliance where the combined turnover of its members in the Czech Republic exceeds CZK 5 billion.
Annual turnover
(1) The annual turnover referred to in Article 3 is the annual turnover over the last completed financial year of 12 months.
(2) The calculation of the annual turnover of the customer or supplier shall be based on the annual turnover of the undertaking, the independent undertaking, the partner undertaking and the linked undertaking in accordance with Commission Recommendation 2003 / 361 / EC of 6 May 2003 concerning the definition of micro, small and medium-sized enterprises.
(3) For the purposes of determining the method of calculating the annual turnover referred to in paragraph 1:
(a) any person carrying out an economic activity, irrespective of his legal form, by undertaking;
(b) an independent undertaking an undertaking which is not a partner undertaking as referred to in (c) or a linked undertaking as referred to in (d);
(c) partner undertakings all undertakings which are not linked undertakings as referred to in (d) and which have a relationship in which the parent undertaking itself or jointly with one or more linked undertakings owns a share or shares representing a share of the capital of a subsidiary of at least 25% or with which at least 25% of the voting rights of the subsidiary is associated; an undertaking shall be considered as independent even if investors reach or cross that threshold, unless they are individually or jointly linked to the undertaking concerned under point (d);
(d) linked undertakings are undertakings between which there is any of the following:
1. the undertaking is a member of another undertaking and the majority of voting rights are attached to its share or shares in that other undertaking;
2. the undertaking has the right to appoint or withdraw a majority of the members of the administrative, management or supervisory body of another undertaking;
3. the undertaking has the right to exercise decisive influence in another undertaking under a contract concluded with that undertaking or under provisions in the founding act; or
4. an undertaking which is a member of another undertaking may assert a decisive influence in that other undertaking by exercising a majority of the voting rights in that undertaking as a result of negotiations with other members;
investors shall be deemed not to exercise a decisive influence if they are not directly or indirectly involved in the management of the undertaking, without prejudice to their rights as members; undertakings whose relationships are made through one or more other undertakings or through one of the investors referred to in point (e) shall also be considered as linked undertakings; undertakings having one or more of those relationships through a natural person or through a group of natural persons acting in agreement shall be considered as connected undertakings if they carry out their activity or part of their activity on the same market or on markets immediately downstream or prior;
(e) by an investor
1. a public investment company, a venture capital company, an individual or group of individuals engaged in a normal venture capital investment activity investing equity capital in unlisted undertakings, provided that their total investment in the same undertaking does not exceed EUR 1 250 000;
2. university or non-profit research centre;
3. an institutional investor, including regional development funds; or
4. a municipality with an annual budget of less than EUR 10 million and less than 5 000 inhabitants.
(4) The annual turnover of the supplier or buyer alliance shall be the sum of the annual turnover of all alliance members.
(5) The annual turnover shall be determined as the sum of the sales made by the undertaking during the 12-month accounting year from the sale of products and services and for the sale of goods ("sales'). The annual turnover does not include value added tax.
(6) For the purpose of determining the annual turnover of an undertaking in an uncompleted financial year, the annual turnover for the last financial year ended shall be that of 12 months immediately preceding the uncompleted accounting year.
(7) In the case of newly created enterprises with an uncompleted accounting period of 12 months, the data used for the calculation shall be derived from estimates made in good faith following the results of the activity in the uncompleted accounting period.
(8) In the case of foreign undertakings, the annual turnover shall be determined from the accounts or similar financial statements processed by undertakings under foreign law. For the calculation, the data best suited to the calculation referred to in paragraph 5 shall be used. If such data are not available, the annual turnover may be determined by other appropriate means, including estimates.
(9) The annual turnover of an independent undertaking shall be determined solely on the basis of the sales of that undertaking.
(10) The annual turnover of partner or interconnected undertakings shall be determined on the basis of the financial statements and other data of all partner or interconnected undertakings or on the basis of consolidated financial statements, if any.
(11) In the case of partner undertakings, the annual turnover of the undertaking shall be increased by the annual turnover of each partner undertaking in proportion to the percentage of the capital or voting rights, depending on which of the values is higher. For mutual ownership, a higher percentage is determined.
(12) In the case of linked undertakings, the annual turnover of the undertaking shall be increased by 100% of the annual turnover of each undertaking which is directly or indirectly linked to the undertaking.
(13) The foreign exchange market rate declared by the Czech National Bank on the last day of the accounting year to which the annual turnover relates shall be used for the purposes of the conversion of currencies.
(14) When negotiating a contract pursuant to Article 3b, the collector and the supplier shall, at the request of the other Party, provide each other with information on their annual turnover. The State, the territorial unit, another legal person governed by public law or their association shall not provide the information referred to in the first sentence.
(1) Directive (EU) 2019 / 633 of the European Parliament and of the Council of 17 April 2019 on unfair commercial practices between undertakings in the agricultural and food chain. ';
3. The following Section 3b is inserted after Section 3a:
Form and formalities of the contract
(1) A contract between a customer with significant market power and a supplier whose object is the purchase, sale, processing or distribution of agricultural products or food products, or the receipt or provision of related services, or the brokering of any of these activities, requires a written form, must be concluded before the supply or processing of agricultural products or food products or the acceptance or provision of related services and must also include:
(a) the price, the amount of the discount on the price or the way in which it is determined, where provided, the method of payment of the price and the time limit for payment of the price, which may not exceed 30 days from the date of receipt of the invoice; Paragraph 1964 of the Civil Code shall apply mutatis mutandis,
(b) if the purchase, the purchase and the determination of the quantity for the period specified or the determination of the quantity of each supply of the purchase;
(c) the specification of the related service, if agreed, which is accepted or provided in terms of subject and scope, including the price for or the method of determining the service, the method of payment, the maturity of the service and the cost estimate and the basis on which the customer with significant market power has reached such an estimate; and
(d) the specification of the buying-in action, if agreed, the estimated quantity of agricultural products or food products covered by the buying-in action, including the purchase price for those products or products and the duration of the buying-in action.
(2) The SMP collector shall transmit to the supplier at least one copy immediately after the conclusion of the contract.
(3) Selector with significant market power and supplier may negotiate a maturity period longer than that referred to in paragraph 1 (a) where:
(a) agree on provisions on value-sharing within the meaning of Article 172a of Regulation (EU) No 1308 / 2013;
(b) the payment made by the supplier in the framework of a school project pursuant to Article 23 of Regulation (EU) No 1308 / 2013;
(c) is a payment made by a public law legal person providing health services; or
(d) it is a payment made under a supply contract between a grape supplier or partially fermented grape must for the production of wine and its direct customer with significant market power, provided that:
1. the specific payment terms relating to sales are contained in the model contracts which have been made binding by the Member State in accordance with Article 164 of Regulation (EU) No 1308 / 2013 before 1 January 2019, provided that the validity of this extension of the scope of the model contracts is renewed by the Member States from that date without any significant change in the payment terms to the detriment of suppliers of grapes or partially fermented grape must; and
2. contracts between suppliers of grapes or partially fermented grape must for the production of wine and their direct customers with significant market power shall be concluded for a period of more than 1 year or shall last for more than 1 year. ';
4. Sections 4 and 5, including the headings, read:
Unfair commercial practices
(1) Unfair commercial practices between customers with significant market power and suppliers are prohibited.
(2) The unfair commercial practice of a customer with significant market power is
(a) the negotiation or application of contractual terms which create a significant imbalance in the rights and obligations of the Contracting Parties to the detriment of the supplier;
(b) the application or acquisition of payment, discount or other performance, the amount, object and extent of which has not been agreed in writing prior to the start of the supply or processing of agricultural products or food products or by the provision of related services to which payment, discount or other performance relates or no reasonable remuneration has been paid for such payment, discount or other performance;
(c) unequal treatment of a supplier consisting of the negotiation or application of different contractual conditions for the purchase or sale of agricultural products or food products or for the provision of related services in comparable transactions, without a fair reason;
(d) arbitrary modification of the contractual terms and conditions for the purchase or sale of agricultural products or food products relating to the frequency, manner, place, timing or quantity of individual supplies, quality standards, payment terms or prices or conditions of the related services provided, as well as arrangements enabling such amendment;
(e) the tying of consent to the conclusion of a contract for the purchase or sale of agricultural products or food products or the provision of related services on the condition of the purchase of further supplies;
(f) non-compliance with the written form of the contract or non-compliance with the mandatory requirements of the contract pursuant to Article 3b (1) or (3), or non-transmission of one copy of the contract to the supplier pursuant to Article 3b (2);
(g) requiring payment or other transactions not related to the purchase or sale of agricultural products or food products or to the provision of related services, or which are disproportionate to the value of the services provided;
(h) a threat or the application of retaliation measures where the supplier of a customer with significant market power makes use of his contractual or legal rights;
(i) the unauthorised acquisition, use or disclosure of the supplier's business secrets by a customer with significant market power;
(j) the negotiation or application of a price condition whereby the tax document to cover the price for the purchase or sale of agricultural products or food products or the provision of related services does not include the final amount of the price after any discounts agreed on that price, except for pre-agreed quantitative discounts;
(k) the negotiation or application of the payment deadline for the purchase or sale of agricultural products or food products longer than that referred to in Article 3b (1) (a);
(l) the conclusion or application of a penalty compensation imposed by the supervisory authority on customers with significant market power from the supplier without the supplier causing the imposition of a penalty by violating its obligation;
(m) carrying out an audit or other form of control of the supplier by a customer with significant market power or by persons authorised by him, including requiring analyses of agricultural products or food products at the expense of the supplier;
(n) the conclusion or application of payment or other performance for deterioration or loss of agricultural products or food products which have not been caused by a breach of the obligations of the supplier, after having taken over or transferred ownership of an agricultural product or a food product by a customer with significant market power,
(o) cancellation of an order for agricultural or perishable food products in less than 30 days before the date of delivery;
(p) the conclusion or application of compensation for the costs of investigating a consumer's complaint concerning agricultural products or food products, without any misconduct by the supplier;
(q) the negotiation or exercise of the right to return purchased agricultural products or food products, without paying a customer with significant market power for or for the disposal of agricultural products or food products,
(r) the negotiation or application of payment or other performance for the placing on the market of agricultural products or food products, including the negotiation or application of payment or other performance for the storage of agricultural products or food products, their inclusion in, or making available on the market;
(s) the conclusion or application of payment or other performance for the construction or technological adaptation of premises for the sale of agricultural products or food products;
(t) false indication of the country or place of origin of agricultural products or of food products or of the country or place of origin of one or more ingredients of an agricultural product or of a food product which accounts for more than 50% of that product or product;
(u) a requirement that the supplier pay in whole or in part the cost of discounts on agricultural products or food products sold by the customer in the framework of the promotion action of the customer, unless the customer has specified a period before the start of the promotion action and indicates the estimated quantity of products to be ordered at a discount; or
(v) making supplies conditional on the use of third party services, the conditions and price of which shall be determined by the customer.
(3) Where, before the start of the supply of agricultural products or food products or the provision of related services, the conditions for their supply or provision have not been agreed in writing, the unfair commercial practice of a customer with significant market power shall also be considered to be:
(a) the conclusion or application of a payment or other payment for the total or partial reimbursement of the costs of the discount on agricultural products or food products sold by the customer in the framework of the promotion;
(b) the conclusion or application of payment or other performance for advertising on agricultural or food products provided by the customer; or
(c) the negotiation or application of payment or other performance for personnel ensuring that the premises for the sale of agricultural products or food products are adapted.
Supervision of compliance
(1) The Office for the Protection of Competition (hereinafter referred to as the Office) is responsible for overseeing compliance with the law.
(2) The Office shall issue an annual report on its activities under this Act and publish it accordingly. The annual report shall include, in particular, the number of complaints received, the number of administrative proceedings initiated and the number of administrative proceedings completed, including a description of the case and the outcome of the proceedings. The Office shall send the annual report to the European Commission by 15 March each year. ';
footnotes 2 and 3 are deleted.
5. In Paragraph 5a (1), the words "the Office shall establish facts indicating infringement of this law 'shall be replaced by the words" the market situation indicates the use of unfair commercial practices' and the word "the Office 'shall be inserted after the word" the Office'.
6. In Article 6 (1), the words "for abuse of significant market power 'are replaced by the words" for infringement of this law'.
7. In Article 6, the following paragraph 2 is inserted after paragraph 1:
"(2) The Office shall publish its final decisions issued under this Law on its website."
Paragraphs 2 to 4 shall become paragraphs 3 to 5.
8. In Article 6 (3), the word "decision 'shall be replaced by" can decide'; the words "abuse of significant market power 'shall be replaced by the words" infringement of law'; the words "in such a decision the Office may 'shall be replaced by the words" in the operative part of the decision to terminate proceedings shall indicate those commitments and may' and the words "not find the proposed commitments sufficient 'shall be replaced by the words" shall not decide to terminate proceedings'.
9. in § 6 (4), § 6 (5) of the introductory part of the provision and in § 6 (5) (a) and (b), "paragraph 2" is replaced by "paragraph 3."
10. in Article 6 (5) (c), the words "in accordance with paragraph 3" shall be inserted after the word "decision."
11. in Article 6a, the word "unlawful" is replaced by "defective."
12. in Article 7 (2), the words "with the exception of Articles 21c (3) and 22b (7) and (9)" shall be deleted;
13. in Paragraph 8 (1), the words "having significant market power" shall be replaced by "having significant market power."
14. in Article 8 (1) (a):
"(a) apply unfair commercial practice pursuant to Article 4 (2) and (3),"
15. in Paragraph 8 (1) (b), "2" is replaced by "3," or "3."
16. in Paragraph 8 (1) (c), the word "or" shall be replaced by a dot and point (d) shall be deleted;
17. in Article 8 (3), the words "achieved by the customer" shall be replaced by the words "customers with significant market power," the words "12 months" shall be inserted after the words "period" and the words "achieved by a legal or natural person" shall be replaced by the words "that person."
18. in Article 8 (4) (a), the words "with significant market power" shall be inserted after the word "customers" and the words "12 months" shall be inserted after the word "period."
19. in Article 8 (4) (b), the words "purchasing alliance" are replaced by the words "customer alliance" and the words "12 months" are inserted after the words "period";
20. In Article 8 (5), the words "the purchasing alliance, its members shall be liable for payment of the fine imposed jointly and severally" shall be replaced by the words "the alliance of customers or its members, each member shall be liable for payment of the fine imposed up to 10% of its net turnover for the last completed 12-month period."
21. In Article 8 (6), the words "with significant market power" shall be inserted after the words "customers" and after the words "customers."
22. in Article 9, paragraphs 1 and 2 are deleted;
Paragraphs 3 to 9 shall become paragraphs 1 to 7.
23. In Paragraph 9, the following sentence is added at the end of paragraph 1: "To this end, the Authority shall adopt initiatives. The Office shall, after preliminary examination of the case, inform the complainant that it has initiated the procedure or that it has found no grounds for initiating the procedure on its own initiative. ';
24. in Paragraph 9 (2), the words "Article 2 (a)," shall be deleted, the words "must be justified and" shall be inserted after the first sentence, the words "the Office shall decide on the application for confidentiality of identity by a resolution" shall be inserted and the words "the identity of the defendant shall not be kept secret."
25. Paragraph 9 (3) reads:
"(3) The Office may, without initiating an infringement procedure under this law, postpone the case by way of an order after preliminary examination if, in view of the importance and the degree of breach or threat to the protected interest which has been affected by the proceedings, the manner in which the proceedings were carried out, the consequences thereof, the circumstances in which the conduct of the hearing was committed, or the conduct of the suspect following the hearing makes it clear that the purpose which could be achieved by carrying out the infringement proceedings has been achieved or can be otherwise achieved."
26. in Article 9 (5), the words "in the Czech Republic" shall be deleted;
27. in Article 9 (6), "§ 24 to 27, § 29 (c), § 32" is replaced by "§ 26," "§ 39 (a) and (b)" is deleted, "text" 43, "" § 76 (1) (i) and (l) "is replaced by" § 76 (1) (l), "" § 82 (1), first sentence, "and" § 88 (1) and (2), "is deleted.
28. in Article 9a (4) (d), the words "Commission or competition authority or other supervisory authority of a Member State" shall be replaced by the words "supervisory authority of another Member State of the European Union";
29. In Article 10, the words "12 months' shall be added at the end of the text of paragraphs 1 and 2.
30. The following Sections 10a and 10b are inserted after Section 10:
International cooperation
(1) The Authority shall provide the supervisory authority of another Member State of the European Union or of the European Commission with synergies in the investigation or proceedings concerning unfair commercial practices conducted to enforce rules preventing the use of unfair commercial practices. In providing synergies, the Office shall act in a similar manner as in exercising supervision under this Act.
(2) The Authority shall cooperate with the supervisory authorities of the Member States in order to discuss and harmonise the procedures for rules preventing the use of unfair commercial practices.
Silence
A person in a service, employment or other similar relationship, on the basis of which he / she carries out an activity for the Office in which he / she becomes aware of the facts constituting the subject of the trade secret, the identity of the classified person or the confidential information, shall be obliged to remain silent about them, even after the termination of that relationship. ';
Transitional provisions
1. Contracts concluded before the date of entry into force of this Act, the formalities of which are contrary to Act No. 395 / 2009 Coll., as effective from the date of entry into force of this Act, shall bring their Contracting Parties into conformity with Act No. 395 / 2009 Coll., as effective from the date of entry into force of this Act, no later than 12 months after the date of entry into force of that Act.
2. Proceedings initiated under Act No. 395 / 2009 Coll., as effective before the date of entry into force of this Act, shall be completed and the rights and obligations relating thereto shall be assessed under Act No. 395 / 2009 Coll., as effective before the date of entry into force of this Act.
3. If the Czech text of Commission Recommendation 2003 / 361 / EC of 6 May 2003 concerning the definition of micro, small and medium-sized enterprises is not published in the Official Journal of the European Union on the date of entry into force of this Act, it shall be published by the Ministry of Industry and Trade by a communication in the Collection of Laws. If the English version of Commission Recommendation 2003 / 361 / EC of 6 May 2003 on the definition of micro, small and medium-sized enterprises in the Official Journal of the European Union is published in the Official Journal of the European Union after the entry into force of this Act, the Ministry of Industry and Trade shall give notice thereof by means of a communication in the Collection of Laws.
Efficacy
That law shall take effect on the first day of the second calendar month following its publication.
Pekarová Adamová v. r.
Zeman v. r.
Fiala v. r.
Sign in for notes, favorites and notifications
Regulation Information
| Citation | Act No 359 / 2022 Coll., amending Act No 395 / 2009 Coll., on significant market power in the sale and misuse of agricultural and food products, as amended |
|---|---|
| Regulation Type | - |
| Author | - |
| Collection | Code of Laws |
| Date of Promulgation | 30.11.2022 |
|---|---|
| Effective from | 01.01.2023 |
| Effective until | - |
| Status | Valid |
Parliamentary Paper:
Paper No. 174
The regulation text is for informational purposes only.
Comments 0