Harmonization of Slovak Competition Act with EU regulation

The Act No. 204/2004 Coll. dated March 9, 2004 published in Collection of Laws of the Slovak Republic (hereinafter also as "the amendment") amends the presently valid Competition Act in a significant way.

The main aim of the new amended law is to reflect the latest changes in Community law, namely in Council Regulation 1/2003 which modernizes antitrust policy and rules. Further changes were necessary in the area of group exemptions from prohibition of cartel agreements and merger regulation.

Moreover, the amendment deals with some legal definitions which, the practice showed, have to be clarified in a more precise way in order to avoid interpretation problems.

The latest changes of Slovak competition law implemented by the Act No. 204/2004 Coll. can be briefly summarized as follows:

National Competition Authority in Slovakia and Extension of its Powers

National competition authorities and courts of member states are obliged to implement Article 81 and 82 of the EC Treaty in cases when cartel agreements or abuse of a dominant position may influence the trade between the member states.

The amendment stipulates that the national competition authority in Slovakia in connection with the fulfilment of tasks stemming from Regulation 1/2003 as well as from other regulations is the Anti-Monopoly Office of the Slovak Republic and in this respect it extends the powers of this body.

Individual Evaluation of Cartel Agreements

The amendment has implemented a new regime of evaluation of cartel agreements. Based upon this new regime the entrepreneur himself evaluates the respective agreement and its conformity with the law.

The legal institute of an individual exemption from cartel agreements as well as so-called negative attest cease to exist and therefore, the Slovak competition authority has no more authorization to issue decisions in this respect.

Group Exemptions from Cartel Agreements

As far as the group exemptions from cartel agreements are concerned, the new amendment regulates this area in the same manner as the Community regulation. Therefore, the terms regulating the group exemptions in EU law are valid also for cartel agreements which may not influence the trade between the member states and lead or may lead to a restriction of competition only on the domestic – Slovak – market.

The Slovak regulation of group exemptions from cartel agreements, namely the respective provisions of the Act on Group Exemptions from the Prohibition of Agreements Restricting Competition No. 465/2002 Coll. dated June 20, 2002, cease to be in force as of May 1, 2004.

The Slovak competition authority will continue to have the competence to withdraw the advantage of a group exemption in individual cases if it finds out that a cartel agreement has negative competition consequences.

A New Type of Decision of Slovak Competition Authority

The amendment implements a new type of decision of Anti-Monopoly Office of the Slovak Republic. An entrepreneur may submit to the competition authority a proposal of his obligations which might solve the respective competition problem. These obligations may be subject to the decision issued by competition authority if they solve competition concerns in a satisfactory way.

Merger Regulation

As far as the merger regulation is concerned, the amendment changes the criteria for merger notification.

An important change introduced by the amendment is the exclusion of the market share threshold which was confusing due to the possibility to define the respective relevant market differently.

Another important change in merger regulation is the increase of respective thresholds.

The amendment also replaces the legal regulation of simplified proceedings by another regulation which allows the entrepreneurs to submit to the competition authority a limited amount of information in certain justified cases.

Additionally, the amendment contains some improvements /specifications relating to the decision making process regarding mergers.

Sanction Policy and Leniency Programme

The amendment strengthens the sanction policy of Slovak competition authority as well as changes the leniency programme.

(The sanction policy of the Anti-Monopoly Office of the Slovak Republic was very indulgent in the past and the Slovak Republic was subject to certain criticism on the side of EU in this respect.)

Further changes

Due to the previous interpretation problems in the practice of Slovak competition authority, the amendment specifies the definition of parties to a merger which was not presented in the Competition Act in a satisfactory manner.

Based upon the experience of Anti-Monopoly Office of the Slovak Republic, the amendment also extends the reasons for suspension and termination of proceedings.

Another important change implemented by the Act. No. 204/2004 Coll. is the amendment of the Slovak Civil Procedure Code - the Act No. 99/1963 Coll. in its valid wording. The amendment gives the respective court the power to grant the approval with the inspection in buildings, premises and cars of an entrepreneur and his representatives and employees by the European Commission or competition authority.

The amendment also enables the European Commission as well as the Anti-Monopoly Office of the Slovak Republic to make statements in certain proceedings before the respective court. Moreover, the amendment implements an obligation of the respective court to announce the commencement of proceedings relating to Article 81 or 82 of the EC Treaty to the Anti-Monopoly Office of the Slovak Republic. According to the amendment the court is also obliged to send to the European Commission and to the Anti-Monopoly Office of the Slovak Republic a decision by which the Articles 81 or 82 of the EC Treaty were applied.

The Act No. 204/2004 brings along some changes to the Act No. 145/1995 Coll. on Administrative Fees, namely to the part regarding competition. The amendment introduces a flat fee of SKK 100,000 for a merger notification.

The Act No. 204/2004 is in agreement with the Constitution of the Slovak Republic, other laws and international treaties and documents by which the Slovak Republic is bound. The conformity of the Act No. 204/2004 Coll. with the law of EU is regulated in the compatibility clause.