News

Skils successfully represented Baby Direkt before the Supreme Administrative Court in the matter of the so-called vertical price fixing

By its judgment of November 6, 2023, the Supreme Administrative Court upheld an earlier judgment of the Regional Court in Brno, by which the Regional Court annulled without ordering a hearing the decision of the Chairman of the Office for the Protection of Competition (the Office), by which a penalty of CZK 40,793,000 was imposed on Baby Direkt for the alleged vertical price fixing, due to serious defects in such a decision.

Based on the argumentation of Skils, the Supreme Administrative Court confirmed the correctness of the conclusions of the Regional Court in Brno in their entirety when it stated same as the Regional Court that the Chairman of the Office must identify each alleged individual price agreement already in the verdict of the decision. At the same time, he is also obligated to prove the coincidence of will as the basic characteristics of the agreement for each such an agreement, which the Chairman of the Office failed to do in the case of Baby Direkt. His decision was thus found to be unlawful by the court. In this case, the Office originally imposed the highest penalty in history for a practice such as vertical price fixing (so-called RPM) at the very limit of the statutory maximum. Now, the Supreme Administrative Court has also confirmed the cancellation of such penalty.

The significance of the judgment of the Supreme Administrative Court goes beyond the case in question, because it has potential to contribute to a change in the Office’s approach to punishing RPM from a conceptual point of view, as it confirms that the Office must prove the existence of individual agreements. Therefore, it is not possible anymore to prosecute these agreements across the board as a kind of unilateral “practice”, which was recently, however, the prevailing approach of the Office with respect to sanctioning such agreements.

The Supreme Administrative Court’s ruling is also reported by Czech media, such as iDNES.cz.