Abuse of market power – recent developments

21 July 2010

Miloslav Sinfeld

As we informed you in our April Food Law Digest, a new Act on the significant market power in the sale of agricultural products and groceries and on its abuse ("Act") took legal effect on 1 February 2010.

By defining the significant market power, by prohibiting specific practices that are deemed an abuse of such power, and by specifying obligations of purchasers in relation to suppliers, the Act aims to protect the suppliers of agricultural products and groceries in their relations to supermarket chains.

This new Act has provoked a number of controversies. The Czech Federation of Food and Drink Industries, a special interest association of legal entities active in food and drink industries, supports the Act and refers to other EU Member States that have a similar regulation in place. The Czech Confederation of Commerce and Tourism, another interest group which represents companies and enterprises as well as federations, associations and trade alliances active in the commerce and hospitality sector, tourism and related services, criticises the Act.

According to the recent news, the Confederation of Commerce and Tourism finished their complaint to the European Commission which reportedly refers mainly to the discriminatory nature of the Act and to the restriction of freedom of business that the Act brought to practice in view of the Confederation.

We will follow up on the case and inform you of the results once they are published.