Competition vs. environment: City of Prague violated competition law in connection with the rules for parking hybrid vehicles

By Vojtech Chloupek, Jiri Švejda

08-2020

The Czech Office for the Protection of Competition ("Office") published a press release on 16 July 2020 (without publishing the full decision yet) regarding a fine imposed for anti-competitive parking conditions for certain hybrid vehicles in paid parking zones in Prague.

According to this decision, the City of Prague violated the Czech Act on the Protection of Competition by setting the conditions for certain hybrid vehicles in paid parking zones without objectively justifiable reasons. Under the conditions, only those hybrid vehicles that were capable of driving only on electric propulsion and for which the power of the internal combustion engine did not exceed 135 kW had free parking. According to the Office, the conduct, which took place in the period from 17 April 2018 to 30 April 2019, was capable of distorting competition in the city of Prague as it favoured sellers of hybrid vehicles with internal combustion engines up to 135 kW. The end customers could realistically take into account the possibility of free parking when choosing a new vehicle. It also favoured entrepreneurs using these hybrid vehicles as they could benefit from saving their business costs because of the free parking.

In the decision, the Office stated that the advantage of hybrid vehicles was motivated by the legitimate efforts to reduce the negative impact of transport emissions on air quality. However, the condition limiting the power of the internal combustion engine was not chosen on the basis of objective and non-discriminatory criteria and was not proportionate to the stated objective of the regulation. The performance of an installed internal combustion engine is not a reliable indicator of the emission value of a hybrid vehicle. The city of Prague later came to this conclusion when it changed the above criterion in 2019 to a limit value of CO2 emissions of 50 g/km.

Regulation of the competition and environment policies are on the EU level governed by Article 3 of the TEU and Articles 7 and 11 of the TFEU. Conflicts between these policies can be expected more often in the future and they should be resolved under the principle of proportionality.