KŠB Wins the Philips Cartel Case before the Supreme Administrative Court

The Czech Competition Authority (CCA) alleged that Philips was a party to a cartel agreement between colour TV screen manufacturers. According to the CCA, the cartel existed under both the former and the current (as of 2001) version of the Competition Act. However, unlike the other parties involved in the cartel, Philips was alleged to have been involved only during the period of the “old” Competition Act. Therefore, there was a question concerning when the penalty time limit actually started or, in other words, when Philips’ liability for the alleged cartel involvement ceased. The CCA and the Regional Court in Brno both held that the time limit started when the cartel agreement terminated, i.e. at a time when (as also acknowledged by the CCA) Philips was no longer involved.

However, the Supreme Administrative Court agreed with KŠB’s arguments and overturned the Regional Court’s decision. Given the principle of personal liability, the penalty time limit must have started at the moment the company ceased to be involved in the alleged unlawful activity rather than at the moment the cartel was terminated by all the parties involved. The Supreme Administrative Court held that the penalty time limit had expired even before the CCA started its administrative proceedings and that therefore Philips liability for the alleged competition offence certainly ceased to exist upon the expiry thereof as well. The Supreme Administrative Court thus overturned both the Regional Court’s decision and the CCA’s decision – which did not impose a penalty but ruled that the law was violated – and it ordered the CCA to terminate the proceedings against KŠB’s client.