Since 2010, the Global Law Experts annual awards have been celebrating excellence, innovation and performance across the legal communities from around the world.
posted 3 hours ago
The 2026 amendment to the Czech Competition Act (Act No. 143/2001 Coll.) has materially raised the enforcement stakes for every company operating distribution agreements in the Czech Republic. With higher maximum fines, explicit manager liability and new fast-track market-intervention powers now at the disposal of the Office for the Protection of Competition (ÚOHS), businesses that delay contract reviews risk penalties that were simply not on the table twelve months ago. This article provides the clause-level, step-by-step compliance checklist that in-house counsel, commercial managers and procurement directors need to act on immediately, covering pricing, exclusivity, online-sales restrictions and internal escalation procedures aligned with the reformed law.
Every business that sells through distributors, resellers or exclusive partners in the Czech Republic must decide now whether its current agreements comply with the strengthened enforcement framework. The cost of inaction has increased dramatically: fines are higher, aggravating factors are clearer, and individual executives can be sanctioned personally.
Six-point urgent action list:
Three things to do in the next 30 days: (1) circulate this checklist to every sales and procurement manager who signs or administers distribution contracts; (2) run the 10-point internal audit outlined in Section 7; (3) schedule a legal review of all pricing-related clauses with a qualified Czech competition lawyer.
Understanding the legal architecture is essential before diving into clause-level changes. Czech antitrust compliance for distribution agreements rests on two pillars: the national Czech Competition Act and the EU Vertical Block Exemption Regulation (VBER).
Under the Czech Competition Act, a vertical agreement is any agreement or concerted practice between two or more undertakings operating at different levels of the production or distribution chain. This covers supply contracts, distribution agreements, franchise arrangements, selective-distribution systems, and agency contracts where the agent bears commercial risk. The definition mirrors the EU approach set out in the European Commission’s guidelines on vertical restraints.
Critically, vertical agreements are not automatically prohibited. They become unlawful only when they contain restraints that restrict competition, such as resale price maintenance, absolute territorial protection, or bans on passive sales, and fall outside applicable block-exemption safe harbours.
The EU VBER provides a safe harbour for vertical agreements where both the supplier’s and the buyer’s market share remains below 30 %, provided the agreement contains no “hardcore” restrictions. Czech law applies the same market-share thresholds and hardcore-restriction categories as the VBER. However, the Czech Competition Act contains additional national enforcement tools, and the 2026 amendment has significantly expanded those tools. Where an agreement affects trade between EU Member States, both EU and Czech rules apply in parallel; where the effect is purely domestic, Czech law governs exclusively.
The 2026 amendment did not alter the substantive definition of prohibited vertical restraints. Instead, it reshaped the enforcement toolkit, raising the consequences of non-compliance and giving ÚOHS faster, more powerful intervention capabilities. Industry observers expect these changes to produce a measurably more aggressive enforcement posture toward distribution agreements in the Czech Republic.
| Topic | Before 2026 | After 2026 |
|---|---|---|
| Maximum fines for undertakings | Existing statutory caps with limited aggravating-factor guidance | Increased maximum fines with clearer, codified aggravating factors (repeat infringement, obstruction of investigation, role as instigator) |
| Manager / executive liability | Limited; pursued case-by-case with uncertain legal basis | Explicit personal liability introduced, managers whose conduct leads to an infringement may face individual administrative penalties |
| Market-intervention powers | Traditional investigative and decision-making powers; no interim fast-track mechanism | New fast-track intervention powers enabling ÚOHS to order temporary market measures before a final decision |
| Settlement and leniency tools | Available but procedurally cumbersome | Streamlined procedures encouraging voluntary disclosure and early resolution |
| Investigation scope | Focused on documentary evidence and formal requests | Expanded investigatory tools including broader digital evidence-gathering capabilities |
ÚOHS can now impose temporary behavioural or structural measures where it has reasonable grounds to suspect a serious competition infringement. For distribution agreements, the likely practical effect is that the authority can order a supplier to suspend a suspect pricing policy or territorial restriction before the investigation concludes, significantly increasing commercial disruption risk for non-compliant businesses.
The amendment introduces explicit statutory grounds for sanctioning individuals. Executives, including commercial directors and heads of sales, whose decisions or instructions lead to an antitrust infringement may face personal administrative penalties. This represents a fundamental shift in risk allocation: compliance is no longer solely a corporate concern. Early indications suggest that ÚOHS intends to use this tool to deter senior-level involvement in resale price maintenance and market-partitioning schemes.
Not every clause in a distribution contract carries the same enforcement risk. The table below maps the most common vertical restraints against post-2026 risk levels and the recommended immediate action for antitrust compliance in the Czech market.
| Clause Type | Risk Level | Recommended Immediate Action |
|---|---|---|
| Fixed or minimum resale price (contractual RPM) | 🔴 High | Remove immediately; replace with non-binding recommended prices |
| Maximum resale price | 🟡 Medium | Retain only with clear wording that prices are caps, not targets |
| Recommended resale price | 🟢 Low (if genuinely non-binding) | Ensure no enforcement mechanism, penalty, or incentive converts the recommendation into a de facto obligation |
| Minimum advertised price (MAP) | 🟡 Medium–High | Review for de facto RPM effect; document objective justification |
| Absolute territorial restriction | 🔴 High | Remove or convert to primary-responsibility territory with passive-sales carve-out |
| Customer allocation (absolute) | 🔴 High | Remove absolute bans; narrow to active-sales restrictions within VBER safe harbour |
| Ban on online sales | 🔴 High | Remove; replace with quality criteria applicable equally to online and offline channels |
| Dual-pricing (online vs offline) | 🟡 Medium | Permitted only where price differential reflects genuine cost differences |
| MFN / price-parity clause | 🟡 Medium–High | Review scope; narrow or remove wide MFN; document efficiency gains |
| Non-compete / exclusive purchasing (> 5 years) | 🟡 Medium | Cap duration at 5 years or include genuine renewal opt-out |
Resale price maintenance remains the single highest-risk clause category. Under both the Czech Competition Act and the EU VBER, fixing or effectively controlling the minimum resale price is a hardcore restriction, no safe harbour applies regardless of market share. The 2026 reform amplifies this risk through higher fines and manager liability.
Absolute territorial protection and blanket customer-allocation clauses are treated as hardcore restrictions. Distribution agreements in the Czech Republic may restrict active sales into a territory or to a customer group exclusively allocated to another distributor, but must always preserve the distributor’s right to fulfil unsolicited (passive) orders.
Outright prohibitions on online sales are treated as restrictions of passive sales and therefore fall within the hardcore category. Selective-distribution systems may impose quality standards for online sales channels, but those standards must be equivalent to the criteria applied to physical stores and objectively justified by the nature of the product.
This section forms the core of the distribution contract checklist. For each contract area, the guidance below specifies the risk, the required change, and model wording that aligns with the post-2026 enforcement posture. Adapt model language to your specific commercial context and have it reviewed by qualified Czech competition counsel before insertion.
| Clause | Why It Is Risky | Safe Wording |
|---|---|---|
| “Distributor shall not resell below the price set out in Annex A” | Constitutes fixed/minimum RPM, hardcore restriction; no block exemption available | “Supplier provides recommended resale prices in Annex A for guidance only. Distributor is free to determine its own resale prices independently.” |
| “Failure to maintain the recommended retail price may result in termination” | Converts a recommendation into a de facto obligation through penalty, amounts to contractual RPM | “Distributor acknowledges the recommended retail prices. No commercial disadvantage, penalty, or termination right shall arise from Distributor’s independent pricing decisions.” |
| “Distributor shall not advertise below the MAP” | MAP policies can function as de facto minimum-price controls; ÚOHS scrutiny is likely to increase | “Supplier may communicate a minimum advertised price. Distributor may offer actual transaction prices below the MAP at the point of sale, and no sanction shall apply.” |
B2B note: The same principles apply to distribution agreements between manufacturers and wholesale intermediaries. A “cost-plus” floor that functions as a minimum resale price carries the same risk as explicit RPM.
| Clause | Why It Is Risky | Safe Wording |
|---|---|---|
| “Distributor shall sell exclusively within the Territory and shall not sell outside it” | Absolute territorial protection, hardcore restriction; blocks passive sales | “Distributor is appointed as the exclusive distributor for the Territory. Distributor shall concentrate its active sales efforts within the Territory but shall remain free to fulfil unsolicited orders from customers located outside the Territory.” |
| “Distributor shall not sell to [named customer group] reserved for Supplier’s direct sales” | Absolute customer restriction, hardcore unless limited to active sales only | “Distributor shall not actively solicit customers within the Reserved Group. Distributor may fulfil unsolicited orders from any customer, including members of the Reserved Group.” |
| Clause | Why It Is Risky | Safe Wording |
|---|---|---|
| “Distributor shall sell only through its physical retail locations” | Outright online ban = restriction of passive sales = hardcore restriction | “Distributor may sell through any channel, including online, provided it meets the quality standards set out in Schedule B, which apply equally to online and offline sales.” |
| “Online orders shall carry a surcharge of X %” | Dual pricing penalising online sales may restrict passive sales and raise red flags | “Where Supplier applies differential wholesale prices for online and offline channels, such differential must be objectively linked to documented cost differences and shall not serve to discourage online resale.” |
B2C note: Where the supplier also sells directly to consumers (dual distribution), information exchanged between the supplier’s distribution arm and its retail competitors must be ring-fenced. Include a data-firewall clause preventing commercially sensitive downstream data from flowing to the supplier’s direct-sales team.
Distribution contracts should include clauses that support, rather than obstruct, antitrust compliance in the Czech market:
Not every distribution arrangement requires regulatory engagement. However, certain triggers should prompt immediate escalation and consideration of voluntary disclosure to ÚOHS for distribution agreements in the Czech Republic.
Escalation triggers:
The 2026 amendment streamlines settlement and leniency procedures, making early voluntary disclosure more attractive. A self-report should include: (1) a description of the restrictive practice; (2) the duration and geographic scope; (3) the identities of all participating undertakings; (4) all supporting documentary evidence; and (5) a statement of remedial steps already taken. Engage qualified competition counsel before submitting any disclosure, early legal privilege assessments are critical.
In a standard investigation ÚOHS will typically request: copies of all distribution, supply and franchise agreements; pricing communications (including emails, messaging-app exchanges and internal presentations); market-share data; and evidence of monitoring or enforcement of resale prices. Under the expanded digital evidence-gathering powers introduced by the 2026 amendment, the authority can also access electronic records stored on cloud platforms and mobile devices.
Operational compliance requires more than updated contract templates. Businesses should embed a standing compliance programme across sales, procurement and legal functions.
| # | Audit Item | Completed (Yes/No) |
|---|---|---|
| 1 | All active distribution contracts inventoried and catalogued by risk level | |
| 2 | Pricing clauses reviewed and cleared of RPM / de facto RPM language | |
| 3 | Territorial and customer restrictions checked for passive-sales carve-outs | |
| 4 | Online-sales provisions reviewed for equivalence with offline criteria | |
| 5 | Non-compete and exclusive-purchasing clauses capped at 5 years | |
| 6 | Competition compliance warranty added to all templates | |
| 7 | Data-firewall clause inserted for dual-distribution arrangements | |
| 8 | Document-retention policy updated to preserve investigation-relevant records | |
| 9 | Annual competition-law training scheduled for sales and procurement staff | |
| 10 | Escalation point designated (named individual) for suspected breaches |
Use the following flow to triage any flagged clause or practice:
| Entity Type | Key Red-Flag Trigger | Recommended Response |
|---|---|---|
| Manufacturer / Supplier | Imposing minimum resale prices or monitoring distributor pricing | Cease monitoring; convert to non-binding recommendations; consider leniency if systematic conduct detected |
| Distributor / Wholesaler | Receiving instructions to maintain prices or refuse sales to certain customers/territories | Refuse to comply; document the instruction; report internally; seek legal advice on whistleblower protection |
| Retailer / Franchisee | Being prohibited from selling online or required to match physical-store pricing | Challenge the restriction; request written justification from franchisor; escalate to competition counsel |
The 2026 reform to the Czech Competition Act is not a theoretical shift, it creates immediate, tangible risk for every business operating distribution agreements in the Czech Republic. The combination of higher fines, personal manager liability, and ÚOHS’s new power to impose interim measures before a final decision makes contract review an operational priority, not a legal nicety.
Businesses should take three concrete steps without delay: complete the 10-point internal audit checklist above; amend all high-risk clauses using the model language provided; and engage qualified Czech competition counsel to validate the changes and assess any legacy exposure. Antitrust compliance in the Czech market is no longer a back-office function, it belongs on the board agenda.
This article was produced by Global Law Experts. For specialist advice on this topic, contact LENKA ČÍŽKOVÁ at Havlík Švorčík and Partners, a member of the Global Law Experts network.
Find the right Legal Expert for your business
Sign up for the latest advisor briefings and news within Global Advisory Experts’ community, as well as a whole host of features, editorial and conference updates direct to your email inbox.
Naturally you can unsubscribe at any time.
Global Advisory Experts is dedicated to providing exceptional advisory services to clients around the world. With a vast network of highly skilled and experienced advisors, we are committed to delivering innovative and tailored solutions to meet the diverse needs of our clients in various jurisdictions.
