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The finding of the Constitutional Court – the law on significant market power

04/29/2020

Our law firm has long been dealing with Act No. 395/2009 Coll., on significant market power in the sale of agricultural and food products and its abuse, as amended (hereinafter referred to as "ZVTS"). We drew attention to some legal shortcomings of the amendments promoted by the current Prime Minister and the Ministry of Agriculture, which as a result lead to unconstitutionality, especially in relation to the unequal position of suppliers and customers, excessive and therefore illegal restrictions on contractual freedom, or the danger of food price increases.

On April 28, 2020, the Constitutional Court of the Czech Republic (hereinafter referred to as "the Court") dealt with the proposals of 17 senators for the abolition of the ZVTS and issued a decision no. stamp Pl. ÚS 30/16.

The Court of Appeal (rapporteur judge Pavel Rychetský) partially rejected and partially rejected the objections of the senators in his decision, but he upheld them in the part in which the provision setting the limit of 3% for the performance of the supplier to the customer from the supplier's annual sales for the last completed accounting period of 12 months was challenged.

ÚS abolished in § 3a letter a) ZVTS words "the amount of all financial payments of the supplier, the total sum of which may not exceed 3% of the supplier's annual sales for the last completed accounting period of 12 months for food delivered to an individual customer in the year in which the financial payment took place."

This is of fundamental importance for the cooperation of suppliers and customers, especially when promoting the supplier's products, marketing events, determining business strategies when selling products, etc.

Despite the fact that the decision of the Supreme Administrative Court came after a relatively long time (after almost 4 years), we welcome it especially for the reason that the legal norm is supposed to be generally binding and the state cannot unreasonably limit the property or other rights of certain persons at the expense of others; it can only happen if the conditions given by constitutional laws, including European Community law, are met. This was ignored for a long time in the case of ZVTS and it is important to remember this principle, e.g. also in connection with the measures taken by the Government of the Czech Republic in connection with the COVID-19 pandemic.