On 30 January 2019, the Czech Supreme Administrative Court (“SAC”) issued judgement in the case of “small construction cartel”. In this judgement, the SAC finally confirmed that the practice of “fishing expeditions” conducted by the Office for the Protection of Competition (“Office”) in the course of administrative proceedings is illegal. The SAC strongly rejected the widely applied practice of dawn raids during which the Office searched for evidence without having any specific suspicion of the infringement of the competition rules. The “small construction cartel” case concerned the investigation of alleged public procurement-related bid rigging, which was initiated by a complaint received by the police authorities. During the administrative proceedings, the Office conducted dawn raids and obtained evidence in a way that was excessive and unrelated to the information at its disposal at the time. The Office “blindly” searched for evidence and sought information even in relation to public tenders that were not suspicious fort any specific reason.
The SAC’s judgement confirms the illegality of the above-mentioned conduct of the Office. With respect to the possibility to use the evidence obtained during the illegal raids the SAC held that it is unlawful to base the whole proceedings before the Office solely on the illegally obtained evidence and on the evidence derived from it. The SAC did not accept the Office’s argument about the possibility to carry out random inspections (raids), i.e. inspections without any specific suspicion. The SAC confirmed that the possible scope of such random inspections is very limited, that such inspections must be carried out in a way that minimises the interference with rights of the undertakings and they cannot be used arbitrarily to substitute genuine dawn raids which have a specific purpose and corresponding procedural regulation.
The newest SAC judgement is to be welcomed. Not only does it increase the legal certainty of the undertakings and clarify the legal framework for the future investigative and decision practice of the Office, but it is also consistent with the case law of the EU courts, which base their decisions in dawn raid cases on the same principles that were used by the SAC.
ROWAN LEGAL represented one of the parties in this “small construction cartel” case and consistently (at all stages and before all the authorities concerned) pointed to the illegality of the Office’s raids and the way it obtained evidence. It follows from the SAC judgement that these objections were upheld by the SAC, just as they were upheld by the Regional Court in Brno in the preceding judgement.