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Czech Constitutional Court Upholds Act on Significant Market Power but Declares 3% Limit on Marketing Payments Unconstitutional

Czech Constitutional Court Upholds Act on Significant Market Power but Declares 3% Limit on Marketing Payments Unconstitutional

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The Czech Constitutional Court did not repeal the Act on Significant Market Power, as demanded by a group of senators almost four years ago. However, the judges stated that the provision on limiting the amount of suppliers’ payments to customers with significant market power to 3% of the supplier's annual sales, is unconstitutional.

"It is not a reasonable means to achieve the objective pursued by the Act, as it forces the parties to the supplier-customer relationship to negotiate the limitation of the amount of all monetary performances of the supplier for related customer services by a fixed amount, whereas the maximum amount cannot be determined in advance," the Constitutional Court stated.

This decision is of fundamental importance for the future cooperation of suppliers and customers, especially in the promotion of supplier products, marketing events, setting business strategies in the sale of products, etc.

By Claudia Bock, Attorney at Law, Schoenherr

Czech Republic Knowledge Partner

JŠK, advokátní kancelář, s.r.o. (JŠK) is a medium-sized law firm based in Prague providing a comprehensive range of commercial legal advisory services in the Czech Republic. Our team consists of almost 30 lawyers, five of whom are partners with many years of experience from leading international law firms. We advise local and international clients from banking, insurance and various industry sectors, boast a respected projects practice, and work for the public sector at the federal and municipal level.

Ever since it was founded in 2004, JŠK has striven for the epitome of professionalism, expertise and ethical integrity. We continuously seek to surpass what large global law firms can offer and to give our clients a personal approach. All mandates are equally important to us regardless of size as we guide clients through both complex and seemingly routine matters.

Our clients turn to us for advice when implementing their business plans across all areas of commercial law. We are proud members of PONTES: the CEE lawyers, a unique network of law firms through which we provide services not only in the Czech Republic but also in Austria, Bulgaria, Hungary, Poland, Romania and Slovakia.

Firm's website: http://www.jsk.cz

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