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24 August 2020
newsletter
czech republic

City of Prague fined for unfair parking rules

competition, eu & foreign trade

In a first-instance decision, the Office for the Protection of Competition recently fined the City of Prague Kc980,000 (approximately €36,981) for creating anti-competitive parking conditions for hybrid vehicles.

According to the office's press release, between 17 April 2018 and 30 April 2019 the City of Prague violated the Act on the Protection of Competition by favouring the parking of certain hybrid vehicles in paid parking zones in its territory without objectively justifiable reasons.

During this period, only hybrid vehicles that were powered exclusively by electric propulsion with internal combustion engines up to 135kW could park for free.

The office considered such conduct capable of distorting competition in Prague because:

  • it favoured sellers of hybrid vehicles with internal combustion engines up to 135kW; and
  • consumers could consider the possibility of free parking when choosing a new vehicle.

The conduct also favoured entrepreneurs using such vehicles, which would benefit from the free parking and reduce business costs compared with competitors that operated hybrid vehicles with internal combustion engines over 135kW.

In its decision, the office allegedly acknowledged that favouring hybrid vehicles was motivated by the City of Prague's legitimate efforts to reduce transport emissions' negative impact on air quality. However, the office held that the set limit regarding installed internal combustion engines had not been based on objective and non-discriminatory criteria and was disproportionate to the stated regulatory objective.

The performance of an installed internal combustion engine is an unreliable indicator of the emission value of a hybrid vehicle. According to the office, the City of Prague had determined this value based on a CO2 emission limit of 50g/km set in 2019 in accordance with Act on the Conditions of Operation of Vehicles on Roads.

The office's decision is not final yet and may be appealed.

This case demonstrates that the office is increasingly open to initiating proceedings against and fining public authorities. Companies or individuals negatively affected by an anti-competitive public measure may raise awareness of such acts and file a complaint with the office.

This article was first published in International Law Office.