Czech Republic: Competition authority seeks to obtain data from mobile phone operators

Proposed legislative amendment

To facilitate the detection of anti-competitive behaviour, the Office for the Protection of Competition has proposed an amendment to the Act on Electronic Communication.1 Based on the amendment, the office would be entitled to request individual activity and location data (ie, date, time, mode of communication and duration) from mobile phone operators. However, access to this data would not be possible without prior judicial written permission. This would be granted by the courts only if it can be reasonably assumed that such data may contribute to clarifying the facts relevant for detecting a violation of Articles 101 or 102 of the Treaty on the Functioning of the European Union (TFEU) or the national equivalents, including its offender, and unless the pursued purpose cannot be otherwise achieved or can be achieved with only a disproportionate effort.

The amendment proposed by the office appeared during the ongoing discussions on the amendment of the Act on Electronic Communication. Under the current wording of the act's data retention obligation, mobile phone operators must keep information for six months on when, where and how communication took place and how long it lasted. Only security forces and the Czech National Bank can apply for access to this information and only for serious reasons.

Justification

When investigating possible violations of Article 101 of the TFEU (or its national equivalent) (ie, prohibited agreements between competitors such as price fixing, market sharing and bid rigging), the office argued that it verifies the existence of previous contact between competitors, their mutual communication and any coordination of their market behaviour. The office's practice demonstrates the increasing importance of electronic communication between investigated competitors, especially between their managers and other key employees. Information on telecoms traffic between these persons is thus crucial for the office's investigations. Given that these key employees usually also carry their mobile devices to face-to-face meetings, determining their location over time is also of great importance to the office.

In this context, the office also points out its typical investigative tool – on-site inspections (ie, dawn raids). Telecoms equipment (eg, mobile phones and notebooks) of managers and other key employees are typical objects of the office's on-site investigations. Non-disclosure, concealment and damaging these devices are the most serious forms of undermining on-site investigations. For example, a mobile phone that is concealed by an investigated competitor is extremely difficult for the office to detect and is a relatively effective way to thwart an investigation and any associated administrative proceedings.

Thus, according to the office, activity and location data will contribute significantly to the detection of anti-competitive behaviour, in particular when proving the existence of mutual contacts between competitors.

Comment

The Ministry of Industry and Trade, which will oversee the amendment, has yet to comment on the office's proposal. According to the ministry's spokesperson, it is still reviewing input received from various stakeholders. The amended act was supposed to go into the next legislative stage at the end of March 2020, but is expected to be delayed given the current COVID-19 pandemic. In addition, a long discussion on the expert and legislative level is to be expected, making the passing of the proposed amendment rather difficult.

Endnotes

1 Act on Electronic Communication (127/2005). The amendment proposal is available in Czech on the government's website.

This article was first published in International Law Office