In a decision disclosed at the end of July, the Czech Office for the Protection of Competition (the “Office”) reaffirmed its commitment to acknowledging the internal compliance programs of undertakings as a mitigating factor when calculating fines. This holds true even in instances of severe breaches to competitive law. These findings follow from the Office’s ruling in the recent Tescoma case.
The Office’s recognition of internal compliance programs reaffirms its commitment to fostering a corporate culture that endeavors to prevent such lapses from occurring. An undertaking with a robust and effective internal compliance program is seen to be less likely to commit serious violations of competition law. The Office’s stance is an echo of the global trend wherein competition authorities are recognizing the crucial role compliance plays in the business world, by encouraging companies to build robust programs that promote adherence to the regulations.
However, the recognition of compliance programs should not be mistaken as an assurance against administrative penalties. Even with the existence of an extensive compliance program, companies can still be penalized for significant breaches of competition law. In such instances, while the breach itself is penalized, the presence of a compliance program could potentially lessen the severity of the fine.
For companies and legal practitioners alike, these developments serve as a timely reminder to maintain and improve internal compliance structures. An effective internal compliance program not only can act as a shield against potentially scathing fines but also sets the foundation for a culture of regulatory compliance within an organization.
For more details on the decision you may want to review the full text at JD Supra.