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EU Commission calls on Czechia to improve competition for collection and recovery of packaging waste

The European Commission has informed Czechia that measures appointing EKO-KOM as the only company authorised for the collection and recovery of packaging waste for over two decades may be in breach of the EU competition rules.

EKO-KOM, based in Czechia, offers collection and recovery services for packaging waste. Since the entry into force of the Czech Packaging Act in 2002, EKO-KOM has been the only operator authorised to serve over 20,000 businesses in Czechia. No other company has succeeded in obtaining an authorisation for the provision of the same services.

“The Czech market for packaging waste collection and recovery has been dominated by the incumbent operator for more than two decades,” said Margrethe Vestager, Executive Vice-President in charge of competition policy. “We are concerned that Czech measures have prevented entry of rival companies, with a consequent negative impact on prices, quality, innovation and choice. Therefore, we have sent a letter of Formal Notice to Czechia. Ensuring effective competition is essential for achieving a sustainable and circular economy, one of the main building blocks of the European Green Deal.”

The Commission’s preliminary view is that certain provisions of the Czech Packaging Act as well as Czechia’s enforcement of such rules may have created significant entry barriers for rival companies. Such barriers include authorisation requirements that are very difficult to meet, such as strict contractual and financial conditions. They also include the possibility for EKO-KOM to influence the authorisation proceedings of other applicants given that, as the established incumbent, it has access to and the right to comment on the application files of potential new entrants. Moreover, potential entrants are required to coordinate certain aspects of their planned commercial activities with EKO-KOM as the established incumbent.

The Commission preliminarily considers that such State measures led to unequal opportunities for EKO-KOM’s rivals and placed EKO-KOM in a position of conflict of interest, due to its dual role as both a market participant competing with any new entrant and a third party enjoying certain procedural rights in the authorisation process of new applicants. The measures effectively prevented other companies from being authorised by the Czech authorities and allowed EKO-KOM to operate as a de facto monopolist for more than two decades, thereby hindering the development of effective competition in the Czech market for waste collection and recovery.

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