This article concludes our series dedicated to the topics discussed at the September meeting between the Czech Competition Authority and the ICC Competition Commission. After covering the proposed New Competition Tool, personal liability of managers, and labour-market cartel agreements, we now turn to another key area: merger control — specifically, the upcoming call-in model, which is set to significantly reshape the current system of merger review in the Czech Republic.
Proposed changes
The Czech Competition Authority has announced a planned modernisation of merger control rules based on two main pillars:
- Higher turnover thresholds: The combined turnover threshold in the Czech Republic (required to trigger mandatory notification) is expected to increase from CZK 1.5 billion to CZK 2.5 billion, and the minimum turnover of at least two merging parties from CZK 250 million to CZK 350 million. The Czech Competition Authority estimates that this will eliminate 20-30% of today’s mandatory filings.
- Introduction of a call-in model: The Czech Competition Authority will also be able to request notification of transactions that do not meet the revised turnover thresholds – particularly acquisitions of smaller, innovative, or strategically significant undertakings that may distort competition in the future (in particular so-called killer acquisitions). The tool may also apply to roll-up acquisition strategies that gradually lead to oligopolisation of a market.
According to the Czech Competition Authority, the freed-up capacity should allow it to focus on cases with greater impact on competition, including transactions captured via the call-in mechanism.
European context
The call-in model is not unique to the Czech Republic – it already exists in a number of jurisdictions, including long-standing practice in the United Kingdom, and more recently in Italy, Denmark and Sweden. Italy invoked its call-in powers in the NVIDIA/Run:AI transaction, requiring a notification and subsequently referring the case to the European Commission for review.
Another avenue for examining sub-threshold mergers stems from the Court of Justice of the EU’s Towercast judgment, which confirmed that a merger falling below notification thresholds may, in exceptional cases, be assessed as an abuse of dominance under Article 102 TFEU. Competition authorities thus gained an additional tool to intervene in concentrations that would otherwise completely escape merger control.
How the call-in mechanism should work
- Basic principle: The Czech Competition Authority may require notification even for sub‑threshold transactions.
- Condition for intervention: The parties must have a combined Czech turnover of at least CZK 2.5 billion.
- Time limit: The Czech Competition Authority may call in a transaction within six months of its completion.
- Voluntary notification: Companies may notify voluntarily – but doing so may signal heightened competition concerns to the authority.
- Selective use: The Czech Competition Authority has stated that the call-in tool should be used only for a small number of transactions with potential market impact, particularly in digital services, healthcare, pharmaceuticals and infrastructure.
What this means for undertakings
The Czech Competition Authority expects the new model to improve its ability to identify genuinely risky mergers. For undertakings, however, this means a need for more careful planning and increased legal vigilance. Undertakings should:
- Expect that even sub-threshold deals may end up requiring approval;
- Include competition-law analysis in the due diligence of smaller acquisitions;
- Consider informal pre-notification discussions with the Czech Competition Authority in borderline cases;
- Anticipate potential delays if the authority decides to invoke call-in powers.
Our commentary
On one hand, the call-in model can strengthen the Czech Competition Authority’s ability to capture competitively sensitive transactions that would otherwise escape scrutiny. On the other hand, it introduces significantly greater uncertainty for undertakings: even sub-threshold mergers may be called in retroactively, requiring more extensive advance analysis and interaction with the authority.
Much will depend on how transparently and predictably the Czech Competition Authority applies this tool – particularly how clearly it defines high-risk sectors and how frequently it resorts to call-in requests. We strongly encourage the Czech Competition Authority to publish guidance alongside the introduction of the call-in mechanism, indicating in which sectors and scenarios call-ins are likely – and, equally important, where undertakings can expect a “safe harbour.” Only then can the risk be mitigated that the new regime will raise transaction costs or even have a chilling effect on acquisition activity.
