Commission calls on Czechia to improve competition for organising waste collection and recovery in the packaging sector

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.

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, as well as the possibility for EKO-KOM to influence the authorisation proceedings of other applicants.

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.

The Commission has voiced its competition concerns in the form of a Letter of Formal Notice. If the Commission’s preliminary view is confirmed, this conduct would infringe Article 106 of the Treaty on the Functioning of the European Union (‘TFEU’) in conjunction with Article 102 TFEU.

Executive Vice-President Margrethe Vestager, in charge of competition policy, said: “The Czech market for packaging waste collection and recovery has been dominated by the incumbent operator for more than two decades. 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.”