HAVEL & PARTNERS experts provided comprehensive legal advice to Ochranný svaz autorský (OSA), which administers the copyrights of Czech and foreign authors of audio and audio-visual recordings, in a dispute with the Office for Competition Protection (Office). The Office imposed a fine of CZK 10.7 million on OSA for alleged abuse of dominant position. The Regional Court in Brno concluded that the Office was not entitled to fine collective management societies in relation to determining royalty rates, since the Ministry of Culture acts as a competition authority of its own kind in these relations.

Since 2017, OSA has been represented in the litigation by HAVEL & PARTNERS’ team specialising in competition law, comprising partner Robert Neruda, partner Lenka Štiková Gachová and senior associate Vladislav Bernard. The Regional Court in Brno has now ruled in favour of the client and cancelled the multi-million fine.

“We welcome the court’s decision. From the start, we have maintained that we acted in full compliance with the then applicable wording of the Copyright Act, the common practice of collective management societies abroad, and in particular the rules for the protection of competition”, said Roman Strejček, Chairman of the OSA Board of Directors, regarding the court’s decision.

In 2020, the Office fined OSA for demanding payments from accommodation facilities for TV and radio receivers placed in rooms between 2008 and 2014 without taking into account the actual occupancy of the rooms.

OSA brought an action against the decision of the Office, challenging not only the illegality and unreviewability of the decision, but also the lack of subject-matter jurisdiction of the Office. Under the Copyright Act, it is the Ministry of Culture and not the Office that is responsible for supervising the activities of collective management societies, including the determination of royalty rates. The court upheld this argument and declared the decision null and void. According to the court, the decision of the Office suffered from such defects that it was not in fact an administrative decision at all.

The case is not only important for OSA but has implications for the entire sector of collective rights management. Its impact on practice has shown to the effect that shortly after its announcement, the court annulled a similar decision of the Office relating to the collective management organisation INTERGRAM, although INTERGRAM did not object to the nullity in its action at all. In doing so, it only acted in compliance with its official duty and relied on the reasoning applied by OSA earlier.