Czech courts deal with the concept of competition in recent landmark cases

In the first case, the Czech national chapter of FPI (International Federation of the Phonographic Industry) that represents owners of rights to music recordings filed an action in 2014 against public data storage service providers Hellshare and Hellspy.

The providers paid their users a fee dependant on the number or extent of downloads of data files stored by them by other users, without adequately verifying that such fee is not paid in connection with threatening or infringing intellectual property rights. Such behaviour was found by the Supreme Court as an act of unfair competition. Consequently, in view of the court, the rules of safe harbour in relation to the liability for the content of information stored at the request of the users did not apply in this case. It seems quite interesting that the court has attempted to overcome an exemption for IP infringement by the alleged need to protect fair competition.

However, it is important to point out, as the court did, that operating a service which uses an electronic search engine for stored information would not constitute unfair competition merely because the search results may include data files whose content endangers or infringes IP rights unless the service provider (actively) influences the search results beyond the automation process itself.

In the second decision, Ryanair wanted passengers to book tickets only on its website, and not through third parties, stating that this is the only way that consumers are guaranteed the lowest rates. However, Kiwi.com believed that it should be allowed to sell Ryanair tickets, both individually and in a composite trip, and to print boarding passes itself.

For this reason, Ryanair filed an action against Kiwi.com for handling passengers’ personal data which, according to Ryanair, prevented it from contacting passengers and meeting its financial obligations. Ryanair also threatened to reject boarding passes issued by Kiwi.com.

The lower courts issued a preliminary injunction against Kiwi.com and ruled in favour of Ryanair. The Constitutional Court, however, overruled these decisions and found them contrary to the freedom to conduct business, freedom of speech, and the right to judicial protection. The Constitutional Court explicitly argued for fair and equal competition conditions for businesses on the relevant market.

We will publish detailed articles on both decisions on our website and add relevant links to this article.

For more information contact Vojtěch Chloupek and Jiří Švejda.