A decision issued by the Supreme Administrative Court (the "Court") on 31 October 2013 (recently published) considered a telephone conversation between two individuals - the manager of an outdoor equipment producer and a representative of its distributor - as legitimate evidence in administrative proceedings. The decision confirmed the precedent decision of the Regional Court in Brno ("the Regional Court") which upheld the original decision of the Czech Competition Authority (The Office for the Protection of Competition, "CCA").

Background of the case

By the decision dated 11 May 2009 ("the Decision"), the CCA fined a producer of outdoor equipment (the "Producer") for illegally setting resale prices ("resale price maintenance", RPM). The Producer appealed against the Decision. The Chairman of the CCA, however, confirmed the Decision. The Chairman's appeal decision was consequently confirmed by the Regional Court in the following court proceedings. After that, the Producer challenged the Regional Court's decision and submitted the cassation to the Court.

One of the main objections of the Producer was allegedly illegally obtained evidence, i.e. a recorded telephone conversation between the Producer and one of its distributors, even without any authorisation from the Producer or the CCA or any other respective state authority.

Judgment

The Court firstly pointed out that the principles of the administrative proceedings come out of criminal proceedings' rules. However, it is not possible to use such an analogy without any limits. On the contrary, the rules of criminal procedure can be used only in cases when (i) respective rules are missing in the administrative law, (ii) such interpretation does not negatively affect any party to the proceedings, and (iii) does not have any negative impact on values of public interest.

Conversation between two individuals focused solely on business lack private character

With regard to other case law, the Court stated that conversation between two individuals as a part of commercial or public activity does not fall within the scope of personal acts. In this case, the dialogue (i) happened in a producer-distributor relationship, and (ii) focused on matters of sale and consumption of the goods in question. Therefore, this dialogue lacked any private character, and its recording did not breach the Producer's fundamental right to personal data protection.

Difference between recordings made by individuals and public authorities

Further, the Court pointed out that it is always required to strictly distinguish between recordings provided by individuals and those made by public authorities. Evidence in the form of audiovisual recordings made secretly by the public authority is basically inadmissible. On the contrary, evidence in the form of audiovisual recordings made by individuals (e.g. journalists) to support the credibility of published media (articles, television reports, etc.) is generally permissible.

The recording in question was made by an individual, private physical person and their decision to record their conversation with the Producer was taken on their own initiative. The CCA did not authorise, nor encourage the distributor's representative to do so. In the administrative file, there was no evidence of any such activity of the CCA. The Court concluded that the recording had not been made by the public authority, i.e. by the CCA during its operative activity in investigating the by that time alleged, restrictive behaviour of the Producer. Therefore, since the recording was made by an individual – the distributor - the CCA was entitled to use the recording as submitted relevant evidence.

The fact that the conversation was recorded before the initiation of the administrative proceedings does not mean that the recordings are of no use in the proceedings. Once again, rules of criminal procedure are not always applied in cases of individual-to-individual recordings. The provider of such recordings is not obliged to follow strict criminal procedure rules when submitting the recordings as evidence.

Permission of the recorded person

Regarding the necessity of obtaining permission of the recorded person, the Court stated as follows: In administrative proceedings, it is not possible to exclude en block all audio recordings made by individuals without the permission of other participants of the conversation. Whether these recordings are admissible always depends on the individual character of the recordings and possible breaches of fundamental human rights concerning individual integrity and privacy. Such rights can hardly be breached in the case of a recording of a conversation regarding routine commercial activity.

Supportive character of the evidence in form of recordings

Last, but not least, the Court added that the recordings in question were only supportive evidence. Electronic communication was the main and direct evidence of the resale price maintenance. Information produced by the recordings only supported the information contained in email communications between the Producer and its customers. Moreover, the Court confirmed that in obtaining the recordings the representative did not provoke any anticompetitive behaviour, the information obtained was not used for any purposes other than protecting competition, and the recordings have not been made public and therefore could not harm the Producer's public standing.

Conclusion

This judgment is especially innovative and might help companies abused by competitors to persuade the CCA about their competitors' anticompetitive behaviour. However, it must be borne in mind that every single recording will be subject to different rules about how it can (or cannot) be used as evidence in the administrative proceedings; those rules will always depend on various conditions of the particular case and the character of the specific administrative proceedings.