The EC is investigating the only waste collection and processing company in the Czech Republic

The European Commission (EC) has concerns about a conflict of interest and a breach of European Union (EU) competition rules for the only company authorized to collect and recover packaging waste in the Czech Republic because of its dual role as a waste collector with recovery powers them, reports euronews.com.

The EU executive believes that the Czech Packaging Act, which has been in force since 2002, is likely to have created "significant barriers to entry" for competitors seeking to gain access to the market, noting that "no other company has been able to obtain permission' to provide such services.

ECO-KOM is the only company operating in the country, offering packaging waste collection and recovery services to more than 20 enterprises for more than two decades.

"Such barriers include permit requirements that are very difficult to meet, such as strict contractual and financial conditions, including the possibility for EKO-KOM to influence the permit procedures of other applicants," the European Commission states.

The reaction of the EC

The EU executive cited the "uneven playing field" of potential for EKO-KOM's competitors and criticized the Czech company for its "dual role" both as a market participant competing with any new entrant and as a third party benefiting from certain procedural rights in the process of authorizing new applicants.

"We are concerned that the Czech measures have prevented the entry of competing companies, with subsequent negative impacts on prices, quality, innovation and choice," said Commission Executive Vice President Margrethe Vestager, in charge of competition policy.

She added that the Czech Republic had been sent a letter of formal notice, giving the government two months to respond to the Commission's concerns.

The Commission's investigation followed a complaint by the Czech company REMA, which tried to enter the market for the collection and recovery of packaging waste in the Czech Republic and failed. Five other companies were similarly unsuccessful in entering the market, according to the EU executive.