Member Article

Lithuania's substantive competition law is similar to EU competition law; the main differences stem from enforcement rules and priorities. This update considers recent trends in this area. Competition law in Lithuania is enforced only in administrative proceedings. Unlike neighbouring Latvia, Lithuania allows for the imposition of penalties against individuals (eg, managers of a company in breach of competition law). Companies face fines of up to 10% of their annual turnover; company directors may be disqualified for three to five years and fined up to €15,000.

In 2011 the Competition Council was particularly active in policy making. New guidelines were adopted regarding fines and the council announced its enforcement priorities by publishing prioritisation guidelines. These documents indicate several main characteristics of its approach.

The prioritisation guidelines suggest that greater attention will be paid to enforcement against cartels. Action has previously been taken in sectors such as:

l ship agency services;

l motor vehicle distribution;

l non-life insurance;

l orthopaedic equipment manufacturing;

l advertising services; and

l audiovisual product distribution.

The guidelines make it easier for the council to close (or decline to open) investigations and to concentrate on the most important cases. Sectors that affect a large number of consumers (eg, energy and utilities, banking and food production and retail) have been identified as key areas.

The council's fining guidelines suggest a move towards European Commission practice, the objective being to increase the overall level of fines and ensure that they provide an effective deterrent.Enforcement actions against abuses of dominant position have been relatively common in recent years, but this is likely to change with the new enforcement priorities. In 2011 a number of investigations were dropped and, in one case, a commitment  decision was adopted; no infringement decisions were adopted. Previous decisions in this area have targeted a number of sectors, including oil refining and energy, postal services and telecommunications.

The council is not generally proactive in carrying out sector inquires. However, a number of factors have led it to focus on the grocery retail sector, including:

l the increased buying power of large supermarkets;

l the oligopolistic structure of the market;

l increases in food prices; and

l politically sensitive complaints of small retailers and suppliers in the public domain.

In 2010 Parliament adopted a special law prohibiting unfair retail practices, which in practice applies only to four major retail chains. The council is authorised to assess the operation of the law once a year and to propose improvements. A sector investigation into grocery retail, which was opened in 2010, is ongoing. Previously, the council has investigated markets for oil products, energy and heating, dairy products and payment cards.

For further information on this topic please contact Marius Juonys or Lina Barauskaite at LAWIN Lideika Petrauskas Valiunas ir partneriai by telephone (+370 5 268 1888), fax (+370 5 212 5591) or email ([email protected] or [email protected]).

 

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