Competing fairly - Lithuania
The Law on Competition establishes the legal framework for the control of competition restriction and of unfair competition and defines the rights, obligations and responsibility of public administration and economic operators.
It also applies to the activities of economic entities registered outside of Lithuania if competition is being restricted in the internal market of Lithuania due to such activities.
Prohibition of monopolies
The prohibition to monopolise production and the market is enshrined in Article 46 of the Constitution.
All agreements that have the purpose of restricting competition or that restrict or may restrict competition shall be prohibited and shall be void from the moment of the conclusion thereof, including:
- agreement to directly or indirectly fix prices of certain goods or other conditions of purchase or sale;
- agreement to share the product market on a territorial basis, according to groups of buyers or suppliers or in any other way;
- agreement to fix production or sale volumes for certain goods as well as to restrict technical development or investment;
- agreement to apply dissimilar (discriminating) conditions to equivalent transactions with individual undertakings, thereby placing them at a competitive disadvantage;
- agreement to require other undertakings to assume supplementary obligations which, according to their commercial nature or purpose, have no direct connection with the subject of the contract.
When concluded between competitors, the agreements listed in subparagraphs 1-4 shall be, in all cases, considered as restricting competition.
Abuse of a dominant position
It shall be prohibited to abuse a dominant position within a relevant market by performing any acts which restrict or may restrict competition, or limit, without due cause, the possibilities of other undertakings to act in the market, or violate the interests of consumers, including:
- direct or indirect imposition of unfair prices or other conditions of purchase or sale;
- restriction of trade, production or technical development to the prejudice of consumers;
- application of dissimilar (discriminating) conditions to equivalent transactions with certain undertakings, thereby placing them at a competitive disadvantage;
- the conclusion of contract subject to acceptance by the other party of supplementary obligations which, according to their commercial nature or purpose, have no direct connection with the subject of such contract.
Mergers of economic operators are also regulated by the Law on Competition.
Other types of unfair competition
The Law on Competition prohibits from performing any acts contrary to honest business practices if such acts may be detrimental to the competitive potential of another economic operator.
An undertaking whose legitimate interests have been violated by acts of unfair competition shall be entitled to bring an action before a court.
The Competition Council shall investigate acts of unfair competition only in cases where these acts violate the interests of many undertakings or consumers.
Law on the Prohibition of Unfair Practices of Retailers prohibits retailers with significant market power to perform acts contrary to honest practices, establishes the rights, duties and responsibilities of the retail business.
Competition Council carries out investigations of violations and imposes fines in accordance with the procedures provided in this law.
When providing state aid to business undertakings, providers of state aid are to make any exceptions in accordance with the provisions of European Commission regulations establishing certain exceptions.
The State Consumer Rights Protection Authority ensures implementation of legal acts relating to consumer rights, and coordinates the activities of the state institutions that protect consumer rights.
National competition authority
The Competition Council implements the state competition policy and monitors the compliance with the Law on Competition.
Strict provisions govern company mergers
You must inform the Competition Council about any merger and receive its permission if the sizes meet the values set in the Law on Competition. You will also have to pay a fee to the state for the submission and examination of the notification.
The Competition Council shall examine notifications of concentration within 4 months.
A merger without the permission of the Competition Council may invoke a fine of up to 10% of total annual income of the preceding financial year.
Notifications of grants, if the matter is related to state aid within the meaning of Article 107 of the EU Treaty, are to be submitted to the Competition Council.
A complaint against actions restricting competition can be lodged with the Competition Council, and it can be demanded that an investigation be opened.
A request to carry out an investigation has to be submitted in writing.
The Competition Council must examine such requests within 30 days and decide whether to open an investigation or refuse to open an investigation.
Check also the legislation on this topic in: