From the enforcer: Competition Council
Lithuania: from the enforcer
Council member, Deputy Chairman
Council member, Deputy Chairwoman
Questions and answers
How long is the head of agency’s term of office?
The Competition Council (Council) members, including its Head, are appointed for a six-year term. The same person may not be appointed as a Council member for more than two consecutive terms of office.
When is he or she due for reappointment?
The Chairman was reappointed for a six-year term starting on 5 April 2017.
Which posts within the organisation are political appointments?
The Chairman, his Deputies and the Council members are appointed by the President of the Republic of Lithuania upon the proposal of the Prime Minister. A Council member’s term of office is fixed and does not depend on the change of either the President or the Prime Minister.
What is the agency’s annual budget?
The total annual budget of the Council for 2019 was €2.5 million.
Annual budget of the Council in the five past years:
How many staff are employed by the agency?
Seventy people, including five Council members (among them – the Chairman) are currently employed at the Council.
To whom does the head of the agency report?
The Competition Council is an independent authority accountable only to the Lithuanian parliament.
Do any industry-specific regulators have competition powers?
Do politicians have any right to overrule or disregard the decisions of the authority?
Does the law allow non-competition aims to be considered when taking decisions?
Which body hears appeals against the agency’s decisions? Is there any form of judicial review beyond that mentioned above? If so, which body conducts this?
The decisions of the Council may be appealed to the Vilnius Regional Administrative Court, while judgments of the latter can be reviewed by the Supreme Administrative Court of Lithuania. No further appeals are possible.
Has the authority ever blocked a proposed merger?
Yes. In 2018, the Council has blocked a proposed merger by two major supermarket chains after failure to comply with the remedies offered. In 2016, the Council blocked a merger in the Lithuanian markets for classified ads for real estate and vehicles. In 2015, the Council blocked a merger between malt producers.
Additionally, a number of notifying parties have withdrawn their merger notifications after receiving the authority’s preliminary negative assessment of the respective mergers: one company in 2019, one company in 2018, one company in 2014, two companies in 2013 and two companies in 2012.
Has the authority ever imposed conditions on a proposed merger?
Yes. Between 1999 and August 2020 the Council cleared 26 mergers subject to conditions. The last time a merger was cleared subject to conditions was in 2017 in the retail trade sector (the latter was subsequently blocked when the condition was not met).
Has the authority ever conducted a Phase II investigation in any of its merger filings?
Yes. The Council conducted a Phase II investigation in four merger filings in 2019, seven merger filings in 2018, five merger filings in 2017, nine merger filings in 2016, five merger filings in 2015, eight merger filings in 2014, five mergers in 2013 and five merger filings in 2012.
Has the authority ever pursued a company based outside your jurisdiction for a cartel offence?
Yes. In 2017, the Council found that UAB Norvesta and the German company Sypra concluded a cartel agreement while participating in the radioactive scrap metal auction conducted by Ignalina nuclear power plant, and thus were fined €27,500 and €27,100 respectively. In 1998, the Council found the Latvian company Grindex and Lithuanian company Ilsanta guilty of geographically sharing the market of intravenous fluids. There have also been instances of investigations into possible anticompetitive agreements between Lithuanian and foreign-based companies; however, these cases were closed without finding an infringement.
Do you operate a leniency programme? Whom should potential applicants contact?
A leniency programme has been in place since 1999. The Leniency programme was further elaborated in 2008 and recently updated in 2020 with amendments describing in greater detail the procedure for the submission and examination of requests on immunity from fines or their reduction, as well as requirements for such requests. The Leniency Rules have been drafted following the 2006 European Commission Leniency Notice and the European Competition Network (ECN) Model Leniency Programme. The 2020 amendments implement the Directive of the European Parliament and the Council to empower the competition authorities of member states to be more effective enforcers and ensure the proper functioning of the internal market.
Potential applicants should contact the Anti-competitive Agreements Investigation Group:
Address: Jogailos g. 14, Vilnius 01116, Lithuania
Tel: +370 5 212 4225 / 6641
Email: [email protected]
Anonymous consultations prior to the submission of an application as well as a marker system are also available. All information on the application procedure, including contact details, is published on the Council’s website.
Is there a criminal enforcement track? If so, who is responsible for it?
Are there any plans to reform the competition law?
the Seimas adopted amendments to the Law on Competition which will transpose the provisions of the Directive of the European Parliament and Council into national law, ensuring uniform regulation of the activities of competition authorities across the EU, with regard to such matters as independence, resources, powers and sanctions.
When did the last review of the law occur?
Adopted law amendments will enable the authority to apply the EU antitrust rules more effectively, for instance, conduct simultaneous inspections, use technologically advanced equipment helping to detect an alleged infringement, as well as have qualified staff able to conduct legal and economic assessment when investigating the infringements. More clarity has been brought to the rules relating to leniency and reduction of fines, according to which undertakings that provide evidence about an anticompetitive agreement to the Council can expect an immunity from fines also in cases when the Competition Council has already launched an investigation, but has not yet conducted an inspection or does not otherwise have sufficient evidence for proving infringement. Other equally significant changes in the law concern clarifications on parental liability and succession so that companies could not escape fines through corporate restructuring.
Do you have a separate economics team? If so please give details.
Yes, a separate Economic Analysis Group was established in 2018. The unit has five dedicated economists, one of them has a PhD in economics.
Has the authority conducted a dawn raid?
Yes. Between 2010 and 2019, the authority carried out 79 dawn raids, five of them in 2019.
Has the authority imposed penalties on officers or directors of companies for offences committed by the company?
Sanctions on directors may only be imposed by courts upon the proposal by the Council following the final ruling in the respective case. In 2018, Vilnius Regional Administrative Court, for the first time in the Lithuanian case law, restricted the right of three directors to occupy managerial positions in the public or private sector for four years. Due to the fact that one director failed to leave the managerial position in a company that was involved in a cartel agreement, the District Court of Vilnius later imposed an additional fine against that person. In 2019, after the final court ruling personal liability and fines were imposed on two directors of companies. Court decisions regarding personal liability for 16 directors and individual fines of up to €14,500 per person are pending in courts.
What are the pre-merger notification thresholds, if any, for the buyer and seller involved in a merger?
The intended merger must be notified to the Competition Council and its permission must be obtained where the combined aggregate income of the economic entities concerned in the business year preceding the merger exceeds €20 million and the aggregate income of each of at least two economic entities concerned in the business year preceding the merger exceeds €2 million.
Are there any restrictions on minority investments?
What discounts are available to companies that cooperate with cartel investigations?
The Leniency Rules (new version coming into force on 1 November 2020) provide for a possibility of full immunity from a fine for the first company to hand over evidence of a cartel or a vertical price-fixing arrangement to the Council before the Council has enough evidence allowing to carry out a dawn raid in the premises of suspected companies or before the Council has carried out a dawn raid or has enough evidence to state that the companies committed an infringement. If a company does not satisfy all conditions set by the law to apply for a full immunity from a fine, such company can apply for a reduction of a fine if it provides to the Competition Council evidence which are of great significance in proving the infringement. A fine might be reduced from 50 to 75 per cent.
In addition, acknowledging the findings of the Council and one’s liability during the investigation can be considered as a mitigating circumstance. In cases where such an acknowledgment allows for a more efficient finalising of a case, a 15 per cent reduction of a fine is given for undertakings for a written acknowledgement of the facts that were established by the Council, their legal assessment and the maximum fine to be imposed (settlement procedure). Additionally, cooperation by a company with the Competition Council outside the scope of the Leniency Notice and beyond its legal obligation to do so may also be considered as a mitigating circumstance. A total combined reduction of a fine (outside the leniency programme) for all mitigating circumstances listed in the Law on Competition (including voluntary prevention of the detrimental consequences of the violation, compensation for damage caused, voluntary termination of the violation, non-implementation of restrictive practices, among other) cannot exceed 50 per cent.
Does the authority conduct criminal investigations and prosecutions for cartel activity? If not, is there another authority in the country that does?
Competition infringements are not criminalised in Lithuania, so no authority can conduct criminal investigations for cartel activity.
Lithuania: from the enforcer's competition economists
Address: Jogailos g. 14, LT-01116 Vilnius, Lithuania
Tel: +370 5 212 7608
Fax: +370 5 212 6492
Head of Economic Analysis Group
Email: [email protected]
Questions and answers
How many economists do you employ?
The Council employs five dedicated economists. All of them are embedded within the Economic Analysis Group.
Do you have a separate economics unit?
Do you have a chief economist?
Yes. Julius Bučys, Head of Economic Analysis Group.
To whom does the chief economist report?
To the Chairman.
Does the chief economist have the power to hire his or her own staff?
When employing public servants and persons working under the contract of employment, an open competition procedure is organised and the participation of the Chief Economist (head of unit) is usually ensured. According to the regulations of the unit and job description of the unit head, the head also provides to the Chairman proposals regarding the necessity of new staff.
How many of your economists have a PhD in industrial economics?
None. One of the economists has a PhD in economics.
Does the agency include a specialist economist on every case team? If not, why not?
No. Due to the limited number of economists, they are included only on the teams of complex cases, where there is a need of economic analysis. Economists are, however, consulted on most of the cases even when they are not part of the case team.
Is the economics unit a ‘second pair of eyes’ during cases – is it one of the agency’s checks and balances? If not, why not?
Yes, the Economic Analysis Group reviews all the cases. As mentioned above, in complex cases an economist is involved throughout the Investigation, but there is a final check from the chief economist in these cases as well.
How much economics work is outsourced? What type of work is outsourced?
Owing to budgetary restrictions, the Lithuanian Competition Council does not outsource economic consultations. However, in more complicated cases the Council refers to our pro-bono foreign external academic advisors, as well as to the European Commission.