- CHAPTER I GENERAL PROVISIONS
- CHAPTER II RESTRICTIVE PRACTICES
- CHAPTER III UNFAIR COMPETITION
- CHAPTER IV INSTITUTION CONTROLLING RESTRICTIVE PRACTICES
- CHAPTER V INVESTIGATION OF RESTRICTIVE PRACTICES AND EXAMINATION OF CASES
- CHAPTER V ILIABILITY FOR INFRINGEMENT OF THE LAW ON COMPETITION
- CHAPTER VII APPLICATION OF THE EUROPEAN UNION COMPETITION RULES
REPUBLIC OF LITHUANIA
LAW
ON COMPETITION
23 March 1999 – No VIII-1099
(As last amended on 24 September 2009 – No XI-434)
Vilnius
CHAPTER I
GENERAL PROVISIONS
Article 1. Purpose of the Law
1. The purpose of this Law is to protect freedom of fair competition in the Republic of Lithuania.
2. This Law shall regulate the activities of entities of public administration and undertakings, which restrict or may restrict competition as well as acts of unfair competition, shall establish the rights, duties and liabilities of the said authorities and undertakings and the legal basis for the control of restriction of competition and unfair competition in the Republic of Lithuania.
3. This Law seeks to harmonise the Lithuanian and the European Union law regulating competition relations.
4. The provisions of this Law shall implement the EU legal act specified in the Annex to this Law.
Article 2. Application of the Law
1. This Law shall prohibit undertakings from performing acts which restrict or may restrict competition, regardless of the character of their economic activity, except in cases where this Law or laws governing individual areas of economic activity provide for exemptions.
2. This Law shall also apply to the activities of undertakings registered outside the territory of the Republic of Lithuania if the said activities restrict competition on the domestic market of the Republic of Lithuania.
3. This Law shall not apply to the activities of undertakings which restrict competition on foreign markets, unless international agreements to which the Republic of Lithuania is a party provide otherwise.
4. Where international agreements ratified by the Seimas of the Republic of Lithuania establish different requirements to protect competition, the provisions of the said agreements shall apply.
Article 3. Definitions
1. “Economic activity” means any type of manufacturing, commercial, financial or professional activities, associated with purchase or sale of goods, except for acquisitions by natural persons intended for personal and household needs.
2. “Goods” means any object of purchase or sale, including all kinds of services and works, rights or securities. Purchase or sale represents transfer or acquisition of goods based on the contracts of purchase and sale, supply, contracts of independent work or other transactions. Articles (property) transferred under the lease or loan for use contracts shall be comparable to goods.
3. “Restriction of competition” means any acts which prevent competition in a relevant market or may weaken, distort or otherwise have a negative effect on competition.
4. “Undertaking” means an enterprise, a combination of enterprises (associations, amalgamations, consortiums, etc.), an institution or an organisation, or other legal or natural persons which perform or may perform economic activities in the Republic of Lithuania or whose acts affect or whose intentions, if realised, could affect economic activity in the Republic of Lithuania. Entities of public administration of the Republic of Lithuania shall be considered to be undertakings if they engage in economic activity.
5. “Relevant market” means the market of certain goods in a certain geographic territory.
6. “Product market” means the aggregate of goods, which from the consumers’ point of view are appropriate substitutes according to their properties, application and prices.
7. “Geographic territory (geographic market)” means the territory in which the conditions of competition in a relevant product market are in essence similar for all undertakings and which, taking into consideration the said fact, may be distinguished from adjacent territories.
8. “Conditions of competition” means various economic parameters of purchase or sale, the most important thereof being prices, discounts and markups or other payments as well as factors affecting them (legal restrictions on economic activity, aid granted by entities of public administration, production technologies and costs, peculiarities of the use and consumption of goods, transportation possibilities, etc.).
9. “Competitors” means undertakings which face or may face mutual competition in the same relevant market.
10. “Agreement” means contracts concluded in any form (written or oral) between two or more undertakings or concerted practices between undertakings, including decisions made by any combination (association, amalgamation, consortium, etc.) of undertakings or by representatives of such combination.
Version of paragraph 11 before 1 January 2010:
11. “Dominant position” means the position of one or more undertakings in the relevant market directly facing no competition or enabling to make a unilateral decisive influence in such relevant market by effectively restricting competition. Unless proved otherwise, an undertaking with the market share of not less than 40 per cent shall be considered to enjoy a dominant position in the relevant market. Unless proved otherwise, each of a group of three or a smaller number of undertakings with the largest shares of the relevant market, jointly holding 70 per cent or more of the relevant market shall be considered to enjoy a dominant position.
Version of paragraph 11 as of 1 January 2010:
11. “Dominant position” means the position of one or more undertakings in the relevant market directly facing no competition or enabling to make a unilateral decisive influence in such relevant market by effectively restricting competition. Unless proved otherwise, an undertaking (except for an undertaking engaged in retail trade) with the market share of not less than 40 per cent shall be considered to enjoy a dominant position within the relevant market. Unless proved otherwise, each of a group of three or a smaller number of undertakings (except for undertakings engaged in retail trade) with the largest shares of the relevant market, jointly holding 70 per cent or more of the relevant market shall be considered to enjoy a dominant position. Unless proved otherwise, an undertaking engaged in retail trade with the market share of not less than 30 per cent shall be considered to enjoy a dominant position within the relevant market. Unless proved otherwise, each of a group of three or a smaller number of undertakings engaged in retail trade with the largest shares of the relevant market, jointly holding 55 per cent or more of the relevant market shall be considered to enjoy a dominant position.
12. “Group of associated undertakings” means two or more undertakings which, due to their mutual control or interdependence and possible concerted practices are considered as one undertaking when calculating joint income and market share. Unless proved otherwise, a group of associated undertakings shall be considered to be comprised of every undertaking concerned and:
1) of undertakings in which, as in the undertaking concerned, the shareholding of one and the same natural person or the same natural persons accounts for 1/4 or more of the authorised capital or carries 1/4 or more of all the voting rights;
2) of undertakings which are subject to joint management or have a joint administrative subdivision with the undertaking concerned or half or more of whose members of supervisory board, administrative board or other management or supervisory body are also members of the management or supervisory bodies of the undertaking concerned;
3) of undertakings in which the shareholding of the undertaking concerned accounts for 1/4 or more of the authorised capital or 1/4 or more of all the voting rights or which have a commitment to co-ordinate decisions relating to their economic activity with the undertaking concerned, or of undertakings in which the responsibility for the meeting of their obligations to third parties has been assumed by the undertaking concerned, or of undertakings which have committed to transfer all or part of their profit or have transferred the right to make use of 1/4 or more of their assets to the undertaking concerned;
4) of undertakings whose shareholding in the undertaking concerned accounts for 1/4 or more of the authorised capital or 1/4 or more of all the voting rights or with which the undertaking concerned has committed itself to co-ordinate decisions relating to its economic activity, or which have assumed the responsibility for meeting the obligations of the undertaking concerned to third parties, or to which the undertaking concerned has committed to transfer all or part of its profit or has granted the right to make use of 1/4 or more of its assets;
5) of undertakings connected directly or indirectly through other undertakings with the undertakings referred to in subparagraphs 1, 2, 3 and 4 of paragraph 12 of this Article in any way specified in subparagraphs 1, 2, 3 and 4 of paragraph 12 of this Article.
13. “Market share” means the ratio, expressed as a percentage, of the sales or purchases of an undertaking or a group of associated undertakings to the total sales or purchases in the relevant market.
14. “Concentration” means:
1) merger, when one or more undertakings which terminate their activity as independent undertakings are joined to the undertaking which continues its operations, or when a new undertaking is established from two ore more undertakings which terminate their activity as independent undertakings;
2) acquisition of control, when one and the same natural person or persons already controlling one or more undertakings, or one or more undertakings, by agreement, jointly set up a new undertaking or gain control over another undertaking by acquiring an enterprise or part thereof, all or part of the assets of the undertaking, shares or other securities, voting rights, by contract or by any other means.
15. “Control” means any rights arising from laws or transactions that entitle a legal or natural person to exert a decisive influence on the activity of an undertaking, including:
1) the right of ownership to all or part of the assets of the undertaking or the right to use all or part of such assets;
2) other rights which confer a decisive influence on the decisions or the composition of the undertaking’s personnel.
16. “Controlling person” means a legal or natural person having or acquiring the right of control over an undertaking. A controlling person may be a citizen of the Republic of Lithuania, a foreign national or a stateless person, or an undertaking as well as entities of public administration. Spouses, parents and their minor children (adopted children) shall be considered as one controlling person. Where two or more legal or natural persons, acting by agreement, acquire control over an undertaking which is subjected to concentration, each of these legal or natural persons shall be considered a controlling person.
17. “Decisive influence” means the situation when the controlling person implements or is in the position to implement his decisions in relation to the economic activity, decisions of the bodies or composition of the personnel of the controlled undertaking.
18. “Assets of an undertaking” means tangible fixed assets and other fixed assets used in economic activity.
Article 4. Duty of Entities of Public Administration to Ensure Freedom of Fair Competition
1. When carrying out the assigned tasks related to the regulation of economic activity within the Republic of Lithuania, entities of public administration must ensure freedom of fair competition.
2. Entities of public administration shall be prohibited from adopting legal acts or other decisions which grant privileges to or discriminate against any individual undertakings or their groups and which give rise to or may give rise to differences in the conditions of competition for undertakings competing in the relevant market, except where the difference in the conditions of competition cannot be avoided when the requirements of the laws of the Republic of Lithuania are complied with.
CHAPTER II
RESTRICTIVE PRACTICES
PROHIBITED AGREEMENTS
Article 5. Prohibition of Agreements Restricting Competition
1. All agreements which have the purpose of restricting competition or which restrict or may restrict competition shall be prohibited and shall be void from the moment of conclusion thereof, including:
1) agreements to directly or indirectly fix prices of certain goods or other conditions of purchase or sale;
2) agreements to share the product market on a territorial basis, according to groups of buyers or suppliers or in any other way;
3) agreements to fix production or sale volumes for certain goods as well as to restrict technical development or investment;
4) agreements to apply dissimilar (discriminating) conditions to equivalent transactions with individual undertakings, thereby placing them at a competitive disadvantage;
5) agreements 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.
2. When concluded between competitors, the agreements listed in subparagraphs 1, 2, 3 and 4 of paragraph 1 of this Article shall be, in all cases, considered as restricting competition.
3. (Repealed on 1 May 2004)
4. This Article may be not applicable to agreements concluded between undertakings which, due to their small influence, cannot substantially restrict competition. The requirements, terms and conditions in respect of such agreements shall be laid down by a relevant resolution of the Competition Council of the Republic of Lithuania (hereinafter referred to as the Competition Council).
Article 6. Exemption
1. Article 5 of this Law shall not apply where the agreement promotes technical or economical progress or improves the production or distribution of goods, and thus creates conditions for consumers to receive additional benefit, also where:
1) the agreement does not impose restrictions on the activity of the parties thereto, which are not necessary for the attainment of the objectives referred to in this Article;
2) the agreement does not afford the contracting parties the possibility to restrict competition in a large share of the relevant market.
2. An agreement complying with the conditions set forth in paragraph 1 of this Article shall be effective from the moment of conclusion thereof (ab initio) without any prior decision by the Competition Council. In the event of a dispute concerning the compliance of the agreement with the provisions of paragraph 1 of this Article, the burden of proof concerning the compliance shall fall upon the party to the agreement benefiting from this exemption.
3. The Competition Council shall have the right to pass regulations and define the groups of agreements as well as conditions under which the agreement meets the conditions set forth in paragraph 1 of this Article.
4. The Competition Council may revoke the right of undertakings to take advantage of the exemption provided for in legal acts specified in paragraph 3 of this Article, where it is established that, in certain cases, the effect of the agreement is incompatible with the provisions of paragraph 1 of this Article.
Article 7. (Repealed on 1 May 2004)
Article 8. Individual Exemption
1. (Repealed on 1 May 2004)
2. (Repealed on 1 May 2004)
3. (Repealed on 1 May 2004)
4. (Repealed on 1 May 2004)
SECTION ONE