Article 5 of the Law on Competition and Article 101 of the Treaty on the Functioning of the European Union prohibit agreements between companies which prevent, restrict or distort competition, and the breach of these laws may result in heavy fines. Anti-competitive agreements include, for example, price-fixing or market-sharing cartels which do not create other companies competitive pressure for launching new products, improving their quality and decreasing prices, which leads to higher prices for consumers.
Agreements indicated below are generally considered anti-competitive:
- fixing prices;
- limiting production;
- sharing markets or customers;
- sharing commercially sensitive information;
- bid rigging;
- fixing resale prices (between manufacturers and distributors).
Vertical agreements, which are concluded between two or more undertakings operating at different levels of the production or distribution chain, do not normally restrict competition when they determine the price and quantity for a specific sale and purchase transaction. Although a restriction of competition may occur if the agreement contains restraints on the supplier or buyer, vertical agreements might have positive effects and may help a manufacturer to enter a new market.
The General Block Exemption Regulation and the Guidelines on Vertical Restraints adopted by the European Commission help other companies conduct their own assessment of vertical agreements of different categories. The Competition Council takes into consideration the provisions set out in the aforementioned Guidelines as well.
Irrespective of the occupied market share, vertical agreements that encompass hardcore restrictions (Article 4 of the General block exemption) and inflict harm on the consumers are considered breaching competition law.
- The first hardcore restriction concerns resale price maintenance;
- Online sales restrictions are prohibited as well, unless certain objective reasons can justify them.
Examples of vertical agreements:
- Exclusive distribution (points 151-167 of the Guidelines);
- Selective distribution (points 174-188 of the Guidelines);
- Single branding (points 129-148 of the Guidelines);
- Exclusive supply (points 192-201 of the Guidelines);
- Franchise agreements (points 43-45, 189-191 of the Guidelines).
Participating in a cartel may result in:
- a fine of up to 10 per cent of the total annual worldwide turnover in the preceding business year;
- personal liability for the manager of the enterprise – restricted right to occupy the managing position for a 3 to 5 year-term and a fine of up to EUR 14,481;
- disqualification from public procurement for up to 3 years;
- victim‘s claims for damages;
- loss of good repute.
If your company has been involved in an anti-competitive agreement, you can submit a leniency application and avoid a fine.
When is the exemption from fines applicable?
In cases when competitors agree to fix prices, share markets or consumers, limit production, and if non-competitors agree to fix prices directly or indirectly.
Exemption from fines – how?
Immunity from fines can be granted to a company if it satisfies the following conditions when applying to Konkurencijos taryba:
- the company has not been a coercer in an anti-competitive agreement (i.e. it has not taken any actions to coerce other undertaking (s) to participate in an anti-competitive agreement);
- freely submits all relevant information on an anti-competitive agreement to Konkurencijos taryba;
- is first to submit information and evidence to Konkurencijos taryba which enables the finding of an infringement or conducting the inspections in connection with an alleged anti-competitive agreement and which was not previously known to the competition authority in order to conduct an inspection or prove an infringement;
- did not reveal the intention to apply for leniency;
- did not destroy or conceal evidence before applying for leniency;
- terminated participation in an anti-competitive agreement (except cases when such participation is considered necessary by Konkurencijos taryba in order to ensure a successful process of an investigation).
From the time of leniency application until the conclusion of the case collaborates with Konkurencijos taryba and satisfies the following requirements:
- provides all relevant information and evidence to Konkurencijos taryba that it becomes aware of;
- remains at the disposal of Konkurencijos taryba to reply promptly to any requests relating to an investigation;
- makes current and, to the extent possible, former employees available for interviews with Konkurencijos taryba;
- did not destroy or conceal relevant information or evidence;
- did not disclose the intention to apply for leniency before Konkurencijos taryba has notified its statement of objections to the parties.
An undertaking that initiated, coordinated or helped others to conclude an anti-competitive agreement may be exempted from fine for participating in such anti-competitive agreement or for helping others to conclude it.
If the investigation has been opened, company (party to an anti-competitive agreement) which provides additional information on an anti-competitive agreement to the authority may be granted a reduction in fine of up to 75 %.
For any questions please contact us by phone +370 5 212 6641 or e-mail email@example.com. Should you decide not to apply for leniency after the consultation, your information will be kept confidential.
More information on leniency can be found here.
If you have evidence about a possible anti-competitive agreement, you can submit it to Konkurencijos taryba and receive a financial award. As envisaged by the Law on Competition, a whistleblower remuneration will constitute 1 per cent of the fines imposed on the infringers, and might range from EUR 1,000 to EUR 100,000.
Evidence of an anti-competitive agreement refers to all relevant data used by Konkurencijos taryba when conducting an investigation and disclosing a a competition law infringement.
Whistleblowers can expect to receive remuneration if:
- they first provide relevant information prior to the authority's decision to open an investigation;
- the evidence in question was gathered in a legal manner.
Persons are invited to provide evidence to Konkurencijos taryba by:
- e-mail firstname.lastname@example.org;
- mail (Jogailos g. 14, Vilnius);
- coming to the authority.
Important: upon request, the identity of whistleblowers will not be disclosed to the parties of the investigation procedure, including undertakings suspected of a competition law infringement.
If you consider providing evidence about an anti-competitive agreement and want to receive more information, you can anonymously contact Konkurencijos taryba for individual consultation with the authority‘s experts by phone +370 5 212 6641 or e-mail email@example.com. Should you decide not to submit evidence after the consultation, information disclosed to the authority will be kept confidential.