COMPETITION COUNCIL: BREAKING THE CARTEL IN THE ORTHOPAEDIC DEVICES PRODUCTION AND TRADING MARKET HAS BROUGHT BENEFITS TO CONSUMERS

22 05 2012

On 17 May, the Supreme Administrative Court of Lithuania (SACL) passed the final and non-appealable ruling upholding the Competition Council’s decision of 20 January 2011 to impose fines on the Association of Providers of Orthopaedic and Rehabilitation Services and nine companies engaged in the production and trading in orthopaedic devices for concluding the cartel agreement. By this ruling the SACL also dismissed the complaint of the Compulsory Health Insurance Fund (CHIF) which infringed the requirement of Article 4 of the Law on Competition to ensure freedom of fair competition.

By its decision, the Competition Council stated that the producers of orthopaedic devices concluded anti-competitive agreements concerning prices of orthopaedic devices, production amounts, and were seeking to share the funds allocated by the CHIF for the reimbursement of orthopaedic devices. The agreements led to an inefficient use of the budget funds, fewer patients could receive the services, patients had to pay higher surcharges for partial recoverable orthopaedic devices. The restricted agreements also caused poorer quality of goods. The CHIF failed to ensure competition among companies, therefore it was recognised that the CHIF infringed the requirements of Article 4 of the Law on Competition.

In the Competition Council’s opinion, its decision had a definite influence on increased competition in the market, since consumers are free to choose the producer of orthopaedic devices after the anti-competitive agreements were broken. In the absence of the agreement setting production amounts of the orthopaedic devices, companies may decide how to efficiently use their production capacities, and to produce the devices according to the demand but not to the established amounts. The state budget funds allocated to the CHIF for reimbursement of actually produced and acquired by the patients orthopaedic devices can also be used more efficiently because of the competitive prices, and the CHIF is able to reimburse for more orthopaedic devices.

It is likely that this favourable situation is undoubtedly affected by the Competition Council’s decision breaking the anti-competitive agreement between the producers of the orthopaedic devices.

For the infringement the undertakings were subjected to the following final fines: UAB Idemus – LTL 235,600; UAB Ortopagalba – LTL 50,730; UAB Ortopedijos centras – LTL 215,365; UAB Ortopedijos klinika – LTL 183,825; UAB Ortopedijos projektai – LTL 158,555; AB Ortopedijos technika – LTL 1,562,275; A. Astrauskas‘ firm Pirmas žingsnis – LTL 324,615; SE Vilties žiedas – LTL 11,210; UAB Ortobatas – LTL 53,770; and Association of Providers of Orthopaedic and Rehabilitation Services – LTL 950.

Competition Council Spokesperson