REPUBLIC OF LITHUANIA
LAW
ON
COMPETITION
Chapter 1
General Provisions
Article 1. Objectives
1. This Law shall regulate the relations which arise from
activities of economic entities, officials representing them,
and bodies of State authority or government which restrict
competition or compete unfairly in the commodity markets of the
Republic of Lithuania, as shall also define the responsibility
for these activities if they violate the interests of the
consumers or the economy.
This Law shall apply to the regulation of relations
throughout the territory of the Republic of Lithuania which
result from competition-restricting activities or unfair
competition, with the exception of relations regulated by other
laws.
Article 2. Basic Definitions
Definitions of concepts used in this Law:
"Economic entities" - legal and natural persons engaged in
commercial-economic activity, regardless of its character, the
form of property or the type of enterprise;
"Goods" - the result of activity, i.e. production and
service meant for realization;
"Market" - the aggregate of certain goods involved in
purchase-sale processes on the territory and parts of the
Republic whose qualities, use and price are compared in such a
way that producers and consumers can substitute one for the
other in the process of manufacturing and consumption;
"Competition" - emulation during which economic entities, by
acting independently in the market, restrict one another's
abilities to attain a dominant position in that market, and
promote the production and increase the effectiveness of goods
necessary to consumers;
"Dominant position" - the position of an economic entity in
the market which allows for the possibility to unilaterally and
decisively influence that market. The economic entity cannot be
considered to have a dominant position if its market share of
certain goods is no more than 40 per cent;
"Market concentration" - the merger of two or more economic
entities or the acquisition by one economic entity of the right
to have either all or part of the total capital of another
economic entity at its disposal, as well as the conclusion of
contracts which have influence over the managing decisions made
by one of the economic entities, due to which a dominant
position in the market is attained and competition is
restricted.
Chapter 2
Activities which Restrict Competition
Article 3. Prohibition of Abusing the Dominant Position
1. Activities of economic entities having a dominant
position in the market which restrict or may restrict
competition by infringing economic interests shall be
prohibited.
2. Economic entities shall be prohibited from engaging in
the following activities which restrict competition:
1) creating hindrances for competing economic entities to
enter the market or to develop the activities of already
existing ones;
2) abusing the dominant position by excluding competing
economic entities from the market;
3) restricting production, decreasing the amount of sales
and purchase of goods, or suspending trade with the intention to
create a shortage in the market or to influence prices, and
consequently harming the consumers;
4) anticipating discriminating economic conditions in
contracts of an identical nature with different partners; and
5) establishing fixed selling prices to third persons in
contracts with suppliers or purchasers.
Article 4. Prohibition of Agreements (Coordinated
Activities) between Economic Entities which
Restrict or Impede Competition
Agreements or coordinated activities between competing
economic entities (or potential competitors) shall be prohibited
if they restrict or impede competition. Considered as such shall
be agreements and coordinated activities concerning:
1) prices (including those established by auctions or
tenders), discounts, markups and other payments;
2) volume of production;
3) division of the market according to territorial
principle, volume of sales and purchases, types of goods, groups
of purchasers and sellers, or otherwise;
4) restriction of other economic entities from being ousted
from or entering into the market (or part of it); and
5) refusal to conclude a contract with certain sellers or
purchasers.
Article 5. Exceptions to Prohibited Activities
The activities enumerated in Articles 3 and 4 of this Law
may be considered to be in agreement with the Law if it is
proved that they result in:
1) steady reduction of consumer prices; or
2) improvement of the quality of goods.
Article 6. Prohibition of Bodies of State Authority
and Government from Restricting Competition
Bodies of state authority and government shall be prohibited
from adopting standard acts or carrying out activities which
restrict the independence of economic entities or the conclusion
of economic contracts, which impede the foundation,
reorganization or restructuring of existing economic entities,
or which grant privileges to or discriminate separate economic
entities, or which otherwise restrict competition.
Heads of bodies of state authority and government shall be
prohibited from taking up commercial-economic activities, owning
personal enterprises, or holding positions in managing bodies of
economic entities.
Chapter 3
Unfair Competition
Article 7. Prohibition of Activities of Unfair Competition
Economic entities shall be prohibited from carrying out the
following activities of unfair competition:
1) the propagation of misleading, inaccurate or distorted
information (including advertisements) which may cause another
economic entity or its reputation to suffer;
2) the misleading of consumers through false information
regarding the quality of goods, the characteristics of
utilization, the place and manner of production, and the amount
and price of sale;
3) the willful use of the name, product name, trademark,
marking, or form of product packaging or appearance of another
economic entity; and
4) the acquisition, use and publishing without consent of
information concerning the industrial and commercial activities
and the scientific-technical investigations and results of an
economic entity.
Chapter 4
Control of Activities which are Unfair or which Restrict
Competition
Article 8. The Institution of Price and Competition
Control
The functions of supervision of observance of this Law as
well as the Law on Prices within the Republic of Lithuania shall
be executed by the Institution of Price and Competition, the
director of which shall be appointed by the Government.
The Competition Council shall be formed to adopt decisions
related to issues of prices and competition within the scope of
this Law. The Competition Council shall consist of 7 members who
shall be appointed by the Government for a term of 3 years. At
least 4 of the members shall be appointed taking into account
the recommendations of consumer, scientific, business and
industrial organizations, and the others shall be assigned from
the Institution of Price and Competition. The Competition
Council shall adopt decisions related to the application of the
Law by a 2/3 majority vote. The regulations of both the
Competition Council and the Institution of Price and Competition
shall be approved by the Government.
With the aim of protecting the economy and consumer rights,
the Institution of Price and Competition shall observe the
situation in the market and fluctuations of market prices, shall
accumulate information concerning possibilities for meeting
consumer needs, shall periodically provide recommendations to
the Government on the formation of price policies, and shall
perform other functions established in its regulations.
The Institution of Price and Competition shall have the
right to obtain information from both economic entities and
managing bodies as well as explanations - oral or written -
which are necessary to carry out the functions established in
this Law and in the regulations of the Institution.
Article 9. Powers of the Institution of Price and
Competition
The Institution of Price and Competition, upon establishing
that economic entities or managing bodies have violated this
Law, shall compile material concerning the issue and present it
to the Competition Council for the adoption of a decision. On
the basis of the Competition Council's decision, the Institution
of Price and Competition may seek the termination of illegal
practices through negotiations with the economic entity, if they
have resulted in minor negative changes (decrease in the
efficiency of production and distribution of goods, restriction
of free trade) and provided that circumstances do not object to
negotiation. Upon reaching an agreement, its results and terms
for the termination of illegal practices shall be concluded in
writing.
In other cases or if an agreement is not reached through
negotiation, the Institution of Price and Competition has the
right to:
1) obligate economic entities to terminate agreements and
practices which violate this Law;
2) adopt a decision to lower the prices if they have
increased as a consequence of practices prohibited in this Law;
3) obligate that illegal use of a company name, trademark,
product marking or inaccurate indication of a product's origin
be terminated, and may detain goods due to those infringements;
and
4) apply to either the Government of Lithuania or the court
to terminate illegal practices of managing bodies or to repeal
adopted decisions.
Chapter 5
Protection of Competition in the Process of Concentration
of Market Structures
Article 10. Control of the Concentration of Market
Structures
If by virtue of agreement or acquisition of a controlling
interest the maximum concentration of market structures
(concentration of capital), which is established by the
Competition Council, is exceeded, the party or parties involved
in the concentration must notify the Institution of Price and
Competition before undertaking any steps which may alter the
permanent market structure and degree of its concentration.
The Institution of Price and Competition, upon receiving
notification from the interested economic entities about a
planned concentration of market structures, must adopt a
decision concerning the granting of permission within one month.
Upon an agreement between the parties, the deadline for the
adoption of the decision may be extended, but for no longer than
9 months.
If within the indicated periods of time the Institution of
Price and Competition does not make a decision, the economic
entities shall acquire the right to carry out the planned
concentration of market structures.
Article 11. Permitted and Prohibited Concentrations
of Market Structures
Upon the execution of a concentration of market structures
which was not announced in advance and for which permission of
the Institution of Price and Competition was not granted,
economic sanctions prescribed by Article 12 of this Law shall be
applied.
Permission to concentrate market structures which has not
been approved by the Institution of Price and Competition may be
granted by the written decision of the Government of the
Republic of Lithuania. Such permission may be granted if the
parties involved in the concentration provide substantiation
proving that this action will result in the increase of economic
efficiency of production or competitiveness of goods, which
cannot be achieved in any ways other than by the suggested
concentration of market structures.
Chapter 6
Responsibility for Violations of the Law
Article 12. Consequences of Violating the Law
Decisions of the bodies of State government regarding
violations of the Law may be appealed to the court.
Economic entities, having violated this Law, must:
1) execute the instructions of the Institution of Price and
Competition to discontinue the activities, restore the previous
situation, terminate or alter the agreement, and fulfill other
obligations;
2) recover the losses incurred by a partner; and
3) fulfill the sanctions imposed by the Competition Council
as provided by this Law.
The Competition Council shall have the right to:
1) impose fines comprising up to 10 per cent of the total
annual gross income on economic entities for infringement of
Articles 3, 4, 7, 10 and 11 of this Law, nonobservance of the
agreement concerning the termination of illegal practices, or
intentional failure or untimely compliance with obligations and
instructions;
2) impose fines amounting up to 3 per cent of the annual
gross income on economic entities for submission of misleading
information; and
3) impose fines equaling up to 3 months average earnings on
officers of bodies of State government and economic entities for
the intentional failure or untimely compliance with the
directions issued by the Institution of Price and Competition as
prescribed by this Law, or for submission of misleading
information.
Article 13. Exaction of Fines
Fines shall be transferred to the State budget within one
month of the date that the economic entity or officer receives
the decision of the Institution of Price and Competition to
impose a fine.
A fine shall be exacted from the income of an economic
entity without suit.
Article 14. Appeal against Decisions of the Institution
of Price and Competition
Economic entities, managing bodies and officers may, within
one month of the date the decision of the Institution of Price
and Competition is received, apply to the court to revoke or
alter the said decision and recover losses.
Appeals to the court shall not suspend compliance with
directions and decisions of the Institution of Price and
Competition unless the court stipulates otherwise.
Decisions of the Institution of Price and Competition and
their motives shall be publicly announced.
Article 15. Procedure for Recovering Losses
Losses incurred by economic entities or consumers due to
violation of this Law must be compensated for in the procedure
established by law.
Losses incurred by economic entities due to decisions made
by bodies of State authority and government or the Institution
of Price and Competition which violate the requirements of this
Law shall be compensated with the funds of either the respective
bodies of government or the State budget, and shall later be
exacted from the violators.
Losses shall be exacted by suit.
VYTAUTAS LANDSBERGIS
President
Supreme Council
Republic of Lithuania
Vilnius
15 September 1992
No.I-2878
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