MUNICIPAL DECISION TO ESTABLISH VILNIUS VEŽA VIOLATES THE BASIC PRINCIPLES OF COMPETITION
Press release 22/10/2014
The Competition Council (KT) found that having established and favoured a municipal company Vilnius veža, Vilnius City Municipality (Municipality) breached Article 4 of the Law on Competition. The KT obligated the Municipality to repeal or amend the decision to establish Vilnius veža within 3 months after the KT‘s resolution is publicly announced.
“Regretfully the Municipality has once again become an example of legal nihilism and disrespect to the constitutional principles of economic activity” – says Jūratė Šovienė, the Deputy Chair of the KT.
In 2012 - 2014 the Municipality granted to Vilnius veža subsidies amounting to at least 1 600 000 litas (463 392 euros) and favoured the municipal company with various privileges, e.g. obtaining documents necessary for entering the market of taxi services, promoted the services provided by Vilnius veža on the Municipality’s official website, offered consumers to use the services provided by the municipal company and other.
Having evaluated all the circumstances, the KT also found that the establishment of Vilnius veža and the decisions in favour of the company did not and could not solve the problems within the market of taxi services raised by the Municipality. According to the KT, the Municipality as a supervisor of taxi services had all instruments to address the problems by legal means rather than introducing a new player into already competitive market. KT clearly stated that the Municipality favoured Vilnius veža and, thus, discriminated against other market participants. The KT also noted that Vilnius veža does not provide any exceptional services – there are at least a couple of other market participants that provide the same or broader spectre of services.
The investigation concerning Vilnius veža is already the eighth investigation related to anticompetitive actions by the Municipality. Courts upheld most of the KT’s decisions on the competition restricting decisions adopted by the Municipality.