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THE COURT ACKNOWLEDGED THE ASSESSMENT OF THE ACTIONS OF THE VILNIUS MUNICIPALITY AS RIGHTFUL

19 01 2009

The Supreme Administrative Court of Lithuania passed the final and unappealable ruling in the case initiated on the basis of the claim by Universali Arena, UAB (former Rubicon eventus, UAB) challenging the Resolution passed by the Competition Council concerning the compliance of the actions of the Vilnius Municipality with Article 4 of the Law on Competition when procuring the services from Rubicon eventus, UAB.

The Court concluded that the Competition Council had legitimately and rightfully concluded that the agreement between the Vilnius Municipality with the applicant company had been privileging the latter, and caused competition differences in the market for the lease of the premises suitable for hosting events in the territory of Vilnius. The agreement concluded between the Municipality of Vilnius and the company prevented other entities operating in the same market from offering their services. The Panel of Judges repeatedly referred to the provisions of Article 4 of the Law on Competition of the Republic of Lithuania whereby the public and local authorities are obliged to ensure equal conditions to compete for all undertakings operating in a certain market when passing the decisions that may affect the competition conditions in a relevant market. The need for the Vilnius Municipality to procure the services exclusively from the former Rubicon eventus, UAB has not been caused by any objective criteria. Then the Municipality administrations did not even consider a possibility to procure the services necessary for the organisation of events from other entities.

The Court recognised the Resolution of 20 September 2007 of the Competition Council as legitimate and duly grounded. The Resolution passed by the national competition authority established that the Council of the Vilnius Municipality, by its obligation to the administration of the Municipality to procure the services for LTL 1.5 m each year from Rubicon eventus, UAB thus securing the continuous funding flows to a single entity had created different competition conditions for the undertakings operating in the market. There are other entities operating in the relevant service market and offering comparable services, and, for hosting the non-commercial events Vilnius Municipality could rent the premises not only from Universali arena, UAB, managing the universal “Siemens“ arena, but also from other entities, who operate as managers of, for instance, “Utenos” entertainment arena, the universal hall “Sportima“, “Forum Palace“ centre, etc. The agreement in itself created exceptional conditions for a single selected entity that did not need to compete in terms of prices and quality for a share of its revenues.

Having established the infringement, the Competition Council by its Resolution of 20 September 2007, obligated the Administration of the Vilnius Municipality to terminate the agreement that comes into conflict with the Law (as the agreement concerning the procurement of the services from Rubicon eventus, UAB was concluded as a long-term obligation until 2012) or to amend the provisions of the agreement so that they are compliant with the requirements of Article 4 of the Law on Competition.

Competition Council Spokesperson