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1 EURO ALLOCATED TO KONKURENCIJOS TARYBA BROUGHT 6.2 EUROS OF DIRECT EXPECTED BENEFITS TO CONSUMERS

04 03 2022
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Having conducted the annual impact assessment of its activities, the Lithuanian competition authority Konkurencijos taryba calculated that direct expected benefits to consumers over the period of 2019–2021 amounted to an average of EUR 15.6 million per year and exceeded the authority’s annual budget 6.2 times.

Being responsible for competition enforcement in the markets, Konkurencijos taryba bases its work on the criteria of consumer benefits and aims to maximise the direct expected economic benefits to consumers. The ratio between this size and the authority’s annual budget has been the main performance indicator since 2011.

Konkurencijos taryba seeks to create consumer benefits which would exceed the authority’s budget five times, meaning that 1 euro allocated to its activities would bring at least 5 euros of expected benefits.

As in the previous years, the impact assessment was based on the methodology proposed by the Organisation for Economic Cooperation and Development. The calculations reflect consumer savings that are likely to result from the authority’s actions terminating anti-competitive practices by companies and public entities, abuse of a dominant position, and prohibiting mergers or clearing them subject to remedies.

The performance assessment for 2019–2021 showed that the average direct expected benefits to consumers for this period amounted to EUR 15.6 million, while the ratio between the authority’s average annual budget and created benefits was 1:6.2. The numbers resulted from the completion of investigations into the infringements of the Law on Competition in 2019–2021, proposals and recommendations on the amendments to legal acts, as well as merger control, during which the identified competition concerns were eliminated by commitments offered by relevant undertakings, and mergers which were blocked or withdrawn during the review process.

Mainly due to limited reliable data, the assessment does not cover all activities of the authority – there is no assessment of the benefits to consumers resulting, for example, from the supervision of the Law on the Prohibition of Unfair Practices of Retailers, competition advocacy and awareness-raising activities for businesses, public authorities and the society. Besides, it does not include the fines imposed (and collected) by Konkurencijos taryba, as well as indirect benefits of the authority’s decisions deriving from, for instance, its deterrent effect and increased competition in the markets.

Although Konkurencijos taryba seeks to achieve that the ratio between its average three-year budget and direct expected benefits to consumers is at least 1:5, this indicator may not necessarily be achieved at all times. The value of this indicator may be lower if the authority carries out activities which have strategic significance due to their deterrent effect, legal certainty, assurance of the ability to perform its functions or the importance of a particular sector, but which create less or no direct economic benefits to consumers.