AB LIETUVOS TELEKOMAS SANCTIONED FOR MISLEADING ADVERTISING

Having examined the findings of the investigation conducted thereby and upon hearing the explanations of the representatives of AB Lietuvos telekomas the Competition Council passed the decision concerning advertising statements published by the company during the autumn advertising campaign Ruduo 2005 promoted through the publications Namų linija, flyers Atvirkščias pasiūlymas and the corporate website. The advertising statements used by AB Lietuvos telekomas and specified in the Resolution of the competition authority were recognised misleading as being incomplete, able to mislead the users of advertising concerning the final price of the interne access installation and ultimately affect their economic behaviour, - decisions or actions related to the installation of the internet access facilities. For this infringement of Art. 5 of the Law on Advertising the Competition Council imposed a sanction upon AB Lietuvos telekomas of LTL 16 500.

Having conducted the ex officio investigation the Competition Council concluded that statements contained in the advertising material inducing the user to take advantage of income tax refund scheme while acquiring a PC for 1 LTL and installing the internet service Takas iDO, were misleading. AB Lietuvos telekomas was using its misleading advertising statements in its publication Namų linija, distributed in August 2005, and during the promotion campaign Ruduo 2005 from 16 August to 30 September 2005. On the basis of the proposals submitted to the consumer during the action a potential buyer could reasonably believe that having acquired a computer for LTL 1 in the period covered and installed the internet service Takas iDO provided by AB Lietuvos telekomas for LTL 2772 on the basis of three years’ duration hire-purchase contract with a monthly instalment of LTL 77, he will be entitled to a refund of 33% of the total payments. Having declared his income and taken advantage of the tax refund facility a user could expect to be refunded 33% of the amount paid, i.e., pay for the internet line only LTL 51.59 per month. Actually the user will not be able to take advantage of the tax refund scheme, since part of the payments will be made only in 2007 and 2008. In accordance with the effective tax refund scheme a resident of the Republic of Lithuania having acquired, in the course of three years, one personal computer with installed software and (or) having obtained the internet access and acquired the equipment required for the internet connection, is entitled to the refund of part of the payment from the annual taxable income only provided payments for the computer and the internet access have been made in the period from 1 January 2004 until 31 December 2006. Therefore, anyone acquiring a computer under a leasing agreement whereby the instalment obligations will extend beyond 31 December 2006 will not be entitled to the refund of amounts from his annual taxable payments when declaring taxes for the year 2007 and the subsequent years.