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Today, the Seimas has adopted amendments to the Law on Competition and the Law on Local Self-Government, which allow municipalities to enter into in-house contracts with the companies they control and to transfer the management of municipal real estate to them without a competitive procedure.

The adopted amendments allow municipalities to refrain from organising a competitive procedure for selecting suppliers when municipal real estate, such as concert halls, museums, exhibition halls, libraries, cultural centres, sports halls, riding arenas, stadiums, swimming pools, is used for providing public services in the fields of education, culture, sports, and related economic activities if such an object is the only one within the municipality's territory or eldership.

The Legal Department of the Seimas Chancellery, in its conclusion, has stated that the amendments to the above-mentioned laws prepared by the members of the Seimas are contrary to the provisions of the Constitution.

The Competition Council, in its assessment, also identified risks that the amended legal regulations could be contrary to the rulings of the Constitutional Court, the Court of Justice of the European Union, as well as recommendations of the Organisation for Economic Cooperation and Development and could have negative consequences for public finances and consumers.

According to the Competition Council, such an exception would eliminate the element of competition in a significant part of services purchased by municipalities, since these services could be purchased exclusively from companies managed by municipalities, without assessing the impact of such decisions on competition and without creating an opportunity for businesses to compete for the provision of services under the best conditions, for example, by offering the lowest price or the highest quality of services, etc. It would have a negative impact on municipal budgets and consumers, who would be forced to pay more for lower quality services.

Amendments to both the Law on Competition and the Law on Local Self-Government will enter into force after they are signed by the President Gitanas Nausėda.

Last updated: 29 06 2023