BALTIC COMPETITION CONFERENCE: FROM DIGITAL BUSINESS MODELS TO INCENTIVES FOR DAMAGE ACTIONS 

With the numbers of companies moving their businesses online growing, the problems related to digital markets are becoming increasingly relevant for national competition authorities. It is a task for each competition authority to continuously strengthen its investigative capacities and technological skills, as well as develop close cooperation with other counterparts and sector regulators in order to better understand the functioning of digital business models and be able to detect cases of anti-competitive behaviour. The role of small competition authorities in the digital world and other topics were discussed during the Baltic Competition Conference on 18 May.

In times of digitalisation and globalisation there is some doubt as to whether small competition authorities will not be left behind in enforcing competition rules in markets where the influence of tech companies and digitalisation processes is increasingly growing. According to the speakers Philip Marsden, Deputy Chair of the Bank of England’s Enforcement Decision Making Committee, and Šarūnas Keserauskas, Chairman of the Lithuanian competition authority, there is place even for small competition authorities to enforce competition rules in the digital world, especially if they act hand in hand with each other, increase mutual cooperation and do their advocacy job.

The remote conference, which was attended by almost 120 competition law practitioners, businesses, public sector and academic community, also focused on the developments and legislative initiatives in the field of private competition law enforcement. Niklas Brueggemann, Policy Officer at DG COMP, European Commission, drew the participants’ attention to the importance for the injured parties to defend their rights when seeking full compensation for damages caused by competition law infringements. The speaker also noted that the pandemic has not impeded the dynamic development of damages claims in private enforcement all over Europe, which was supported by a brief overview of several cases that are still pending against the Court of Justice of the European Union.

Although the provisions of the EU Damages Directive were transposed into the Lithuanian law in 2017, private competition enforcement is still rather rare in practice. This problem was discussed by Dina Lurje, Deputy Chairwoman of the Lithuanian Competition Council.

“According to our calculations, the value of tenders which were subject to investigations by the authority and in which bid-rigging was detected in 2017–2019 alone amounted to almost EUR 5 million. However, damage to the state budget and taxpayers is not compensated because purchasing authorities do not file damage claims”, said D. Lurje.

She pointed out that in order to address this problem, the Competition Council had proposed to the legislators amendments envisaging that a rebuttable presumption of cartel harm caused by cartel agreements between suppliers would constitute 10% of the value of the paid public contract. Another proposal concerns obligation for the central purchasing agency to file damage claims if a decision of the Competition Council or a ruling by a court recognises that the winner of a tender concluded a cartel. It is hoped that these amendments would encourage the increase of damage actions and quicker compensatory effect, as well as deter companies from competition law infringements in the future.

The conference also focused on certain aspects of assessment of impact that draft legal acts might have on competition. When presenting the OECD’s experience on reducing restrictions of competition in public regulation, Mr Capobianco, Acting Head of Competition Division at the OECD, highlighted that before undertaking regulatory changes, legislators should responsibly assess how the envisaged legal regulation will affect the market and consumers, what are other alternatives, why such regulation has been chosen and whether it is proportionate to the objectives pursued. Mr Capobianco also stressed that the role of competition authorities in assessing the impact of the envisaged legal regulation on competition is key. Pavel Jacunskij, Head of the Competition Policy Group of the Lithuanian Competition Council, acknowledged that in Lithuania greater involvement of a competition authority in the process of competition impact assessment would be beneficial, however, it would require additional resources. In addition, he added that in order to have a comprehensive and systematic competition impact assessment in Lithuania, it is significant that legislative authorities consider it an essential part of a legislative initiative, which would encourage draft lawmakers to conduct appropriate assessment in all cases when competition might be distorted.

The event, which brought together representatives of competition authorities from Lithuania, Latvia, Estonia, Sweden, Norway and Finland, continued also on 20 May when competition law experts shared experience on such topics as anti-competitive behaviour by private and public entities, abuse of dominance, merger control, liability for competition infringements, etc. during the breakout sessions.