CARTEL AGREEMENT IN THE ORTHOPAEDIC ARTICLES PRODUCTION AND TRADING MARKET – SANCTIONS UPON THE ASSOCIATION, INDIVIDUAL COMPANIES AND THE STATE PATIENT FUND

Having assessed the findings of the inquiry concerning the compliance of actions of undertakings engaged in the production and trading in orthopaedic technical means and articles, the association of such undertakings and the State Patient Fund under the Ministry of Health, the Competition Council passed its resolution.

The inquiry carried out by the Competition Council led to the conclusion that in the period from 2006 to 2010 members of the Association of Providers of Orthopaedic and Rehabilitation Services and the Association of Orthopaedic and Medical Industry Undertakings had concluded agreements concerning prices of orthopaedic technical articles, quantities of production and were sharing the funds allocated by the Compulsory Health Insurance Fund (hereinafter – CHIF) for the compensation of orthopaedic means.

 These agreements caused distortion and restriction of competition in the market of orthopaedic means compensated from the budget of the CHIF for the insured. The agreements concerned inflicted damage upon the State budget, as the participants thereof had been using non-competitive prices, which further led to an inefficient use of the budget funds, and the State Patient Fund (hereinafter – SPF) operating limited resources could provide services to much fewer patients. The agreements also incurred direct damage to patients, as the companies supplying orthopaedic technical means acting in concert did not compete which caused higher prices and poorer quality of the articles.

The investigation was started in response to the information from a participant of the market concerned. It should be noted that according to the Law on Competition an undertaking that had notified an infringement may benefit from the leniency provision and be exempted from sanctioning. In the case concerned the company was recognised as not having infringed the requirements of competition law, as it had expressly dissociated itself from the prohibited agreement.

Having assessed the data obtained in the course of the inquiry the Competition Council concluded that by entering into the agreements concerned the undertakings did infringe Article 5 of the Law on Competition.  Also having considered that the agreements entered into by the undertakings could affect trade between Member States the Competition Council also concluded an infringement of Article 101 of the Treaty on the Functioning of the European Union.

The undertakings indicated to the Competition Council that they had concluded the agreements as obliged by the relevant legal acts and the SPF. The Competition Council hereby notes that although the procedure for the compensation of orthopaedic means is subjected to special legal regulation, such regulation does not relieve the undertakings from the liability as they had not been under any obligation to agree concerning the prices of the goods, production quantities, or the funds received from the budget.  The SPF also confirmed it had never required the undertakings to submit any concerted offers. Therefore, the undertakings were recognised responsible for the established restricting agreements.

The Competition Council also arrived at the conclusion that having provided the preconditions for such prohibited agreements and organising the compensation for such orthopaedic means the SPF had selected inappropriate measures and thus had failed to ensure fair competition in the market and therefore infringed the requirements of Article 4(1) of the Law on Competition.

The Competition Council obliged the undertakings concerned and the SPF to terminate the actions infringing competition law and proposed to the Ministry of Health to take all the measures to ensure that the procedure for the compensation of orthopaedic means guarantee competition in the market concerned.

For the infringement of Article 5 of the Law on Competition and Article 101 of the Treaty on the Functioning of the European Union the undertakings were subjected to the following fines:

Association of Providers of Orthopaedic and Rehabilitation Services – LTL 1,000;

UAB Actualis – LTL 900,

UAB Idemus – LTL 248,000;

UAB Ortobatas – LTL 56,600;

UAB Ortopagalba – LTL 53,400;

UAB Ortopedijos centras – LTL 226,800;

UAB Ortopedijos klinika – LTL 193,500;

UAB Ortopedijos projektai – LTL 166,900;

AB Ortopedijos technika – LTL 1,644,500;

A. Astrauskas‘ firm Pirmas žingsnis – LTL 341,700;

SE Vilnius University Child Hospital – LTL 5,300;

SE Vilties žiedas – LTL 11,800.

In relation to imposing the fines for the established infringement the Competition Council considered the nature and duration of the infringement, and took into account the individual circumstances related to each undertaking concerned.