COMPETITION COUNCIL CLOSES INVESTIGATION ON POSSIBLY UNNOTIFIED MERGERS IMPLEMENTED BY UAB LUKOIL BALTIJA WITHIN THE MARKET OF FUEL RETAIL TRADE

On November 6, the Competition Council (the Council) sent a Statement of Objections to UAB Lukoil Baltija suspected of having infringed the Law on Competition. According to the preliminary evaluation of investigators, UAB Lukoil Baltija gained control over 16 petrol stations without having notified the Council and received its approval.

The Statement held that UAB Lukoil Baltija is suspected of having concluded an agreement which allowed the latter to exploit petrol stations owned by other company, and, thus, gain the control over these petrol stations. According to the investigators, such action is considered to be a merger. UAB Lukoil Baltija failed to notify the Council prior to the implementation of the aforementioned mergers and, thus, the mergers were not cleared.

The Council notes that mergers are controlled in order to observe structural changes within a market and prevent mergers or other merger related actions due to which companies could become dominant or strengthen their dominance in the relevant markets, or restrict competition in other ways. In order to ensure an effective merger control all merging parties or individuals who gain the control have to fulfil their obligation established in the Law on Competition, i.e. to notify the Council about the merger and have the merger cleared prior to its implementation. Implementation of a merger that was not cleared by the Council is a serious violation of the Law on Competition, even though it does not result in a restriction of competition.

Note

Mergers (Concentrations) are cases when two independent undertakings merge or when one undertaking gains control over another. As these changes may restrict effective competition in a relevant market, mergers involving firms that exceed turnover limits established in the Law on Competition must be cleared by the Council. The Council authorises only such mergers that will not have significant adverse effects on the conditions of competition.

The fact that the Council informed the suspected undertaking about the conclusions of an investigation does not mean that the infringement had already been established. Statement of Objections is a document issued by the authorised officers of the Council and sent to the stakeholders. This document is not announced publicly. Having received the Statement, the suspected undertakings are given an opportunity to familiarize with the material of an investigation and provide a written explanation. Explanations can also be provided orally during the meeting where both parties to the case are heard. The Council takes into consideration all the explanations before adopting the final decision.