COMPETITION COUNCIL FINES LUKOIL 11 817 700 LTL FOR IMPLEMENTING NON-NOTIFIED MERGERS

On 12 May, the Competition Council (the KT) fined UAB Lukoil Baltija 11 817 700 LTL ( ̴ 3 422 642 EUR) for implementing non-notified mergers and obligated the company to eliminate the breach.

Having concluded joint venture agreement with UAB Baltic Petroleum, in December 2003 UAB Lukoil Baltija took over the control of 15 petrol stations. In June 2008, the company acquired control of one more petrol station. Hence, UAB Lukoil Baltija implemented non-notified mergers, acquired control of 16 petrol stations and, thus, infringed the Law on Competition.

KT also obligated the company to eliminate the breach, i.e. either to undo the mergers or to seek merger clearance from the KT.

“Though business community often think of merger notifications as of mere formalities, it is not the case. Mergers between companies could impact various  conditions on the markets, restrict competition and, thus, cause harm to consumers. For instance, the prices for services may increase as a result of a decrease in the number of market participants and weakened competition in a relevant territory. Recently, companies tend to draw on social responsibility and other “goodwill wishes”, such as ensuring employment, to justify their anti-competitive conduct. The KT welcomes companies’ intentions to be socially  responsible, however, social responsibility does not exempt them from duty to comply with competition law. The gravity of the infringement, its duration and the income of the company have been the major factors that determined the amount of the fine” – says Šarūnas Keserauskas, the Chairman of the KT.