COURT UPHELD COMPETITION COUNCIL’S DECISION TO FINE AB “ORLEN LIETUVA“ FOR THE ABUSE OF ITS DOMINANT POSITION

On 21 January 2013, the Supreme Administrative Court of Lithuania (the Supreme Court) issued a non-appealable ruling stating that the Competition Council (CC) has legally imposed a fine of nearly 2.3 million EUR upon AB “Orlen Lietuva“(Company). The Company was accused of abusing its dominant position with the aim to restrict the import of fuels to the territory of Lithuania.

Already in 2005, the Competition Council fined the Company for the abuse of its dominant position, however, the Supreme Court overturned this decision and obliged the CC to carry out a further investigation. After the detailed investigation, the CC found that AB “Orlen Lietuva“ abused its dominant position in the market of fuel (petrol and diesel) sales in Lithuania. By applying an appropriate pricing policy and obligations to purchase from AB “Orlen Lietuva” a fixed amount of fuel, the Company sought „to tie“ its buyers thus restrict the import of petrol and diesel into the territory of Lithuania. The fuel market of Lithuania was practically closed for other producers, therefore competition was limited significantly. This actually resulted in the loss of possibility for consumers to take advantage of the benefits of competition.

Having examined the case, the Supreme Court acknowledged that the CC arguments qualifying the infringement of Article 7 of the Law on Competition and Article 102 TFEU were well-founded. The Supreme Court also affirmed that the CC had adequately evaluated the infringement as a severe one when deciding on the amount of a fine as well as the fact that the Company committed the infringement repeatedly. The Court decreased the fine imposed by the CC by 5 percent, from 2 383 862 EUR to 2 261 133 EUR, since, according to the Supreme Court, the CC failed to prove one of the elements of the infringement regarding price fixing for diesel sold only for ships as the CC did not evaluate the legal regulation in force properly.

After the investigation performed by the CC the Company was obliged to stop anti-competitive practises. To the knowledge of the CC, the Company has already fulfilled this obligation.

Notice

Article 7 of the Law on Competition and Article 102 TFEU prohibit any abuse of dominant position within a relevant market. Companies are forbidden to perform actions that restrict or may restrict competition including application of dissimilar conditions to equivalent transactions thus creating unequal conditions of competition.

Communication Division