COURT UPHOLDS THE FINE IMPOSED BY THE KT FOR IMPLEMENTING UNAUTHORISED MERGER IN THE PHARMACY SECTOR

On 25 April 2013, the Supreme Administrative Court of Lithuania (SACL) upheld the 29 March 2012 Competition Council‘s (Konkurencijos taryba, KT) decision to impose a fine of LTL 110,000 (approx. EUR 31,858) on Corporation of European Pharmaceutical Distributors N.V. (CEPD) for implementing a merger without the KT‘s authorisation.

The SACL confirmed the KT‘s decision, according to which CEPD had infringed the requirements of the Law on Competition since the undertaking concerned had failed to notify the KT about its intention to purchase up to 49.99 per cent of UAB Nacionalinė farmacijos grupė shares in due time as established by the Law on Competition. The SACL supported the KT‘s statement that CEPD‘s infringement of the Law on Competition was serious and admitted that the KT had correctly calculated the fine imposed on the undertaking. The Court also noted that deterrence was one of the goals of the fines imposed for the infringements of the Law on Competition, and, therefore, the imposition of very small fines or the exemption from them would not achieve this particular goal.

Notice

(1) 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 KT. The KT authorises only such mergers that will not have significant adverse effects on the conditions of competition.

(2) Article 36 of the Law on Competition stipulates that a failure to notify the KT about the implementation of a merger will result in a fine up to 10 per cent of combined aggregate income of the merging parties received in the business year preceding the merger.

Communication Division