ENEFIT HAS INFRINGED THE LAW BY IMPLEMENTING A TRANSACTION WITHOUT THE CLEARANCE OF THE COMPETITION COUNCIL

The Competition Council has found that the electricity supply company Enefit infringed the Law on Competition when it entered a transaction with EGTO Energija without notifying the Authority and without obtaining its permission and took over the latter's retail contracts for the supply of electricity to its customers.

The investigation was initiated on suspicions that Enefit had carried out a concentration on September 18, 2023, which should have been reported to the Competition Council and for which a clearance should have been obtained. The notification of the already completed transaction was received on November 23, 2023 – after the institution, responding to publicly available information, requested the companies to provide explanations on whether the transfer of EGTO energija customer contracts to Enefit violated the requirements of the Law on Competition.

The investigation revealed that the companies were obliged to notify the planned transaction and obtain a clearance from the Competition Council or seek permission from the institution to carry out individual concentration actions. Each of the undertakings involved in the concentration had revenues in Lithuania exceeding EUR 2 million in 2022 and both together had revenues exceeding EUR 20 million, thus exceeding the total revenues of the parties to the transaction as provided for in the Law on Competition.

Considering that Enefit has admitted the infringement of the law, the Competition Council reduced the financial penalty calculated for the company by 15% and imposed a fine of EUR 86 510.

Jolanta Ivanauskienė, the Chairwoman of the Competition Council, noted that the ex-ante merger control mechanism provided for in the Law on Competition is designed to ensure that the merger does not have a negative impact on competition and the structure of the market, and does not cause any harm to consumers. Therefore, the implementation of a transaction without notification to and clearance by the Authority is considered a serious infringement.

"Even in cases where businesses consider it necessary to conclude a transaction as soon as possible, the merger control procedure cannot be ignored. Companies planning transactions always have the possibility to approach the Competition Council, explain the situation and request permission to carry out individual merger actions, which was not the case in the above-mentioned concentration," said J. Ivanauskienė.

The decision of the Competition Council can be appealed to the Regional Administrative Court within one month from the day it is delivered or published on the institution's website.