FILM DISTRIBUTORS ACKNOWLEDGED TO HAVE ILLEGITIMATELY FIXED RESALE PRICES

By its Decision of 23 June 2011, the Supreme Administrative Court of Lithuania (SACL) confirmed that the Competition Council had legitimately imposed the fines upon UAB Forum Cinemas Home Entertainment, UAB Palink, UAB GPP, UAB Media Incognito and UAB Elektromarktas for entering into prohibited agreements to fix resale prices of films sold in DVD and VHS formats. The agreements concluded by UAB Forum Cinemas Home Entertainment with other mentioned companies to fix minimum and recommended resale prices of film records were regarded as infringing the requirements of Article 5 of the Law on Competition. In respect of the companies that lodged the appeals against the Decision of the Competition Council, the Court have slightly decreased the fines, and referred the issue on the legitimacy of the fines imposed upon UAB Interatlas and UAB Bomba to the Court of First Instance for consideration.

The Competition Council acknowledges the importance of the Court’s Decision not only in respect of the Competition Council’s practice, but also to the undertakings in assessing their actions, primarily in supply and distribution process, regarding their compliance with the requirements of competition law.

The Decision of the SACL clearly shows that suppliers and distributors are prohibited to directly or indirectly agree on minimum or recommended resale prices, including retail prices. The damage caused by such agreements to competition and consumers is obvious, therefore it is necessary to ensure that the decisions on resale prices by distributors are made independently.