FINAL RULING DELIVERED IN RESPECT OF THE PROHIBITED AGREEMENT OF THE VILNIUS TAXI COMPANIES

The final and unappealable ruling of the Supreme Administrative Court of Lithuania confirming that the Resolution of 3 February 2005 of the Competition Council concerning the prohibited agreement concluded by the taxi service companies in the city of Vilnius has been passed lawfully is an important conclusion in preventing similar agreements concerning the prices or other restrictive actions in the market.

Upon the conducting of an investigation in February 2005, the Competition Council passed the Resolution whereby it concluded that the Association of Taxi Service Providers and some taxi companies in Vilnius committed actions constituting an infringement of the requirements of Art. 5 of the Law on Competition, – by having concerted their actions in early October 2004 the companies increased the taxi fares. Actions whereby by common agreement the companies established the taxi fares and a boarding fee contradict the requirements of Art. 5 of the Law on Competition. For the prohibited activities of Art. 5 of the Law on Competition, – agreements which have as their object the restriction of competition or which may restrict competition, including the agreements to directly or indirectly fix prices of certain goods or other conditions of sale or purchase, – ten taxi companies operating in Vilnius were recognised to have violated the Law on Competition and were subjected to pecuniary fines. The company UAB Martono taksi was recognised as the initiator of the prohibited agreement and therefore subjected to a largest fine.

In disagreement with the Resolution of the Competition Council taxis companies members of the Association of the Tax Service Providers appealed the Resolution to court. The final judgement passed in the case by the Supreme Administrative Court of Lithuania concluded that the companies providing taxi service in the city of Vilnius had concluded an agreement concerning the taxi fares distorting competition and operating to the detriment of the consumers. Having regard to the rulings passed by the courts of lower instance, the market share held by companies parties to the prohibited agreement and the gross annual income thereof the Supreme Administrative Court of Lithuania introduced certain adjustments in the amounts of fines imposed upon the infringing companies by the Competition Council.

The Competition Council ensures the constant monitoring of the markets that are dynamic in their development and wherein the situation, in the view of the qualitative and quantitative changes, is constantly developing, aiming at detecting on time the indications of prohibited agreements. The fundamental purpose of fair competition is to promote the undertakings to seek the provision of higher quality services and improvement of customer service by competing in prices and improving the quality of services. Fixing of prices for goods and services involves the concerting of actions which are prohibited by the Law on Competition as inflicting significant damage to all consumers. As harmful to the consumers the illegal actions will be subject to investigation and upon proving the prohibited agreement the participants of such agreements will be subject to severe statutory sanctions.