KAUNAS CITY MUNICIPALITY INFRINGED THE REQUIREMENTS OF THE LAW ON COMPETITION

Having discussed and examined the findings of the completed investigation, the Competition Council acknowledged that certain items of the regulations on waste management approved by the Council of the Kaunas Municipality and selected items of decision of 30 May 2002 of the Council, as well as the refusal by the Kaunas Municipality to conclude an agreement with UAB Dzūtra concerning the management of mixed household waste contradicted the requirements of Art.4 of the Law on Competition. The Kaunas municipality was obligated, within three months, to amend the provisions of its decisions in order to bring them into line with Article 4 of the Law on Competition.

Art. 4 of the Law on Competition obligates public and local authorities to ensure the freedom of fair competition. Public and local authorities are prohibited from adopting legal acts or other decisions which grant privileges to or discriminate against any individual undertakings or their groups and which bring about or may bring about differences in the conditions of competition for competitors in the relevant market. The conducted investigation concluded that by contractually granting exclusive rights to UAB Kauno švara to provide the household waste management services in Kaunas and refusing to conclude the equivalent agreements with other undertakings Kaunas municipality created differences for the operation of undertakings in the market for the household waste management. Such actions of the Kaunas municipality were appealed to the Competition Council by UAB Dzūtra - a company rendering the waste management services operating in the territories of Alytus city and region, Kaunas region and other municipalities, and which was prevented from expanding its operations in Kaunas city.

Having examined the legal acts governing the provision of the waste management services and the authority and powers of municipalities the Competition Council concluded that actions of the municipality privileged one undertaking, - UAB Kauno švara to operate in the relevant market. Such actions of the Kaunas municipality had not been determined by the requirements of the Law on Waste Management and were discriminative in respect of other undertakings. Since the municipality does not have any reasons to grant exclusive rights to a single undertaking, it should, upon proper assessment of the peculiarities of the market, consider a possibility to conclude the relevant agreements on waste management services with other undertakings.