LITHUANIAN COMPETITION LAW AMENDMENTS: FROM FINING POWERS TO GUARANTEES OF INDEPENDENCE

On November 1 amendments to the Law on Competition of the Republic of Lithuania enter into force. These amendments are in line with the ECN+ Directive intended to empower the competition authorities of Member States to be more effective enforcers and ensure the proper functioning of the internal market. More specifically, the Directive aims to ensure that national competition authorities have the necessary guarantees of independence, resources, as well as enforcement and fining powers.

The updated Law on Competition clarifies and sets out the rules on immunity from fines or their reduction under which undertakings providing substantial evidence on an anti-competitive agreement to the Lithuanian Konkurencijos taryba may be exempted from fine or offered a reduction in fine. Besides, competition law amendments envisage that undertakings will not bear civil liability for the submission of leniency applications, therefore, potential applicants will be protected from claims against the disclosure of commercial or professional secrets or other confidential information to the competition authority.

Konkurencijos taryba will also have the powers to impose stricter fines on undertakings for continuous or repeated infringements committed in Lithuania or other EU jurisdictions.

Other equally significant changes concern the codification of parental liability for undertakings forming a single economic unit and succession so that companies could not escape fines through corporate re-structuring. Besides, to ensure that sanctions imposed on undertakings for breaches of the EU antitrust rules are deterrent, from 1 November the Law explicitly states that fines will be calculated taking into account the undertaking‘s total worldwide turnover in the preceding business year.

The Law amendments also ensure more guarantees of independence for Konkurencijos taryba as national competition enforcement authority, in particular that it acts independently when enforcing antitrust rules and works in a fully impartial manner, without taking instructions from politicians or other entities, including state institutions and public or private entities.

The Law requires the authority to have sufficient human, financial, technical and technological resources to apply the EU antitrust rules more effectively, for instance, conduct simultaneous inspections, use technologically advanced equipment helping to detect an alleged infringement, as well as have qualified staff able to carry out legal and economic assessment when investigating the infringements.

Furthermore, staff responsible for the adoption of the decisions in Konkurencijos taryba, namely the Chairman and Council Members, as well as the administrative staff, after leaving state civil service will have a duty to abstain for seven years (this is how long generally appeal processes take place) from representing the other party in matters related to infringements or merger control procedures that they were working on or took part in the adoption of the decisions.

From 1 November Konkurencijos taryba will not be investigating the actions of unfair competition (for example, unfair use of reference marks or commercial secrets of other undertakings). This function has been removed since previously Konkurencijos taryba had the right to use the investigative powers only if the alleged unfair acts of companies infringed the interests of the majority of other undertakings or consumers, which was very seldom the case, therefore, the aforementioned function has been left to private actions in courts only.  

The Law also includes new provisions relating to the collaboration with other EU authorities when enforcing the payment of fines against infringing companies that do not have property in Lithuania or, for example, when the need arises to hand over the documents when it is not possible to do so in Lithuania. Konkurencijos taryba will also be able to provide the same type of assistance to other EU competition authorities should the need arise.