LTL 1.6 m FINE FOR THREE COMPANIES FOR A PROHIBITED AGREEMENT

1Having assessed the findings of the investigation concerning the compliance with requirements of Article 5 of the Law on Competition of the Republic of Lithuania of certain actions of the companies providing vehicle sale and lease services, the Competition Council acknowledged that by concerting their actions and prices in relation to quoting for public procurement tenders AB Autoūkis, UAB Autodina and UAB Moller Auto had committed an infringement of the Law on Competition.

For this infringement of Article 5 of the Law on Competition the companies were subjected to the following fines: AB Autoūkis – LTL 210,800, UAB Autodina – LTL 117,800 and UAB Moller Auto – LTL 1,266,500. The infringing companies were also obligated to immediately cease the infringement if it was still in progress.

According to Article 5(1) of the Law on Competition all agreements which have as their object the restriction of competition or which may restrict competition shall be prohibited and shall be void from the moment of conclusion thereof, including an non-compete agreement between competitors – cartel – is the most damaging form of anticompetitive actions, whether it is an agreement on production volumes, prices, discounts, credit terms, customers, territories, or other. Prohibited agreements are also capable of causing damage to the entire national economy as they eliminate the agreeing parties' initiative to efficiently use their limited resources.

The investigation was initiated ex officio by the Competition Council in October 2009 in response to the information communicated by the Police Department under the Ministry of the Interior in view of a suspicion on the cooperation between competing companies in preparation of commercial tenders for the public procurement of vehicle operation lease services and vehicles in 2008. The investigation provided evidence that the otherwise competing companies in submitting quotes for public procurement tender had come into prohibited agreements (concerted actions) concerning the participation in public tenders for the procurement of the vehicle operational lease services in certain regions (Joniškis, Pasvalys, Raseiniai and Rokiškis), and the public tender for the procurement of vehicle called by UAB Rokiškio vandenys. 

As the investigation established during the period concerned the same employees of different companies – L. Z. on behalf of AB Autoūkis, S. G. – on behalf of UAB Autodina, and V. Č. on behalf of UAB Moller Auto were drawing up commercial offers for the public tenders in which they participated. The persons concerned were discussing the process of the drawing by electronic communications, would exchange the commercial offers, an employee of one of the undertakings was enveloping the offers of all suppliers to be dispatched to the contracting authority; the companies were also requesting one from another supporting offers and performed other actions. 

On the basis of the material collected during the investigation the Competition Council arrived at the conclusion that the companies, while being competitors had concluded a prohibited agreement since they were concerting their actions to submit commercial offers including tender prices by in advance designating the winner of the tender. Actually, AB Autoūkis, in the context of the public procurement, did not compete with UAB Autodina, and UAB Moller Auto thus enabling AB Autoūkis to become the winner in all cases of the public procurement of the vehicle operating lease services. Furthermore, in connection to the initiator of a supporting offer being V. Č., an employee of UAB Moller Auto (in relation to the public procurement of a vehicle) – the tender was awarded to UAB Moller Auto.

When fixing the amount of the penalties upon AB Autoūkis, UAB Autodina and UAB Moller Auto for the infringement of Article 5 of the Law on Competition the Competition Council took into account the specifically detrimental character of the infringement committed – the cartel agreement. Since the undertakings were participating in a different number of public procurement tenders in relation to which they concerted their offers (UAB Autodina – in three, UAB Moller Auto – five, and AB Autoūkis – six), the Competition Council concluded that the anticompetitive effect of their actions was also different, accordingly they were subject to different amount of pecuniary sanctions. Also, the competition authority considered the circumstances mitigating the liability of UAB Autodina and AB Autoūkis, since the companies partly acknowledged the principal circumstances established by the Competition Council in the course of the investigation. 

It should be noted that in relation to imposing the fines the Competition Council was guided by the principles of objectivity and proportionality, and additionally considered the peculiarity of the economic sector concerned, and the data and explanations submitted by the undertakings concerning their difficult financial position due to the significant drop in vehicle sale, and thus reduced the final amounts of the fines by 20 percent.