PALANGA MUNICIPALITY OBLIGATED TO AMEND THE ANTICOMPETITIVE REGULATIONS

Having thoroughly examined the findings of the investigation and considered all circumstances and factors related, the Competition Council passed the decision concerning the compliance with the requirements of Article 4 of the Law on Competition of the Regulations approved by Resolution No. 101 of 28-04-2004 of the Municipality of Palanga „On the local charge for trading permit and (or) the issue of the authorisation to provide services in the public sites assigned by the Municipality of Palanga“. The decision of the CC obligated the Municipality of Palanga to amend the Regulations of the Resolution in order to bring them into compliance with the requirements of Article 4 of the Law on Competition.

The investigation was initiated upon the receipt of the claim of the representative of the Government in Klaipeda County requesting an investigation in order to clarify whether the allocation of the trading sites (service provision sites) without any tender procedure to certain undertakings possibly created unequal competitive terms in respect of individual undertakings. In the opinion of the claimant the undertakings seeking to engage in trading activity (or rendering the services) should be ensured equal conditions to compete for a possibility to acquire the right to engage in this kind of activity in all public places allocated by the Council of the Municipality (except in locations allocated on the plots managed on the basis of the ownership, lease or the right of use, or the locations wherein the number of traders (service providers) is limited).

Having examined the information and explanations provided by the Palanga Municipality also the requirements of the legal acts relevant for the present investigation the Competition Council concluded that the actions of the Palanga Municipality when allocating certain  public sites without a tender procedure are to be assessed as an infringement of Article 4 of the Law on Competition. The Article provides for the duty of public and local authorities to ensure the freedom of fair competition. The Regulations approved by item 4 of Resolution No. 101 of 28-04-2004 of Palanga Municipality stipulates that the amount of the charge for the trading permit and (or) the authorisation to provide the services in public places shall be formed following the tender procedure. Having, however, established the amount of the fee in respect of certain undertakings by way of tender, while without any tender in respect of others (e.g., J.Pastarnokienė and the PI Palangos pliažo tinklinio bazė) – the local authority created certain privileged position to the latter and ensured more favourable terms for them to pursue their business and seek profit. As a result, dissimilar terms were created for undertakings operating in the relevant market. Despite the fact that the Resolution of Palanga Municipality has been amended every year, the procedure and the time limits for the allocation of certain public places for trading through no tender procedure for a period of three years remained unchanged.