PANEVĖŽYS CITY MUNICIPALITY RESTRICTED COMPETITION BY ENTRUSTING WASTE MANAGEMENT TO ITS OWN COMPANY

The Competition Council found that Panevėžys City Municipality had violated the Law on Competition by entering into in-house transactions with a company it controlled.

The investigation revealed that, before entrusting waste management services to its company Panevėžio specialus autotransportas, the municipality did not conduct a competitive procedure and did not ascertain whether there were companies on the market capable of providing the aforementioned services. The analysis provided by the municipality also failed to substantiate that in-house transactions were the only way to obtain adequate municipal waste management services. The ability of other suppliers to ensure the quality, continuity, and availability of services was not assessed, and neither was the impact of the decision on fair competition

In view of this, it was found that the municipality had given preference to the company it controlled and restricted the opportunities for potential competitors to operate in the market, thereby violating the Law on Competition.

As the legal regulation changed during the period of the violation, the Competition Council decided not to impose a fine. The municipality was obliged to revoke the decisions to conclude in-house transactions adopted in 2025 within six months of the publication of the institution's decision, and to select a service provider (providers) and conclude new service provision contracts in accordance with the procedure established by the law and the explanations formulated by the Constitutional Court.

The decision may be appealed to the Regional Administrative Court within one month of its delivery or publication on the Competition Council's website.

We recall that in October 2024, after the Constitutional Court ruled that the legal regulation governing in-house transactions violated the Constitution, the Competition Council resumed its investigation into in-house transactions concluded by the Panevėžys City Municipality in 2022. The municipality terminated the latter in 2025, but immediately concluded new ones and commissioned its company to manage waste for at least another 5 years.

The Law on Competition imposes an obligation on public administration entities to ensure fair competition in the performance of their tasks related to the regulation of economic activity. Public administration entities are prohibited from adopting legal acts or other decisions that grant privileges to or discriminate against individual economic entities or groups thereof, and that result or may result in differences in competitive conditions for economic entities competing in the relevant market, except in cases where different competitive conditions cannot be avoided in implementing the requirements of the laws of the Republic of Lithuania.