PROCEDURE FOR SETTING FINES FOR COMPETITION LAW INFRINGEMENTS HAS BEEN IMPROVED

Today the Lithuanian Government adopted a resolution approving the description of the procedure for setting fines for infringements of the Law on Competition. A more detailed regulation of the methodology for setting fines, which will apply from 1 May 2023, will result in fewer preconditions for disputes in courts concerning the amount of fines imposed on infringers and will provide more clarity on the application of competition law provisions when setting sanctions. In addition, there will be more incentives for undertakings to cooperate with the Lithuanian competition authority Konkurencijos taryba by acknowledging an infringement.

The description, to which the experts of Konkurencijos taryba contributed as well, establishes that some mitigating circumstances, such as the submission of an application of an acknowledgement of an infringement by a business company or the recognition of the investigation findings of Konkurencijos taryba, could lead to a reduction of a fine, even if it reaches a maximum threshold of up to 10 per cent of the total annual worldwide turnover.

"Under the current legal framework, an undertaking that has submitted an application acknowledging an infringement or accepted the investigation findings, can be fined a maximum of 10 per cent of the total annual worldwide turnover. We saw the need to amend the methodology for calculating fines to encourage business representatives to cooperate with Konkurencijos taryba and to acknowledge an infringement, as a result of which sanctions would be reduced", said Šarūnas Keserauskas, Chairman of Konkurencijos taryba, emphasising that the authority can conduct investigations faster and more efficiently when alleged infringers cooperate with Konkurencijos taryba.

The description also stipulates that the duration of an infringement will be calculated in months, not in half-years. Such regulation will enable Konkurencijos taryba to individualise the amount of a fine better.

Having taken into account the rules applied by the European Commission, the description contains the adjusted provisions relating to the reduction of a fine for a participant of an anti-competitive agreement: after the description has entered into force, the fine might be reduced by a maximum of 50 per cent, rather than by 75 per cent, as up to now.  

"We hope that after the elimination of the provision regarding a 75 per cent reduction, full immunity will become more attractive to participants of an anti-competitive agreement. The latter instrument not only enables Konkurencijos taryba to obtain additional evidence from the infringers, but it also helps to disclose secret anti-competitive agreements, which the authority was not aware of prior to the company's application. The more business representatives will take advantage of the opportunity to be fully exempted from a fine, the more anti-competitive agreements will be detected and the harm to consumers will be stopped", said the Chairman of Konkurencijos taryba.

Besides, considering the amendments to the Law on Competition, the description regulates the calculation of a fine in case of joint and several liability, and describes the procedure for setting a fine for legal and economic successors.

With the entry into force of more detailed rules on the setting of the amount of fines, and the Lithuanian system of setting fines being more in line with the European Commission’s practice, it will be possible to refer to the case-law of the Court of Justice of the European Union to a greater extent. In the long term, the aforementioned changes are expected to decrease the number of disputes concerning the calculation of fines imposed by Konkurencijos taryba and to save the resources of businesses, Konkurencijos taryba and courts.