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STUDY REVEALS THAT LITHUANIAN BUSINESSES’ NEED FOR COMPETITION ADVOCACY REMAINS HIGH

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The study of the Lithuanian businesses’ understanding of the rights and obligations established in the Law on Competition has revealed that although many interviewed companies are aware of the main competition law principles, there is a lack of knowledge about the application of certain law provisions, liability for infringements and the possibility to avoid sanctions. Having evaluated the findings of the study conducted by Kaunas University of Technology, the Lithuanian competition authority Konkurencijos taryba sees the need for a more active awareness-raising among businesses.

The survey, which was initiated by Konkurencijos taryba and took place from May to November 2021, was designed to assess the businesses’ understanding of the prohibitions and liability determined by the Law on Competition, the competition authority and its activities, as well as to identify the areas where Konkurencijos taryba should strengthen its advocacy activities.

The study involved 302 mainly small and medium-sized firms from different business sectors and showed that the majority of respondents are aware of the main competition law provisions, especially those concerning anti-competitive agreements, for instance, companies are aware that coordinating actions with competitors in public procurement or the exchange of commercially sensitive information infringes competition rules. Many interviewees also know that infringements of the Law on Competition may result in fines of up to 10 per cent of the company’s total annual worldwide turnover, disqualification from public procurement and private damages actions.

However, 58 per cent of the interviewed companies are unaware of the personal liability for the director of the company involved in an anti-competitive conduct which includes the restriction of the right to occupy the managing position for a 3 to 5 year-term and a fine of up to EUR 14,481; half of the businesses surveyed are unaware of the leniency programme, while 87 per cent do not know about a financial reward of up to EUR 100,000 for persons that provide evidence about an alleged anti-competitive agreement to Konkurencijos taryba.

The results of the study showed that businesses have very limited knowledge and clarity about the actions related to resale price maintenance: almost every second interviewed company believes that it is allowed to fix a price at which retailers should resell its products, while 46.6 per cent of the companies are convinced that they are entitled to prevent retailers from selling their products online. There is also a lack of specific knowledge on the abuse of a dominant position, as well as when the intended concentration must be notified to Konkurencijos taryba.

Businesses are most likely to comply with the principles of fair competition since it is important for their reputation or because of large fines and damages claims, but almost half of the companies do not have any internal document which would define how a firm adheres to the principles of fair competition, the study shows.

90.8 per cent of the companies know that Konkurencijos taryba is responsible for implementing state competition policy in Lithuania, what functions it performs to ensure fair conditions of competition for all market participants, and that the authority does not regulate prices. When asked to assess the performance of Konkurencijos taryba, 76 per cent of respondents rated it as good or satisfactory.

Businesses indicated that a comprehensive and clear interpretation of the provisions of the Law on Competition, as well as training and seminars are the most preferred measures for improving the knowledge about the risks of competition law infringements and the ways to reduce them. In addition, firms said that greater publicity of the infringers and fines imposed on them has a significant preventative effect, as well as encourage businesses to review their own activities and make sure that they comply with competition rules.

Taking into account the findings of the study and recommendations of the scientists, Konkurencijos taryba is planning to increase awareness-raising of the target groups (companies, business associations): to disseminate, more actively, information on the compliance with competition principles through associations and other business organisations, as well as to prepare and publish information on matters which are less clear to businesses.