SUPREME ADMINISTRATIVE COURT OF LITHUANIA: PANEVĖŽYS CITY MUNICIPALITY BREACHED COMPETITION LAW

The Supreme Administrative Court of Lithuania (Court) rejected the appeals by Panevėžys City Municipality and the company Panevėžys specialus autotransportas and upheld the Lithuanian Competition Council’s decision, according to which the Municipality was found to have breached the Law on Competition by authorising its company to provide municipal waste management services without a competitive procedure.

The Court found that in 2014 the Municipality concluded an agreement with its company Panevėžys specialus autotransportas and by granting monopoly rights to it eliminated competition in the market of municipal waste management in Panevėžys region. Such actions of the Municipality did not ensure equal competition among market players and prevented them from competing for the provision of the aforementioned services on equal terms.

Although the applicants stated that the Public Procurement Office gave permission to conclude an in-house contract between the company and the Municipality, the Court rejected the claim and said that the permission did not eliminate the duty of the Municipality to ensure fair competition in the market, and evaluate whether the contract signed with the municipal company would not breach the Law on Competition.

After the final and binding decision of the Court Panevėžys City Municipality will have to comply with the Council’s obligation and terminate the contract with Panevėžys specialus autotransportas.

The Council reminds that from 2017 fines might be imposed on public administrative bodies for competition law breaches.