THE COMPETITION COUNCIL DID NOT CHANGE ITS OPINION – ACTIONS OF VILNIAUS ENERGIJA DID INFRINGE THE LAW ON COMPETITION

Having assessed the findings and conclusions of the additional investigation conducted having regard to the Ruling of the Supreme Administrative Court of Lithuania (SACL), the Competition Council repeatedly confirmed that by imposing the unfair prices in the communication tunnel lease market in the city of Vilnius UAB Vilniaus energija did infringe Article 9 of the Law on Competition and fined the company LTL 178,000.

Back in September 2007, the Competition Council acknowledged that UAB Vilniaus energija in its agreements with lessees of communication tunnels was imposing lease rates disproportionate to the cross-section of the communication facilities in the tunnels and the areas occupied by the lessees, thus the prices for the lease of communication tunnels were unfair. The Resolution passed by the Competition Council was subjected to legal disputes that were eventually concluded by the Ruling of the SACL in March 2009. The Court noted that the Competition Council had failed to investigate all circumstances or produce the motives relevant to the conclusion on the unfair character of the disputed prices, and therefore, to an extent possible, to eliminate these shortcomings, the Competition Council was obligated to conduct an additional investigation.

Having regard to the Ruling of the Court in the course of its additional investigation the Competition Council analysed the prices for the lease of communication tunnels. The Competition Council established that by having disproportionally distributed the lease fees UAB Vilniaus energija subjected individual groups of lessees to unfair prices, i.e. for the lease of the same space of the tunnel some lessees were charged a tenfold price than others. Thus, by paying for the lease of communication tunnels such undertakings would pay not only for the tunnel areas occupied thereby, but also cover the communication costs of UAB Vilniaus energija that the company actually had to cover by itself in proportion to the share of communication facilities operated thereby. This concludes that UAB Vilniaus energija had been applying “exploitative“ communication tunnels lease prices. Such unfair prices could be imposed upon leases only the latter being dependent upon UAB Vilniaus energija and had not other choice with the operator holding the monopoly position in the market for the provision of the relevant services.

The findings of the investigation conducted by the Competition Council and the motives submitted by the parties concerned did not affect the opinion of the Competition Council regarding the qualification of the infringement of the Law on Competition – the Competition Council concluded that UAB Vilniaus energija had been abusing its dominant position by imposing unfair lease prices upon individual groups of lessees – cold water, communication cables and radio lines.

UAB Vilniaus energija was obligated by the Competition Council to terminate the infringement where such was still continued. Considering that in this case the fulfilment of the obligation imposed by the Competition Council requires UAB Vilniaus energija to amend the terms of the contracts with other undertakings which the company is not in a position to do unilaterally, the obligation shall be treated by the Competition Council as the responsibility of UAB Vilniaus energija within 3 months to submit to lessees of communication tunnels drafts of new transitory collector and technical corridor lease contracts, or the amendments to the existing contracts. The prices for the lease of communication channels, and the procedure for the calculation thereof shall be in compliance with the requirements of Article 9 of the Law on Competition.