THE COMPETITION COUNCIL OBLIGATED THE VILNIUS MUNICIPALITY TO REPEAL THE DECISION AND TERMINATE OR AMEND THE SERVICE PROVISION AGREEMENT

Having examined and assessed the findings of the completed investigation the Competition Council acknowledged that Resolution No. 1-209 of 12 September 2007 of the Council of the Vilnius Municipality „On the obligation to UAB Vilniaus profilaktinės dezinfekcijos stotis (Vilnius preventive disinfection station) to render the mandatory services“ infringes Article 4 of the Law on Competition. The Council of the Vilnius Municipality was obligated within the term of three months to repeal the Resolution and terminate the agreement on compensated services concluded on the basis of the Resolution concerned between the Administration of Vilnius Municipality and Vilniaus profilaktinės dezinfekcijos stotis UAB, or to amend the provisions of the agreement bringing them into line with the provisions of the Law on Competition.

The findings of the investigation that was initiated on the basis of the information provided by the Public Procurement Office allowed the Competition Council to come to the conclusion that the Council of the Vilnius Municipality, having solely by its Resolution and without having conducted any public tender, or any other procedures ensuring competitive conditions, obligated Vilniaus profilaktinės dezinfekcijos stotis UAB to provide the mandatory disinfestation services infringed the requirements of the Law on Competition by granting privileges to a single company in relation to other undertakings.

In 2007, there were undertakings licensed to provide the mandatory services for the disinfection of environment (including disinfestation), of which 9 operated in Vilnius. Some of these undertkaings also operate their branches in several other towns in Lithuania. As a result of the investigation the Competition Council established that the Council of Vilnius Municipality, without having announced a tender ensuring a posssibility to choose from several best tenders, solely by its decision obligated Vilniaus profilaktinės dezinfekcijos stotis UAB to provide the mandatory disinfestation services. On the basis of its Resolution the Administration of the Municipality concluded the agreement concerning the procurement of the services in question for a period of two years, although earlier such agreements used to be signed for a one-year term. Such actions of the Council of the Municipality, where no tender has been announced and no other measures facilitating competition applied deprived the other undertakings of the right to compete when submitting their tenders for the provision of disinfestation services.

In the opinion of the Competition Council, the Council of Vilnius Municipality having decided to procure (or to obligate pro provide) the mandatory disinfestation services and, furthermore, at higher rates than offered by other undertakings, granted privileges to a single undertaking discriminating others operating in the relevant market. The Resolution of the Municipality created different competition conditions for the undertakings operating in the relevant market, while such actions of local authorities are prohibited by the Law on Competition.