THE GUIDELINES OF THE COMPETITION COUNCIL PROVIDE RECOMMENDATIONS FOR E-COMMERCE BUSINESSES

In order to contribute to a better understanding of the competition law requirements for businesses in the digital space, the Competition Council has prepared Guidelines on e-commerce, which provide the most relevant information on the prohibition of anti-competitive agreements and recommendations for the e-commerce sector.

In 2023, the Competition Council, together with its Latvian counterparts, carried out a market monitoring of online marketplaces and presented its findings, and this year it has made digital markets one of the priority areas of the Authority. The Guidelines are expected to help suppliers of goods and services, distributors and online marketplaces to better understand which of their actions may pose a risk of restricting competition and to avoid potential infringements. 

The document provides detailed explanations and practical examples regarding the application of competition rules to pricing, online trade requirements, online advertising, and the operation of online marketplaces, including the hybrid ones.

It is also noted that distributors are required to set their own prices for goods and services sold online without coordinating them with competitors or suppliers. Suppliers, for their part, must not prevent distributors or their customers from the effective use of the internet to sell goods or services.  The Guidelines also address which suppliers' requirements for distributors' online advertising are lawful and which could infringe competition law, present additional requirements of the competition rules for online marketplaces and explain when and how effects of certain agreements on competition should be assessed. 

In recent years, the Competition Council has observed that as more companies engage in e-commerce, it has become important to remind businesses of the prohibition of resale price fixing. The institution has issued warning letters and calls for companies to review their business practices. Moreover, last year, the Authority identified an illegal agreement between a cosmetics manufacturer and its distributors, and this year sent a letter about a possible violation of this nature to companies selling food supplements and cosmetics.

"With this document, we would like to draw the attention of businesses once again to the fact that it is not only competitors who are prohibited from price-fixing, but also suppliers and distributors, whether they are selling online or in brick and mortar shops. We hope that the explanations, recommendations and practical examples provided by the Authority's experts in the Guidelines will help businesses operating in the digital space to understand what kind of actions of suppliers or distributors may restrict competition and to avoid the risk of violating the Law on Competition," said Irma Urmonaitė, Deputy Chairwoman of the Competition Council.

The Guidelines are not mandatory legislation, addressing only some of the examples of conduct prohibited by competition law and providing the most relevant guidance.

Guidelines on e-commerce in Lithuanian.