THE MUNICIPALITY OBLIGATED TO TERMINATE THE AGREEMENT ON CONTRACTING PUBLIC TERRITORIES MANAGEMENT WORKS

Having assessed the findings of the investigation initiated upon a request of the Government representative in Vilnius region, the Competition Council passed the Resolution concerning the decision adopted by the Trakai regional Municipality office. It was recognised that the Council of the Trakai regional Municipality, by its Decision No. S1-72 of 27 March 2008 and without holding a tender procedure having obligated UAB Trakų paslaugos to perform the public territories management works in Trakai and Lentvaris infringed the requirements of Article 4 of the Law on Competition. The Competition Council obligated the Trakai regional Municipality office within 3 months to repeal the specified clauses of the Decision and terminate the Agreement on public territories management works in Trakai and Lentvaris of 8 April 2008 concluded between the Administration of the Trakai regional Municipality and UAB Trakų paslaugos.

Article 4 of the Law on Competition prohibits public and local authorities from adopting legal acts or other decisions which grant privileges to or discriminate against any individual undertakings or their groups and which bring about or may bring about differences in the conditions of competition for competitors in the relevant market.

The Resolution passed by the Competition Council stipulates that Clauses 1 and 3 of the Decision by the Trakai regional Municipality and the agreement on the public territories management works signed on the basis thereof infringed the requirements of Article 4 of the Law on Competition in several aspects. First, UAB Trakų paslaugos was assigned to perform the public territories management works in Trakai and Lentvaris, without holding a tender or any other competitive procedure (whereby all undertakings operating in the relevant market would be provided equal possibilities to offer their services). The Decision of the Municipality created unequal competitive conditions in respect of a number of undertakings capable of and willing to offer the respective services. Granting privileges to one undertaking – UAB Trakų paslaugos – rendered discriminatory in respect of other undertakings since they were deprived of a possibility to compete by submitting their offers (possibly at lower rates) to the Council of the Municipality. The delegation of the duty to render the services in question to one single undertaking yielded unequal competition conditions in respect of other undertakings equally able to render the same services which was not necessary in order to comply with the requirements stipulated in other laws.