REPUBLIC OF LITHUANIA

REPUBLIC OF LITHUANIA REPUBLIC OF LITHUANIA LAW ON COMPETITION Chapter 1 General Provisions Article

1. Objectives
2. This Law shall regulate the relations which arise from activities of economic entities, officials representing them, and bodies of State authority or government which restrict competition or compete unfairly in the commodity markets of the Republic of Lithuania, as shall also define the responsibility for these activities if they violate the interests of the consumers or the economy. This Law shall apply to the regulation of relations throughout the territory of the Republic of Lithuania which result from competition-restricting activities or unfair competition, with the exception of relations regulated by other laws. Article
3. Basic Definitions Definitions of concepts used in this Law: "Economic entities" - legal and natural persons engaged in commercial-economic activity, regardless of its character, the form of property or the type of enterprise; "Goods" - the result of activity, i.e. production and service meant for realization; "Market" - the aggregate of certain goods involved in purchase-sale processes on the territory and parts of the Republic whose qualities, use and price are compared in such a way that producers and consumers can substitute one for the other in the process of manufacturing and consumption; "Competition" - emulation during which economic entities, by acting independently in the market, restrict one another's abilities to attain a dominant position in that market, and promote the production and increase the effectiveness of goods necessary to consumers; "Dominant position" - the position of an economic entity in the market which allows for the possibility to unilaterally and decisively influence that market. The economic entity cannot be considered to have a dominant position if its market share of certain goods is no more than 40 per cent; "Market concentration" - the merger of two or more economic entities or the acquisition by one economic entity of the right to have either all or part of the total capital of another economic entity at its disposal, as well as the conclusion of contracts which have influence over the managing decisions made by one of the economic entities, due to which a dominant position in the market is attained and competition is restricted. Chapter 2 Activities which Restrict Competition Article
4. Prohibition of Abusing the Dominant Position
5. Activities of economic entities having a dominant position in the market which restrict or may restrict competition by infringing economic interests shall be prohibited.
6. Economic entities shall be prohibited from engaging in the following activities which restrict competition: 1) creating hindrances for competing economic entities to enter the market or to develop the activities of already existing ones; 2) abusing the dominant position by excluding competing economic entities from the market; 3) restricting production, decreasing the amount of sales and purchase of goods, or suspending trade with the intention to create a shortage in the market or to influence prices, and consequently harming the consumers; 4) anticipating discriminating economic conditions in contracts of an identical nature with different partners; and 5) establishing fixed selling prices to third persons in contracts with suppliers or purchasers. Article
7. Prohibition of Agreements (Coordinated Activities) between Economic Entities which Restrict or Impede Competition Agreements or coordinated activities between competing economic entities (or potential competitors) shall be prohibited if they restrict or impede competition. Considered as such shall be agreements and coordinated activities concerning: 1) prices (including those established by auctions or tenders), discounts, markups and other payments; 2) volume of production; 3) division of the market according to territorial principle, volume of sales and purchases, types of goods, groups of purchasers and sellers, or otherwise; 4) restriction of other economic entities from being ousted from or entering into the market (or part of it); and 5) refusal to conclude a contract with certain sellers or purchasers. Article
8. Exceptions to Prohibited Activities The activities enumerated in Articles 3 and 4 of this Law may be considered to be in agreement with the Law if it is proved that they result in: 1) steady reduction of consumer prices; or 2) improvement of the quality of goods. Article
9. Prohibition of Bodies of State Authority and Government from Restricting Competition Bodies of state authority and government shall be prohibited from adopting standard acts or carrying out activities which restrict the independence of economic entities or the conclusion of economic contracts, which impede the foundation, reorganization or restructuring of existing economic entities, or which grant privileges to or discriminate separate economic entities, or which otherwise restrict competition. Heads of bodies of state authority and government shall be prohibited from taking up commercial-economic activities, owning personal enterprises, or holding positions in managing bodies of economic entities. Chapter 3 Unfair Competition Article
10. Prohibition of Activities of Unfair Competition Economic entities shall be prohibited from carrying out the following activities of unfair competition: 1) the propagation of misleading, inaccurate or distorted information (including advertisements) which may cause another economic entity or its reputation to suffer; 2) the misleading of consumers through false information regarding the quality of goods, the characteristics of utilization, the place and manner of production, and the amount and price of sale; 3) the willful use of the name, product name, trademark, marking, or form of product packaging or appearance of another economic entity; and 4) the acquisition, use and publishing without consent of information concerning the industrial and commercial activities and the scientific-technical investigations and results of an economic entity. Chapter 4 Control of Activities which are Unfair or which Restrict Competition Article
11. The Institution of Price and Competition Control The functions of supervision of observance of this Law as well as the Law on Prices within the Republic of Lithuania shall be executed by the Institution of Price and Competition, the director of which shall be appointed by the Government. The Competition Council shall be formed to adopt decisions related to issues of prices and competition within the scope of this Law. The Competition Council shall consist of 7 members who shall be appointed by the Government for a term of 3 years. At least 4 of the members shall be appointed taking into account the recommendations of consumer, scientific, business and industrial organizations, and the others shall be assigned from the Institution of Price and Competition. The Competition Council shall adopt decisions related to the application of the Law by a 2/3 majority vote. The regulations of both the Competition Council and the Institution of Price and Competition shall be approved by the Government. With the aim of protecting the economy and consumer rights, the Institution of Price and Competition shall observe the situation in the market and fluctuations of market prices, shall accumulate information concerning possibilities for meeting consumer needs, shall periodically provide recommendations to the Government on the formation of price policies, and shall perform other functions established in its regulations. The Institution of Price and Competition shall have the right to obtain information from both economic entities and managing bodies as well as explanations - oral or written - which are necessary to carry out the functions established in this Law and in the regulations of the Institution. Article
12. Powers of the Institution of Price and Competition The Institution of Price and Competition, upon establishing that economic entities or managing bodies have violated this Law, shall compile material concerning the issue and present it to the Competition Council for the adoption of a decision. On the basis of the Competition Council's decision, the Institution of Price and Competition may seek the termination of illegal practices through negotiations with the economic entity, if they have resulted in minor negative changes (decrease in the efficiency of production and distribution of goods, restriction of free trade) and provided that circumstances do not object to negotiation. Upon reaching an agreement, its results and terms for the termination of illegal practices shall be concluded in writing. In other cases or if an agreement is not reached through negotiation, the Institution of Price and Competition has the right to: 1) obligate economic entities to terminate agreements and practices which violate this Law; 2) adopt a decision to lower the prices if they have increased as a consequence of practices prohibited in this Law; 3) obligate that illegal use of a company name, trademark, product marking or inaccurate indication of a product's origin be terminated, and may detain goods due to those infringements; and 4) apply to either the Government of Lithuania or the court to terminate illegal practices of managing bodies or to repeal adopted decisions. Chapter 5 Protection of Competition in the Process of Concentration of Market Structures Article
13. Control of the Concentration of Market Structures If by virtue of agreement or acquisition of a controlling interest the maximum concentration of market structures (concentration of capital), which is established by the Competition Council, is exceeded, the party or parties involved in the concentration must notify the Institution of Price and Competition before undertaking any steps which may alter the permanent market structure and degree of its concentration. The Institution of Price and Competition, upon receiving notification from the interested economic entities about a planned concentration of market structures, must adopt a decision concerning the granting of permission within one month. Upon an agreement between the parties, the deadline for the adoption of the decision may be extended, but for no longer than 9 months. If within the indicated periods of time the Institution of Price and Competition does not make a decision, the economic entities shall acquire the right to carry out the planned concentration of market structures. Article
14. Permitted and Prohibited Concentrations of Market Structures Upon the execution of a concentration of market structures which was not announced in advance and for which permission of the Institution of Price and Competition was not granted, economic sanctions prescribed by Article 12 of this Law shall be applied. Permission to concentrate market structures which has not been approved by the Institution of Price and Competition may be granted by the written decision of the Government of the Republic of Lithuania. Such permission may be granted if the parties involved in the concentration provide substantiation proving that this action will result in the increase of economic efficiency of production or competitiveness of goods, which cannot be achieved in any ways other than by the suggested concentration of market structures. Chapter 6 Responsibility for Violations of the Law Article
15. Consequences of Violating the Law Decisions of the bodies of State government regarding violations of the Law may be appealed to the court. Economic entities, having violated this Law, must: 1) execute the instructions of the Institution of Price and Competition to discontinue the activities, restore the previous situation, terminate or alter the agreement, and fulfill other obligations; 2) recover the losses incurred by a partner; and 3) fulfill the sanctions imposed by the Competition Council as provided by this Law. The Competition Council shall have the right to: 1) impose fines comprising up to 10 per cent of the total annual gross income on economic entities for infringement of Articles 3, 4, 7, 10 and 11 of this Law, nonobservance of the agreement concerning the termination of illegal practices, or intentional failure or untimely compliance with obligations and instructions; 2) impose fines amounting up to 3 per cent of the annual gross income on economic entities for submission of misleading information; and 3) impose fines equaling up to 3 months average earnings on officers of bodies of State government and economic entities for the intentional failure or untimely compliance with the directions issued by the Institution of Price and Competition as prescribed by this Law, or for submission of misleading information. Article
16. Exaction of Fines Fines shall be transferred to the State budget within one month of the date that the economic entity or officer receives the decision of the Institution of Price and Competition to impose a fine. A fine shall be exacted from the income of an economic entity without suit. Article
17. Appeal against Decisions of the Institution of Price and Competition Economic entities, managing bodies and officers may, within one month of the date the decision of the Institution of Price and Competition is received, apply to the court to revoke or alter the said decision and recover losses. Appeals to the court shall not suspend compliance with directions and decisions of the Institution of Price and Competition unless the court stipulates otherwise. Decisions of the Institution of Price and Competition and their motives shall be publicly announced. Article
18. Procedure for Recovering Losses Losses incurred by economic entities or consumers due to violation of this Law must be compensated for in the procedure established by law. Losses incurred by economic entities due to decisions made by bodies of State authority and government or the Institution of Price and Competition which violate the requirements of this Law shall be compensated with the funds of either the respective bodies of government or the State budget, and shall later be exacted from the violators. Losses shall be exacted by suit. VYTAUTAS LANDSBERGIS President Supreme Council Republic of Lithuania Vilnius 15 September 1992 No.I-2878 ____________