Global Competition Law is primarly a practitioner's guide presenting the most salient aspects of the major competition laws country by country, giving an overview of their structure and most charasteristic elements.
Global Competition Law also provides insight into possible future developments in the field.

Global Competition Law

Upon establishing that an undertaking, whether private or public, has infringed the Competition Act, the Competition Council has the right to place the undertaking under an obligation to end the illegal activity and to take steps to restore the previous situation or to eliminate the consequences of infringement (Section 35(1)(1)).
A 12 March 2019 amendment introduced structural remedies into Lithu …

Cease and desist orders

Upon establishing that an undertaking, whether private or public, has infringed the Competition Act, the Competition Council has the right to place the undertaking under an obligation to end the illegal activity and to take steps to restore the previous situation or to eliminate the consequences of infringement (Section 35(1)(1)).

A 12 March 2019 amendment introduced structural remedies into Lithuanian competition law, in addition to the behavioral remedies already provided for in Section 35(1)(1) of the Act. Pursuant to new Section 35(1)(2), the Council may oblige undertakings to terminate a prohibited agreement or abuse of a dominant position by means of changes in the structure of undertakings, including obligations to sell all or part of an undertaking, its assets, shares or parts thereof, and to set time-limits for compliance. The 25 June 2020 amendment added the possibility to force the undertaking to reorganize. 

However, Section 35(5) specifies that the Competition Council must apply a proportionality test to resolve which type of remedy is the least burdensome on the undertaking.

Upon authorization of the Vilnius Regional Administrative Court, the Council may adopt a resolution ordering temporary suspension of the following: import/export operations, bank operations, or a license to engage in certain activities (Section 35(3)).

Where it has been shown that an undertaking, whether private or public, has engaged in conduct prohibited under the Act, Section 35 provides that the Competition Council may impose fines. Following the 25 June 2020 amendment, designed to transpose the ECN+ Directive, those fines must be “effective and dissuasive”. 

The amendment also specifies that in cases where two or more natural or legal persons performing economic activities act as one economic entity, the parent and subsidiary undertaking are jointly and severally liable for violations of the Competition Act, as well as other persons performing economic activities constituting the economic entity (Section 35(6)). In addition, new Section 35(7) provides that liability for violations of the Act applies to the successors of the rights and economic activity of the undertaking which has committed the violation.

Pursuant to Section 36, a fine up to 10% of the gross annual income on the preceding business year may be imposed for acts such as being involved in a prohibited agreement, or abusing a dominant position. To enhance the dissuasive effect of sanctions, the 2020 amendment provides that the fine is now calculated on the basis of the worldwide turnover of the undertaking or group of undertakings. 

A fine up to 1% of the gross annual income in the preceding business year may also be imposed for providing incorrect or incomplete information or for not providing information required over the course of an investigation and for obstructing Competition Council officers in the performance of their duties.

Daily penalties of up to 5% of the average gross daily income in the preceding business year may be imposed for each day of non-compliance with the obligations laid down by the Competition Council to discontinue the illegal activity, to perform actions restoring the previous situation or eliminating the consequences of the violation. The same also applies in the event of failure to comply in a timely manner with the instructions to provide information and failure to meet the assumed obligations in the cases provided for by the Act.

In setting the amount of the fine to be imposed, the Council shall have regard to the gravity of the infringement, the duration of the violation, the influence of the undertaking in the infringement, any other mitigating or aggravating circumstances and the value of the goods directly and indirectly related to the infringement (Section 37).

On 18 January 2012, the Competition Council adopted a new resolution adopting a “Methodology for setting fines” for infringements of the Act. Pursuant to the Methodology for setting fines, the Council will determine the basic amount of the fine by taking up to 30% of the value of sales directly or indirectly related to the infringement. A multiplier for each year of the infringement may be applied and the fine may also be increased in the case of repeat infringements. According to the Council, such methodology makes it possible to achieve “better individualization of fines and, when needed, to apply bigger fines with stronger deterrent effect”.

The directors of undertakings party to a prohibited agreement or responsible for an abuse of dominant position may also be sanctioned personally. They may be fined up to EUR 14,481 and deprived of the right to manage a public and/or private legal entity, or to be a member of a collegial supervisory and/or governing body of a public and/or private legal entity for a period from three to five years (Section 40). 

New Section 39-1, introduced by the 25 June 2020 amendment, specifies that where an association of undertakings is unable to pay the fine imposed by the Competition Council, it must demand contributions from member undertakings to cover the amount. 

Finally, where a public administration violates its duty to ensure freedom of fair competition under Section 4 of the Act, a fine of up to 0.5% of its annual budget in the current year and other gross annual income received in the previous year, may be imposed provided it does not exceed the amount of EUR 60,000. Moreover, a fine of up to EUR 6,000 may be imposed on public administration entities for failure to provide information necessary for the conduct of an investigation, as well as for failure to provide complete or accurate information.

Fines

Under Section 38, an undertaking party to a restrictive agreement may be exempted from the imposition of fines where the undertaking provides information prior to the beginning of an investigation, is the first of the undertakings involved to do so, and cooperates with the Competition Council in the course of the investigation. However, if the undertaking has been the initiator of the infringement, the leniency regime does not apply. Before the 2012 amendments, lenciency was only available for horizontal agreements. Since May 2012, undertakings party to a vertical price-fixing agreement have also been able to apply. The 25 June 2020 amendments bring more clarity for applicants on conditions and procedure for leniency, in accordance to the requirements of the ECN+ Directive.

Section 38 is implemented by Resolution No 1591 of 6 December 2004 of the Government of the Republic of Lithuania and Resolution No 1S-27 of 28 February 2008.

In addition, since 1 July 2019, the Competition Council may reward natural persons who report infringements of competition law and ensure the protection of their identity (New Section 38-1). In exchange for information, whistleblowers will receive a one-off payment (ranging from EUR 1,000 to EUR 100,000) corresponding to 1% of the fines imposed on the offenders. However, the reward may not be granted to persons who received the evidence as a result of a criminal offence or as a result of their obligations within the law enforcement authority. 

Global Competition Law

484. Cease and desist orders

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Les notions juridiques connexes

484. Cease and desist orders

Demandez un accès gratuit au contenu exclusif Livv – juristes d’entreprise

Les notions juridiques connexes

Demandez un accès gratuit
au contenu exclusif Livv – juristes d’entreprise