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New legislation

2 May 2012

On 1 May 2012, the Law amending the Law on Competition as of 22 March 2012 came into force implementing a new wording of the Law on Competition (the „LC“).The following changes in the legislation may be considered as the most important:

Amendments in relation to the competences of the Competition Council:

a) Point 3 of Paragraph 2 of Article 18 of the LC enables the Competition Council to establish priorities of its activity.  It is anticipated that this should ensure a better use of economic and human resources dealing with investigation of the most significant violations of the LC. Accordingly, the Competition Council shall be entitled to refuse to initiate such investigations if it does not comply with the priorities set by the Competition Council.

b) The new wording of the LC enables the officers of the Competition Council to receive a court authorisation for requesting the service providers to provide information on the subscribers or users of electronic communication services, the stream data as well as on the content of the information transferred by the electronic communication network.

c) Paragraph 1 of Article 33 of the LC sets out that  those decisions of the Competition Council that prevent further investigation of the case or that complete the hearing of the notification of concentration only can be challenged at the Vilnius Regional Administrative Court. Hence, Lithuanian legislation was brought in line with the case law, which refused to grant the right on appealing against the decisions that are procedural in nature. 

Amendments in relation to the control of concentrations

a) The threshold of combined aggregate income of undertakings involved in concentration was increased up to 50 million. Paragraph 1 of Article 8 of the LC states that the intended concentration must be notified to the Competition Council and its permission must be obtained where combined aggregate income of the undertakings concerned in the business year preceding concentration is more than LTL 50 million (LTL 30 million was in the previous wording of the LC) and the aggregate income of each of at least two undertakings concerned in the business year preceding concentration is more than LTL 5 million.

b) New principles of calculating combined aggregate income of undertakings involved in concentration. The amendment discussed is determined by the changes in Paragraph 14 of Article 3 of the LC stating the new concept of a group of associated undertakings. Paragraph 2 of Article 8 now provides that the calculation of combined aggregate income of undertakings involved in the concentration must include the calculation of the income of undertakings, 1/3 (1/4 in the previous wording of the LC) of all the shares, votes or property of which is possessed by the undertakings under consideration.

c) A new approach was adopted in respect of transactions carried out without the permission of the Competition Council. The previous wording of the LC stipulated that all transactions and acts of the undertakings and controlling persons shall be held invalid and not creating any legal consequences if they were carried out without the permission of the Competition Council if this was required under the law. The new wording of the LC establishes that transactions and acts of the undertakings and controlling persons shall be held invalid and not creating any legal consequences only if the Competition Council refuses to grant permission to implement the concentration. Therefore, concentration transactions executed without the prior written permission of the Competition Council shall not be held void per se.    

Other changes:

a) Changes to the regulation on protection of commercial secrets.Article 21 of the LC states that commercial secrets of undertakings disclosed to the Competition Council and its administrative staff in the course of exercising control over compliance with this Law must be kept confidential and, in the absence of the undertaking’s consent, must be used only for the purposes the information was provided. The amendments to this Article stipulate the obligation of undertakings to play an active role in the protection of their own commercial secrets: Paragraph 2 of Article 21 states that an undertaking shall have the right to submit a request to the Competition Council to protect its commercial information as soon as the undertaking finds out that the Competition Council has such information in its disposition or when such information is disclosed to the Competition Council by the undertaking. If such request is not submitted to the Competition Council it is held that the information on the undertaking does not constitute a commercial secret (Paragraph 4 of Article 21). 

b) Changes regarding sanctions for infringements of the LC. Point 2 of Paragraph 3 of Article 40 of the LC sets out a new rule that the former head of the undertaking shall be exempted from fines upon notifying the Competition Council that the undertaking under his or her control participated in the prohibited agreement and providing all the information in relation to such an agreement. Paragraph 3 of Article 37 of the LC now establishes a particular seven year period during which a repeated commission of the infringement may be established. Such circumstance aggravates the liability of undertaking and has an impact on the amount of the fine imposed.

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