LFMI’s study on competition law and its application in Lithuania

On 21 June 2006 LFMI staged a seminar “Competition Law and its Application in Lithuania” to debate the existing situation with competition law in Lithuania, its application and tendencies. At the event, lawyers, policy analysts and government representatives searched for ways how to solve problems arising in applying competition law and analysed the interrelation of state institutions supervising competition in Lithuania. LFMI presented an in-depth study on competition law and its application in Lithuania.

The study conducted by LFMI shows that competition policy is directed towards modelling relations on the market and restricting the handling of private property and private settlements, rather than towards eliminating the genuine threats to competition and reducing government-erected constraints. Such practice, argues LFMI, undermines the underpinnings of competition and the market.

LFMI’s President and a co-author of the study Dr. Remigijus Šimašius highlighted that competition law and its rigid application often forces companies to adopt unsound decisions and to refrain from expanding their business activities, merging, reverting to other forms business organisation and coordinating actions even when it is crucial. “Business decisions are trapped under a magnifying glass, but the real roadblocks to competition – state privileges, regulations, various restrictions, government support and exemptions – remain our everyday life,”- commented Mr. Šimašius.

LFMI proposes to soften the rules of competition and allow the market itself to reveal the most effective solutions, rather than burdening businesses with additional regulatory and bureaucratic load. LFMI believes that it is especially important to revise the rules of ex ante regulation of specific markets (e.g. the telecommunications and the energy sectors) as they frequently create only an illusion of the market and forces it into stagnation.

The study on competition law done by the Institute presents an overview and evaluation of competition policy, regulation and the basic aspects of its implementation. It also analyses the functions of the Lithuanian Competition Council and the practice of how these functions have been performed. They include cartel agreements, supervision of concentration, control of dominating economic agents, market research and others. The study also provides recommendations regarding the principles of further regulation of competition. The study is written in Lithuanian only.