Facts and Analysis. Activity and Policy Changes of the Competition Council 2009–2013

Konkurencijos leidinysABSTRACT  of LFMI analysis “Facts and analysis. Activity and policy changes of the Competition Council 2009–2013“

The object of this analysis is the activity and policy changes of the Competition Council (2009-2013). Three main aspects of the council are under assessment: its activity, the changes in the Law of Competition, and how the Competition Council itself has assessed its accomplishments.

Trends and statistics

The amount of rulings made by the Competition Council is decreasing, but the penalties it issues are getting larger. This allows us to think that the Council is concentrating more on large-scale investigations that involve violations of the Law of Competition that disturb the market most.

Rulings on concentrations (rulings on mergers) still make up the largest share of all the Council’s rulings, despite having decreased during 2009-2013. The numbers of identified violations and concentration prohibitions remain very low.

The number of rulings for abuse of the dominant position has increased, but a part of the rulings are withdrawals of investigations or refusals to initiate investigations. Only a few penalties were issued for abuse of the dominant position; some of the penalties were extremely harsh.

The amount of violations by the bodies of public administration is not decreasing. The number of instances when public administration bodies fail to comply with the rulings of the Competition Council is increasing.

The amount of the rulings on prohibited mergers has increased; so have the penalties for the violation. During the past five years, the total amount in penalties was 17 times bigger than during the period of 2000-2008.

Changes in the Law of Competition that have affected the supervision of competition

The administrative requirements for economic entities in the field of concentration supervision were reduced. The powers of the Competition Council have been expanded; it has acquired more legal tools to be used during investigations.

The competition law regulation is being elaborated, which adds clarity to social relations.

The methodology of assessing the public benefits of the Competition Council activity

The assessment of the cartel duration is inaccurate because it fails to take into account that such agreements are short-lived by nature and do not necessarily constitute economic harm.

Due to the principles of the economy of scale, prices do not necessarily increase in the event of concentration. In Lithuania, merger control is too stringent, which does not guarantee greater security.

When assessing the benefits of given penalties, the harm done is not assessed. In addition, the underlying assumption that the state is able to use the acquired money more efficiently than the consumers or the penalized companies persists.

Download the analysis (available in Lithuanian only): “Facts and analysis. Activity and policy changes of the Competition Council 2009–2013“