An ambitious national competition authority and politicians gearing up for election have cast a spotlight on competition policy. Three notable legislative proposals have been tabled in Lithuania.
Additional protection to suppliers of major retailers
First, additional protection of suppliers against major retailers is proposed. The law already establishes a list of practices in which a retailer may not engage with respect to its suppliers. Fines of up to EUR 120 000 may be levied for infringements.
The proposed amendments would introduce two new prohibitions. First, retailers would be banned from receiving discounts from suppliers that were not agreed upon in advance in writing. Second, retaliation by retailers against suppliers who have lodged complaints would become a separate free-standing infringement.
The latter proposal is especially curious. There are no criteria for what constitutes retaliatory action. This implies that even conduct that would otherwise be perfectly legal, such as a reduction of orders, could potentially be cast as an infringement if the supplier has previously lodged a complaint against the retailer.
Whistleblower incentive system to be introduced
Second, protection and rewards have been proposed for whistleblowers. In an effort to encourage reporting of competition law infringements, a bounty of 1 percent of the fine eventually levied (but no less than EUR 1 000 euros and no more than EUR 100 000) is proposed for persons who offer evidence of a cartel or of vertical price-fixing.
In order to be eligible, a whistleblower would have to submit evidence prior to the Competition Council initiating an investigation. Evidence obtained through criminal activity would not qualify. The proposal establishes a requirement to protect the whistleblower’s identity, if he so requests, and to protect him from any liability arising from disclosure of commercial, professional or banking secrets or any other form of confidential and privileged information.
Insofar as competition law is concerned, this is a novel idea. The leniency programme (whereby an undertaking which participates in a cartel may obtain immunity against a fine if it is the first to confess wrongdoing to a competition authority) so far has not become a significant source of evidence in cartel investigations in Lithuania.
Monitoring powers to the Competition Council
Third, the Competition Council is likely to gain more powers to monitor how its recommendations are implemented by public institutions. The authority has so far been rather active in overseeing the conduct of other public authorities as regards the effects on competition. The new proposals seek to bring this line of work even further by extending the Council’s right to take action if a public body flaunts the recommendations it has previously received from the competition authority.