In a recent action to safeguard fair market access, the Competition Council has reinforced its stance that manufacturers and distributors are prohibited from agreeing to limit what goods and services are available to customers. This prohibition ensures that distributors cannot be restricted by manufacturers from selling products to customers in other countries, in line with the Competition Law and the Treaty on the Functioning of the European Union (TFEU).
Concerns have emerged around reports of a German medical equipment manufacturer allegedly coordinating with its European distributors to prevent the passive sales of its products to customers in Lithuania. Passive sales occur when a customer, without any solicitation, contacts a distributor in another country to make a purchase. The council received information suggesting that this manufacturer and its distributors might have agreed to restrict Lithuanian customers’ ability to buy certain products from distributors outside Lithuania.
In response, the Competition Council issued a preventive letter to the German company, reminding it that restricting passive sales constitutes an anti-competitive agreement under both national and EU competition laws. Such agreements can obstruct fair market access and consumer choice, violating key provisions under the TFEU and Competition Law.
The German company has since responded to the council, assuring that it will emphasize the importance of compliance with competition laws to its employees and partners in Lithuania. This move aligns with the council’s preventative approach, encouraging businesses to self-evaluate and, if needed, adjust their practices to avoid restrictive sales measures.
Through such preventive actions, the Competition Council seeks to remind companies of their legal obligations, promoting voluntary compliance over enforcement. However, should an investigation reveal anti-competitive agreements, violators could face fines up to 10% of their gross annual income from the previous year.
