Vilnius, 22 May 2025 — The Lithuanian Competition Council has notified Panevėžys City Municipality of a suspected breach of competition law, after concluding that it may have unlawfully favoured a municipally owned company in awarding waste management contracts without competitive procedures.
According to the Council’s Dominant and Public Entities Investigation Group, the municipality directly contracted Panevėžio specialus autotransportas—a company it owns—to provide municipal waste services in August and December 2022. These contracts were allegedly awarded without any open or competitive tendering, potentially discriminating against other capable service providers.
The Competition Council contends that this conduct may have violated the Law on Competition, which prohibits public institutions from granting privileges or discriminating against specific market participants in ways that distort or could distort competition.
The investigation points out that municipalities are required to assess market conditions and hold competitive tenders before entering into internal transactions, except in narrowly defined exceptional cases. The 2022 ruling by Lithuania’s Constitutional Court reinforced this requirement, emphasizing that internal deals must not harm fair competition.
The Panevėžys case gained renewed urgency after the Constitutional Court ruled in October 2024 that legislative amendments made in 2023—seeking to exempt municipalities from competition rules for internal transactions—were unconstitutional. In response, the Competition Council resumed its inquiry in December 2024.
The Council has sent a formal notification of the suspected infringement to the municipality, which now has the opportunity to respond in writing and present its position at a hearing before any final decision is made. The notification is not a final ruling, and the Council may still reach a different conclusion after reviewing all arguments and evidence.
If a violation is ultimately confirmed, Panevėžys City Municipality could face financial penalties, and the case may set a precedent for how municipalities across Lithuania handle internal service agreements going forward.
