Meaning of „Concentration“ Differences according to Lithuanian Law and EC Law on Concentrations
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Abstract
Lithuania has became a member of EU in 2004. Accordingly, Lithuanian legal entities which prepare to make concentrations have to comply with EU law as well Lithuanian law on concentration. The main task is to be aware of how Lithuanian law on competition covering concentration of legal entities corresponds to EU law regulating the same.
Undertakings have to satisfy three – level – test: at the first level, if the intended concentration involves undertakings which combined aggregate income is less than LTL 30 million for the financial year preceding concentration then undertakings may proceed on this transaction without any restrictions; at the second level the intended concentration must be notified to the Lithuanian Competition Council and its permission shall be required (if combined aggregate income of the undertakings concerned is more than LTL 30 million for the financial year preceding concentration and the aggregate income of each of at least two undertakings concerned is more than LTL 5 million for the financial year preceding concentration); the third level deals with concentrations reaching Community dimension where the undertakings concerned have to notify to Commission and get it’s permission.
If each of undertakings concerned achieves more than two–thirds of its aggregate Community–wide turnover within Lithuania, there is a second – level concentration and undertakings involved have to notify to Lithuanian Competition Council.
Consequently, if „concentration“ notion in EU law on Concentration is not similar to „concentration“ notion in Law on Competition of Lithuania, the undertakings depending on the single fact whether their aggregate turnover is within one territory or not may stay at different positions in the market.
Accordingly, this article analysis whether the „concentration“ concept in Law of Competition and EC Regulation on Concentration resembling to each other.
According to the Lithuanian law as well EC law the concentration may arise either as a result of a merger between independent undertakings or parts of it or as a result of a change of control. Analysis of cases law practices proved the fact that concept of „merger“ in Lithuania is not similar to EC law.
A merger within the meaning of Article 3(1) (a) of the Merger Regulation occurs when two or more independent undertakings amalgamate into a new undertaking and cease to exist as separate legal entities or when an undertaking is absorbed by another.
A merger within the meaning of Article 3(1)(a) may also occur where, in the absence of a legal merger, the combining of the activities of previously independent undertakings results in the creation of a single economic unit.
According to the Lithuanian case law term „merger“ involve only first meaning excluding the second. Whereas the meaning „change of control“ in Lithuanian case law is similar to the meaning in the EC case law.
Undertakings have to satisfy three – level – test: at the first level, if the intended concentration involves undertakings which combined aggregate income is less than LTL 30 million for the financial year preceding concentration then undertakings may proceed on this transaction without any restrictions; at the second level the intended concentration must be notified to the Lithuanian Competition Council and its permission shall be required (if combined aggregate income of the undertakings concerned is more than LTL 30 million for the financial year preceding concentration and the aggregate income of each of at least two undertakings concerned is more than LTL 5 million for the financial year preceding concentration); the third level deals with concentrations reaching Community dimension where the undertakings concerned have to notify to Commission and get it’s permission.
If each of undertakings concerned achieves more than two–thirds of its aggregate Community–wide turnover within Lithuania, there is a second – level concentration and undertakings involved have to notify to Lithuanian Competition Council.
Consequently, if „concentration“ notion in EU law on Concentration is not similar to „concentration“ notion in Law on Competition of Lithuania, the undertakings depending on the single fact whether their aggregate turnover is within one territory or not may stay at different positions in the market.
Accordingly, this article analysis whether the „concentration“ concept in Law of Competition and EC Regulation on Concentration resembling to each other.
According to the Lithuanian law as well EC law the concentration may arise either as a result of a merger between independent undertakings or parts of it or as a result of a change of control. Analysis of cases law practices proved the fact that concept of „merger“ in Lithuania is not similar to EC law.
A merger within the meaning of Article 3(1) (a) of the Merger Regulation occurs when two or more independent undertakings amalgamate into a new undertaking and cease to exist as separate legal entities or when an undertaking is absorbed by another.
A merger within the meaning of Article 3(1)(a) may also occur where, in the absence of a legal merger, the combining of the activities of previously independent undertakings results in the creation of a single economic unit.
According to the Lithuanian case law term „merger“ involve only first meaning excluding the second. Whereas the meaning „change of control“ in Lithuanian case law is similar to the meaning in the EC case law.
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Please see Copyright and Licence Agreement for further details.
