Discussions are not in violation of competition: in the dispute with the clubs, court sides with LKL

Symbolically, on the same day that the winner of the 2021–2022 Lithuanian Basketball League (LKL) championship season was announced, the Vilnius Regional Administrative Court issued a decision that made the LKL and all ten clubs in the league happy.

Rasa Zaščiurinskaitė, Partner at the law firm COBALT, Head of the Competition Law Practice Group.
Rasa Zaščiurinskaitė, Partner at the law firm COBALT, Head of the Competition Law Practice Group.
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Lrytas.lt

Jun 22, 2022, 12:00 PM

The court overturned the Competition Council's ruling that LKL and the clubs had violated competition rules by allegedly agreeing not to pay the players' salaries for the remainder of the 2019–2020 championship season, when it had to be cancelled due to the COVID-19 pandemic. The Court also annulled the fines imposed on the LKL and the clubs, totalling €40,080.

This was the first investigation and ruling of the Competition Council related to the COVID-19 pandemic and sports in Lithuania. The Polish Competition Authority later followed suit by launching a similar investigation.

The court, after assessing the transcript of the audio recording of the LKL meeting and other evidence gathered by the Competition Council, found that the council did not, however, prove that the discussions held during the LKL Board meeting in March 2020 in itself restricted competition.

The court agrees that the fate of the championship season was indeed at stake on that occasion. At that meeting, the LKL also discussed the legal and financial implications involved. However, such discussions cannot in themselves be regarded as restricting competition.

The Court also stressed that the Competition Council did not carry out a competition impact assessment. This contributed to the decision to annul the council's decision in its entirety.

The court's judgment emphasises that liability under competition law is the most severe type of liability, and therefore the Competition Council's conclusions on the infringement and the application of liability must be reached only after a proper and comprehensive assessment.

COBALT lawyers, who represented the LKL and one of the basketball clubs, are pleased that the court has looked into the context and content of the discussions between the LKL and the basketball clubs at the very beginning of the COVID-19 pandemic, and has properly assessed the context of the COVID-19 pandemic, the specifics of the sporting activity and other factors.

That said, this case has not fully concluded. The Competition Council indicates on its website that it will consider whether to appeal against the decision. Everything should become clear in early July.

About Cobalt:

COBALT is one of the largest law firms in the Baltic States. More than 200 lawyers provide comprehensive services to local, regional and international corporations, foundations, credit institutions and businesses, as well as individuals in all areas of business law. The firm has won the title of „Best Law Firm in the Baltics“ seven times. The most prestigious law firm directories Chambers Global, Chambers Europe, Legal 500, IFLR 1000, and others annually list COBALT among the best law firms in the region.

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