Fines for breaches of competition rules in Lithuania have long ceased to be merely symbolic. Media headlines reporting sanctions imposed by the Competition Council running into millions – and sometimes tens of millions – of euros have become commonplace. Recently, however, a different development has begun to take shape: courts of first instance are increasingly setting side or criticising decisions adopted by the Competition Council.
In this context, businesses are increasingly confronted with a practical question: is it worth admitting an infringement in return for a relatively modest reduction in the fine, or is it more prudent to defend one’s position before the courts? The answer is not as obvious as it may seem at first glance, notes Rasa Zaščiurinskaitė, Partner and Head of the EU and Competition Law Practice Group at COBALT, and Edvinas Einoris, Senior Associate in the EU and Competition Law Practice Group at COBALT. The growing debate also raises a broader question: does the current system create stronger incentives to cooperate or to litigate?
European Commission‘s Attention Turns to the New Fining Methodology
On 1 May 2026, amendments to the methodology for calculating fines for competition law infringements came into effect.
While the rule that fines may amount to up to 10% of the annual worldwide turnover of an undertaking or corporate group remains unchanged, the methodology determining how quickly the Competition Council may approach that limit has been revised.
The calculation of fines involves several stages. Under the previous methodology, the first stage alone could quickly increase a fine to the maximum 10% cap. The new rules introduce a stricter limitation on the Competition Council: following the first stage of the calculation—during which the value of infringement-related sales, as well as the gravity and duration of the infringement, are assessed—the resulting amount may not exceed 5% of the undertaking’s or corporate group’s annual worldwide turnover. In other words, the first stage of the calculation can no longer, by itself, bring a fine up to the maximum cap.
According to COBALT lawyers, the practical effect could be significant. If a company’s worldwide turnover amounts to EUR 30 million, under the previous methodology the fine could have reached the EUR 3 million cap even before any adjustments for aggravating circumstances were taken into account. Under the new methodology, in the same scenario, the initial amount could not exceed EUR 1.5 million and could approach the EUR 3 million cap only if additional aggravating circumstances or a basis for additional deterrence were established.
The Competition Council has criticised these legislative amendments. The changes have also drawn criticism from the European Commission (EC), which has expressed doubts as to whether the new regime is consistent with European Union law and capable of ensuring sufficiently effective and deterrent sanctions for infringements of competition law. As recently reported by the Competition Council, the EC has requested information on the measures Lithuania intends to take to address the current situation.
But do these new changes really signal a more “lenient” state policy under which fines will, from now on, effectively be halved in all cases? Not necessarily.
Corporate Groups Remain Exposed to Significant Risk
While the new rules may lessen the financial impact on individual companies, they do not change one fundamental reality: a competition law infringement can become a problem for an entire corporate group.
Recent practice of the Competition Council indicates a growing tendency to impose liability not only on the company directly involved in the infringement, but also on its parent company (and, in certain cases, on another company within the group).
In practice, this means that an infringement committed by a relatively small company may become a major issue for the entire group. In such circumstances, although the fine would formally remain within the 10% cap calculated on the basis of the group’s turnover, it could, for the infringing company itself, approach or even exceed its entire annual turnover. A similar situation arose in one of the Competition Council’s decisions that was set aside by a court of first instance earlier this spring.
For this reason, competition law risks within corporate groups are not merely local in nature. The actions of a single company may expose the entire group to financial and reputational risks, while potential fines can increase exponentially.
To Admit or to Contest?
The Competition Council encourages companies to cooperate and acknowledge infringements they have committed. This is understandable: ongoing investigations can be completed more quickly, and the authority’s resources can be used more efficiently. The practical question, however, remains whether the incentives currently offered are sufficient from a business perspective.
In Lithuania, admitting an infringement after an investigation has already been initiated results in a 10–15% reduction in the fine. This is not an insignificant benefit. Nevertheless, when dealing with multi-million-euro fines calculated on the basis of consolidated group turnover, reputational harm, potential civil claims, or consequences for participation in public procurement procedures, such a “discount” does not always appear to be a sufficient incentive to forgo litigation and admit an infringement.
Recent developments demonstrate that court rulings favourable to businesses in competition law cases are not exceptional. Admittedly, the final word in some of these cases will still rest with the Supreme Administrative Court of Lithuania.
As a result, companies often take a pragmatic view: is it worth admitting an infringement in exchange for a 10–15% reduction in the fine if litigation may ultimately produce a more favourable outcome?
Accordingly, the lawyers note that while a formal incentive to cooperate exists in Lithuania, its practical effect may be limited if, in practice, the authority‘s approach remains focussed on imposing the highest possible fines.
Finding the Right Balance Between Deterrence and Cooperation
The 2026 amendments to the methodology for calculating fines imposed by the Competition Council provide an opportunity to reflect on how the authority intends to promote a stronger competition culture in Lithuania.
The Competition Council is right to emphasise that fines must have a deterrent effect. Without meaningful sanctions, competition rules would remain merely principles on paper. On the other hand, if deterrence is understood primarily as the threat of ever-higher fines, businesses will naturally opt for litigation rather than cooperation.
This is where the question of the comma arises. One could say: “Deter, not encourage cooperation.” Under that approach, competition culture is driven by substantial fines and headlines designed to warn businesses. Yet the comma can be placed elsewhere.
“Effective competition law deterrence should be measured not only by the size of fines, but also by whether the system creates genuine incentives for businesses to cooperate with the authority and foster a culture of compliance,” says R. Zaščiurinskaitė. “This does not mean that infringements should go unpunished. Rather, it means that effective deterrence should be understood more broadly than simply the risk of the maximum possible fine.”
The new methodology, R. Zaščiurinskaitė concludes, has curtailed the Competition Council’s ability to reach the maximum fine more quickly. However, if this limitation is, in practice, offset by a more frequent use of other mechanisms for increasing fines, the message being sent to businesses about the benefits of cooperation will become less convincing.
