The Lithuanian financial process automation company Unifiedpost, managed by the Belgian Unifiedpost Group, is unsuccessfully litigating with Lithuanian Post over increased tariffs - the company's complaints and requests are not satisfied by the courts, and the Competition Council is not investigating Post's possible abuse of its dominant position.
At the end of February, the Court of Appeal decided that competition violations must be investigated by the Competition Council, therefore the court cannot award the nearly 0,5 million requested by Unifiedpost. damages from Lithuanian Post.
In addition, at the request of Lithuanian Post, the court disagreed with the interpretation of the first instance court that the company is dominant in the market.
According to the Competition Council, Unifiedpost complained in 2022 that Lithuanian Post may be abusing its dominant position by increasing tariffs. According to the council, the investigation was not started because the company did not properly formulate the complaint.
The dispute is taking place over the December 2022 increase in Lithuanian Post rates for business customers, which the post office announced in August of the same year.
"Unifiedpost" asked the Lithuanian Postal Court to compensate 436. EUR damage
On February 29, the Court of Appeal of Lithuania rejected Unifiedpost's request to re-examine the issue regarding the obligation for Lithuanian Post to end the changed pricing for business customers, to prohibit setting higher rates, and to award 436. EUR with 6 percent interest compensation and admit that the company abused its dominant position.
The Court of Appeal left unchanged the partial decision of the Vilnius District Court made in October 2023.
In its complaint, Unifiedpost asked for its arguments to be re-examined - the company stated that Lithuanian Post increased rates 3-7 times, but neither wages nor fuel prices increased, and the application programming interface (API) system installed by the post office allowed the company to cut 13 percent. workers.
In addition, according to Unifiedpost, Lithuanian Post is the only one with the infrastructure necessary to provide the company's necessary services throughout Lithuania. According to Grant Thornton Baltic, an independent expert commissioned by Unifiedpost, the new pricing of Lithuanian Post is too high by an average of 262,8%, and the post office increased the rates of parcel delivery the most where there is no competition.
"In the second and third zone, where the defendant (Lietuvos paštas - BNS) has practically no competition, the tariffs were increased significantly more. (…) This shows that the defendant seeks to compensate for potential loss of profits in the first zone by unfair means with higher rates in the second and third zones, where the defendant basically has no competitors," Unifiedpost told the court.
At that time, Lithuanian Post stated that it increased prices after starting to implement the centralized smart distribution of letters and parcels, which processes many parcels in a short time, significantly reduces errors, and informed customers about this back in 2020 - long before raising prices.
Lithuanian Post also noted that "Unifiedpost" is already using the services of competitors, not Post, and this proves that it does not occupy a dominant position, and therefore it did not abuse it.
"The plaintiff (Unifiedpost - BNS) did not explain what reasons hindered its ability to purchase all necessary services from the competitor of the defendant (Lietuvos pašto - BNS) "Pašto paslaugos". If the plaintiff already buys services from a competitor, there is no basis for assessing that the defendant operates independently of the competition of other business entities," Lithuanian Post noted.
Lithuanian Post added that the conclusion of the "Unifiedpost" expert is completely unfounded - it does not indicate either postal costs or the profitability of the service.
The appellate court stated that the first instance court rightly did not consider the issue of reimbursement of Unifiedpost's expenses, as it should first be established that Lithuanian Post abused its dominant position, which the court cannot do.
In July 2022, the Vilnius District Court rejected Unifiedpost's request to temporarily suspend changes to the taxing of parcels changed by Lithuanian Post for business customers.
The Competition Council lacked data to launch an investigation
Elon Šatas, Chief Counsel of the Competition Council, said that Unifiedpost approached the council before starting the legal dispute, but it did not start an investigation until the company supplemented its complaint, as requested.
"In 2022, the Competition Council received a complaint from the company "Unifiedpost" that Lithuanian Post might not fulfill the above-mentioned obligations or fulfill them improperly. Since the complaint did not meet the requirements of legal acts, we asked the applicant to supplement it, but the company did not do so and decided to defend its rights in court", said E. Šatas in a comment to BNS.
According to him, a similar dispute arose in 2016, when Lithuanian Post changed the pricing without prior warning.
"Such actions of Lithuanian Post possibly discouraged the participation of other postal service providers in public procurement, as the company could at any time, with 30 days' notice, increase the tariffs applied to postal service providers," explained E. Šatas.
In solving this issue, Lithuanian Post undertook to notify the new service tariffs no later than 3 months before their entry into force and to apply a 21-month transitional period to the public procurement contracts of other postal service providers after they enter into force. Then the Competition Council terminated the investigation.
"Discontinuing the investigation by confirming the companies' obligations is a tool that allows for a faster solution to the problem in the market," said E. Šatas.
He also noted that the Competition Law does not prohibit companies from occupying a dominant position, but it prohibits abusing it.
The Competition Council would not comment on whether Unifiedpost has resubmitted the complaint to it or whether an investigation is currently underway.
As far as Lithuanian Post is aware, a new investigation by the Council regarding the possible abuse of the post office has not been started.
"Lithuanian Post is not aware that the Competition Council has started an investigation into the circumstances of the case," the post told BNS.
The author is Goda Vileikytė
