By agreeing to pay players’ salaries Lithuanian basketball league and its clubs infringed competition law*
The Lithuanian competition authority Konkurencijos taryba found that the Lithuanian Basketball League (Lietuvos krepšinio lyga – LKL) and 10 basketball clubs concluded an anti-competitive agreement when they decided not to pay basketball players salaries or other financial remuneration for the rest of the season after the termination of the basketball championship 2019–2020 due to the pandemic. The infringement of the Law on Competition and the Treaty on the Functioning of the European Union resulted in fines ranging from Eur 1,070 to EUR 16,510.
The authority launched the investigation into a suspected anti-competitive agreement in April 2020, after evaluating public discussions on the exchange of the terms of payment relating to basketball players‘ salaries, which were held between the LKL and basketball clubs.
Konkurencijos taryba found that during the extraordinary meeting of the board, which took place on 13 March 2020, the LKL and 10 basketball clubs decided to terminate the 2019–2020 championship due to the coronavirus pandemic, applying the force majeure clause, and agreed not to pay salaries and remuneration for basketball players for the rest of the championship, starting from 13 March 2020.
The conclusion of the anti-competitive agreement was also evidenced by e-mail correspondence between the representatives of the clubs, which contained negative reactions to some of the clubs that deviated from the agreement to pay salaries to basketball players only until 13 March.
Although three LKL clubs did not express a clear position during the board meeting, Konkurencijos taryba concluded – with the view of the case-law of the Lithuanian and the EU courts – that all LKL clubs should be considered members of the anti-competitive agreement, irrespective of whether their support for the agreement was clearly expressed or implied.
“An undertaking willing to distance itself from an anti-competitive agreement must express its position firmly and clearly so that other members of the cartel understand its intentions. Silence at a meeting where illegal anti-competitive discussion takes place is not considered a strong and unambiguous distancing”, said Šarūnas Keserauskas, Chairman of the authority.
He noted that competitors cannot use the COVID-19 crisis to justify cartels or other competition law infringements, which seek to collectively mitigate the consequences of the crisis at the expense of employed persons or consumers.
According to Š. Keserauskas, if there was no agreed position on the payment of salaries or other remuneration after the termination of the championship, basketball players might have expected to receive a competitive salary and had better chances to negotiate. These factors could have determined the players’ decisions on the club’s choice for the next LKL championship, and, consequently, different positions of the clubs in the new championship season. After the authority’s interest in the situation and initiation of the investigation, the anti-competitive agreement between the basketball clubs and the LKL was terminated.
Having assessed the income, gravity of the infringement and its duration, Konkurencijos taryba fined the LKL EUR 3,440 and imposed a total of EUR 36,640 in fines on basketball clubs.
The decision of Konkurencijos taryba may be appealed to the Vilnius Regional Administrative Court.