Lithuanian Competition Council Fines Capital Realty and Franchise Agencies for Anti-Competitive Practices

03 June 2024

On 14 May 2024 the Competition Council of the Republic of Lithuania fined Capital Realty (acting as a franchisor) and 20 of its franchised real estate agencies with a total fine of EUR 710,751 for price fixing agreement. Capital Realty and other members of “Capital” franchise network were found to have colluded to enforce a minimum commission fee of 3 percent for brokerage services, thus restricting mutual competition. This is the first case in Lithuania’s competition law practice where a franchise network was fined for anticompetitive actions.

The Competition Council’s investigation revealed that from February 2015, Capital Realty and an initial group of 10 agencies agreed to charge a minimum 3 percent commission fee for brokerage services to their clients. By 2017, an additional 10 agencies joined this agreement.

According to the Competition Council, regular meetings between February 2015 and December 2020, email communication between the managers of agencies, as well as general meetings of “Capital” franchise network members confirmed that these agencies collectively decided to maintain this minimum commission level, preventing any competitive price reductions. The investigation revealed that various additional measures helping to uphold the agreement were implemented (i.e. evidence collected by the Competition Council shows that managers agreed to introduce price monitoring and shared pricing data; internal audits and trainings were organized during which the “standard” pricing level within the “Capital” network was communicated).

Capital Realty and other agencies disagree with the agreement and claims that the commission fee discussed between the members was a price recommendation provided by Capital Realty. According to Capital Realty, by providing its agencies with price recommendations and other guidelines it sought to preserve the integrity of the “Capital” network and the quality of services. However, the Competition Council dismissed Capital Realty’s arguments entirely.

The decision is not final yet as it is open for appeal at the Regional Administrative Court within a month of its delivery. It is expected that Capital Realty and other members of “Capital” franchise network will challenge the decision in court. Nevertheless, the Competition Council’s ruling sends a clear message to businesses that franchisees are competitors and must be allowed to compete freely even within the franchise network.


Edita Daukšienė, Associate Partner

Darius Miniotas, Partner

WALLESS Lithuania