During first six months of 2016 the Competition Council (CC) of Latvia has issued warnings to 17 undertakings, an association, including nine individuals, and a public authority under suspicion of breach of the Competition Law. These warnings are an effective procedure that allows to prevent an alleged prohibited agreement and competition distortions promptly, avoiding spending valuable resources for all parties involved.
A prohibited agreement in public procurements is still one of the most frequent violation of the Competition Law in Latvia. Therefore the CC is actively working on informing procurers for alleged cartel signs. The investment has paid off, since January 2016 the CC has received twice as much applications on the alleged infringements as in 2015. Also the CC has already issued more warnings to undertakings than in 2015 in total.
The CC can issue a warning instead of initiating a formal investigation in cases where the alleged breach is insignificant, undertakings pledge not to repeat such actions and when resources for investigation purposes might exceed public benefits. Thus, according to the Case Prioritisation Strategy of the CC, the authority is able to focus its resources on infringements that affect interests of the society and market participants the most.
Skaidrīte Ābrama, Chairwoman of the CC, said: “Since 2013 the CC is using warnings as an alternative preventive punishment method for violation of the Competition Law. On the basis of our experience, it can be concluded that the warnings have been effective as none of the warned undertakings have been involved in similar violations. I strongly believe that using this method we have made the public procurement system more transparent, fairer and more competitive”.
At the same time, the CC keeps track of the issued warnings, and if the CC would come across information, indicating a repeated alleged infringement, such infringement is likely to be formally investigated. And undertakings that are found to be breaking the Competition Law could face significant fines.
The CC also monitors that the imposed fines have been paid into the state budget after legal proceedings have been finalized. Overall during first six months fines in the amount of 1,7 million euros for violations of the Competition Law and the Latvian Administrative Violations Code, imposed by the CC in 2015 and previously, have been paid into the state budget.
Still more than 18,2 million euros haven’t been paid into the state budget, mostly because the decision has been appealed and the case is pending legal proceedings. Only after the legal proceedings have been finalized, except for cases when the court revokes the decision, the enterprise shall be obliged to pay the fine.
For media inquiries
Mr Toms Noviks
Head of Communication Unit
Competition Council of Latvia
Phone +371 67365210