The Competition Council of Latvia (the CC) has prepared a self-assessment tool for entrepreneurs, so that they could verify in an easy manner, whether they have not engaged in a prohibited agreement with competitors or so-called cartels due to their negligence or lack of knowledge.
The self-assessment tool contains a compilation of the most typical situations, but not all possible examples, where entrepreneurs deliberately or unconsciously can become participants of cartels. For example, a prohibited agreement is considered as a communication of competitors regarding participation or non-participation in a particular procurement, prices offered in procurements, or a request to prepare “cover tenders” without a real desire to compete, because entrepreneurs have already decided, who will be the planned winner. Also agreements of companies on prices, market and customer distribution, and other conditions are prohibited. Such activities may result in imposing of severe fine up to 10 % of the net turnover of the company in the previous year, and also a one-year prohibition to participate in procurements.
The competition law stipulates that a company can be punished for a prohibited agreement, which is implemented one, five or even ten years ago. Therefore, the CC encourages the companies that have been engaged in a prohibited agreement of competitors deliberately or unconsciously not to remain silent and use the opportunities offered by the Leniency Programme.
Ieva Šmite-Antoņenko, the Head of the Cartel Department: “The practice of the Competition Council over several years shows that cartels can be listed among the most significant problems of the Latvian competition environment. Only in the course of the last five years, 13 cartel cases have been detected, involving 64 companies that have been fined in the total amount of more than 3.5 million euros. The statistics speak for themselves; therefore, the Leniency Programme serves as a favourable lifeline for entrepreneurs. The Programme offers anonymity on the part of the authority to the first reporting company, as well as full release from a fine and prohibition to participate in procurements, whereas the companies that cooperate and provide evidence during investigation can qualify for reduction of fine.”
Consequences of cartels affect each consumer, because bid-rigging does not promote neither more friendly prices, nor diversity and quality of products and services. Therefore, every person who has any information on alleged infringements of the Competition Law can report to the authority by submitting an application or using the anonymous reporting form on the website. More information on the reporting options is available here: https://www.kp.gov.lv/en/ka-zinot-par-parkapumu.