The Competition Council of Latvia (the CC) has prepared an informative material for public administrative bodies.
To eliminate risks of public administrative body groundlessly engaging in commercial activity and causing competition distortion by such action, making difficult or even impossible for private market players to operate on the market, public administrative bodies, when establishing new capital companies or reconsidering their participation in the existing capital companies, have to carry out analyses of planned activities.
To make the assessment process easy perceivable, the CC has prepared an informative material, which explains, what is the meaning of a public administrative body acting in accordance with requirements of section 88 of the State Administration Structure Law (SASL), what is the course of assessment of establishment or participation in a capital company, and summarizes the most frequently encountered deficiencies in the assessment carried out by public administrative bodies.
The state, municipalities and their capital companies have special responsibility to observe the principle of competition neutrality – to ensure equal opportunities and attitude towards private and public market participants.
The guidelines of competition neutrality assessment include explanation of the concept and principles of competition neutrality, the restrictions stipulated by the Competition Law for public administrative bodies, and provide recommendations to state and municipal decision-makers and managers of capital companies owned by public administrative bodies on how to ensure compliance of activities of organizations. The CC also gives examples of possible problem situations in the guidelines, highlighting the cases, when activities of public administrative bodies and their capital companies do not correspond to the principles of competition neutrality.
The CC reminds, that amendments to the Competition Law will come into force on 1 January 2020. These amendments grant to the CC more efficient powers for preventing competition distortions caused by public administrative bodies, incl. providing for a possibility to impose fines on capital companies of public administrative bodies.