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The CC detects bid-rigging among distributors of professional stage equipment

(28.04.2017.)

On 30 May, the Competition Council of Latvia (the CC) adopted a decision to impose a fine on nine companies, which had coordinated their activities within the framework of procurements of public and municipal authorities and cultural institutions owned by these authorities on acquisition of professional video, lighting, sound equipment and stage equipment. The CC imposed a fine in the total amount of 473,083 euros on the companies.

The CC started investigation, when one of the companies involved in the prohibited agreement reported on the alleged infringement on its own initiative within the framework of leniency programme in 2015. The company revealed to the CC information about bid-rigging among distributors of sound, lighting equipment and stage equipment, where information on participation in public procurements is exchanged.

During the case investigation, the CC detected, that the infringement is implemented in the period from 2009 to 2014. This bid-rigging agreement has distorted competition in procurements of capital companies of the Ministry of Culture and authorities of Latvian cities, regional municipalities and their cultural authorities all around Latvia.

In addition to the company that reported to the CC, another nine merchants were involved in the prohibited agreement – SIA “SGS Sistēmas”, SIA “Diogens Audio”, SIA “Kompānija NA”, SIA “PRO 1 STAGE”, SIA “AJV grupa”, SIA “Audio AE”, SIA “3S”, SIA “SGM” and SIA “SOLAVI”.

These companies have implemented the infringement mainly in two ways – calling other competitors not to submit their tenders and calling to coordinate their tenders in order to ensure the necessary number of tenderers in the procurement and winning by the relevant company. Therefore, competition did not exist among these companies and organizers of procurements were misled, receiving tenders, which were not prepared under conditions of true competition.

The company that used the opportunity granted by the leniency programme and was the first to report to the CC on the prohibited agreement, was granted full exemption from the fine and the one-year prohibition to participate in public procurements. In its turn, taking into consideration that SIA “Diogens audio” cooperated with the CC in the process of investigation and provided information on its own initiative, the CC decided to reduce the imposed fine. Whereas an agreement was concluded by the authority with SIA “SOLAVI” and SIA “SGM”, which stipulates a commitment by the companies not to appeal the decision of CC in the part of the detected infringement and receive reduction of the imposed fine.

In total, the CC imposed the following amount of fines on the companies for competition distortion in public procurements: SIA “SGS Sistēmas” – 46,342 euros, SIA “Diogens Audio” – 13,709 euros, SIA “Kompānija NA” – 185,931 euros, SIA “PRO 1 STAGE” – 40,283 euros, SIA “AJV grupa” 9,995 euros, SIA “Audio AE” 36,716 euros, SIA “3S” – 12,749 euros, SIA “SGM” – 8,039 euros and SIA “SOLAVI” – 19,319 euros.