The Competition Council (the CC) has developed guidelines for market participants, in particular for those who merge into general partnerships and agree to joint bidding. The purpose of the guidelines is to inform market participants about the circumstances that need to be observed when preparing a joint bid, to ensure that the joint cooperation does not lead to an infringement of the Competition Law.
In circumstances where market participants are unable to participate individually, the joint bids increase the participation in procurements for which market participants would otherwise not be able to qualify. Such cooperation between companies by submitting a joint bid does not constitute an infringement of the Competition Law, as they are not considered to be competitors in the specific procurement. However, where companies form associations of persons, even though each is capable of performing the contractual obligations of the procurement economically, financially and technically independently, there are risks of an infringement of the Competition Law.
Ieva Šmite, Director of the Prohibited Agreements Department of the CC: “When assessing the investigation cases of infringements of prohibited agreements over the last five years, we have observed a trend that market participants often use joint bidding not for objective reasons, but on the contrary – as a cover for a cartel. Therefore, the aim of the CC in these guidelines is to provide clarity on the assessment that market participants need to make for the cooperation between competitors to be justified by eliminating competition between them in a given procurement.”
The guidelines explain the basic principles that all market participants should take into account when considering submitting a joint bid. The guidelines provide information allowing market participants to determine whether they are to be considered as competitors in a given procurement and what is the permissible extent of information exchange. In addition, the document contains Latvian and foreign competition authorities’ and judicial practices to give an insight into how such issues have been dealt with in practice.
The self-assessment tool at the end of the guidelines is designed to help a market participant to decide in a convenient way on the most appropriate form of participation in a procurement, either individually or by joining with another market participant and submitting a joint bid.