2023 is the first year of operation of the Competition Council as an independent authority, strengthening existing resources and developing technological investigative tools to ensure more effective investigations of competition infringements. The Competition Council will continue to work in the three main areas defined so far:
- Detecting and preventing significant restrictions of competition and market distortions, and preventing the adverse effects of market concentration.
- Strengthening and growing the capacity of the Competition Council.
- Promoting awareness of free and fair competition among market players and public authorities, and shaping competition policy and culture at national and international level.
In line with these lines of action, the Competition Council has set a number of priority tasks for 2023.
- Fair competition in public procurement
According to the data of the public opinion poll conducted in 2022 and the practice of the Competition Council, there are two major problems in the field of competition in Latvia: collusion or cartels in procurement and distortions of competition created by public entities or state and local governments, which create unequal conditions of competition, discriminate or exclude entrepreneurs from the market.
In 2023, the Competition Council will pursue the most serious infringements of competition law in public procurement in various sectors with a significant impact on the economy, including by continuing and concluding investigations launched in 2022.
In 2023, the Competition Council will also devote significant resources to preventing distortions of competition in public procurement. On 1 January, amendments to the Public Procurement Law entered into force, obliging the Competition Council to support public procurers in recognizing cartel elements in applications received from tenderers. If the contracting authority suspects that tenderers have colluded and at the same time the contracting authority has consulted the Competition Council and confirmed its suspicions, the tendering authority will be able to take a decision to exclude the tenderer from participation in the specific procurement, thus preventing the negative consequences of collusion at an early stage.
- State and local government involvement in the market and respect for the principle of neutrality
The Competition Council will devote significant resources to the supervision of public entities - state and local governments - which has been on the agenda of the Competition Council since 2020, when amendments to the Competition Law entered into force, giving the Competition Council broader powers to address distortions of competition caused by public entities. The Competition Council will continue to use the negotiation procedure to remedy breaches of neutrality, which ensures an immediate change of behavior and immediate benefits for society. At the same time, the Competition Council will not shy away from imposing fines if public administrative bodies choose not to change behaviour that distorts fair competition.
In order to educate public entities and provide them with recommendations for market conduct, the Competition Council will produce summaries by sector or industry, highlighting the key findings and issues arising from the Authority's opinions on public entities' holdings and involvement in various markets, for example, in 2023 it is planned to produce a summary on public entities' involvement in the building management and waste management sectors.
- Monitoring unfair trading practices, digital markets and other markets with a significant impact on the economy
In 2023, the Competition Council plans to monitor markets with a significant impact on the economy and markets that are experiencing rapid development or innovation, such as digital markets. Last year, the Digital Market Act (DMA) adopted new rules for a fair and competitive digital industry at EU level.The new rules regulate and restrict the activities of large digital platforms, ensuring a fair playing field for users and consumers. The new rules regulate and restrict the activities of large digital platforms, ensuring a level playing field for users and consumers. Already in 2022, the CC devoted significant resources to participating in the European Commission's Digital Market Act Working Group, and systematic cooperation, including exchange of information on potential infringements with the European Commission and national competition authorities, is expected in the period ahead.
At the same time, the Authority will intensify its focus on competition conditions in trade. In 2023, the Authority has established a separate Unfair Trading Practices Prevention Unit, one of the tasks of which will be to actively educate market players about the Prohibition of Unfair Trading Practices Law and to prevent unfair practices in the food supply chain.
- Developing IT capacity for more effective investigation of competition infringements
One of the Authority's objectives is to ensure the application of Directive 2019/1/EU of the European Parliament and of the Council, the so-called "ECN+ Directive", in order to prevent and effectively investigate competition law infringements in the long term.
Strengthening the Authority's IT technical and technological capacity to ensure more effective investigations of competition infringements, the establishment of an IT laboratory for processing e-evidence will be completed in 2023 and staff will be trained to use IT technical equipment for obtaining and processing e-evidence. In 2023, particular attention will be paid to the development of an automated cartel screening tool, taking advantage of artificial intelligence to detect infringements. The Authority will also continue to move towards the introduction of a e-case for easier management of investigated cases, including facilitating the exercise of rights of participation during investigations.
- Creating an effective competition culture in the interests of the Latvian economy
In order to ensure that businesses and public figures understand the benefits of fair and free competition, the Competition Council needs to conduct extensive communication activities both at national level and internationally to encourage fair competition.
The Competition Council has defined the education of market players on fair competition as one of the main priorities of the institution; therefore, in 2023 the Competition Council will continue to actively educate market players by organizing seminars, webinars and consultations.
At the same time, for minor infringements, market players will be warned and educated using the "Consult First" principle. Encouraging entrepreneurs and public administrative bodies to monitor their own behaviour and participate in the prevention of competition infringements, the Competition Council will continue to develop new and improve existing self-assessment tools; among other things, the authority will develop a self-assessment tool on abuse of dominance, and will continue its ongoing work on the development of a digital merger notification submission tool for undertakings that need to obtain merger clearance from the Competition Council.
In order to learn and exchange the best practices of competition law experts in competition monitoring and competition culture building, the Competition Council will intensify its cooperation with other competition monitoring authorities and organisations worldwide, adopting the best practices in Latvia, as well as strengthen cooperation with national competition authorities in detecting and investigating competition restrictions.