In 2024, by further developing the knowledge and competences of the employees of the Competition Council, raising the level of awareness of market participants and others, as well as improving the operational processes and technical and technological capacity of the institution, the institution’s ability to detect and prevent distortions of competition – involvement of undertakings in cartels, misuse of dominant position and unfair trade practices, as well as distortions of competition caused by state and local governments that hinder the healthy development of the market, from which every market participant and consumer could benefit – will be strengthened.
2024 is the first full year of implementation of the Competition Council’s strategy (2023 – 2029). The Competition Council has defined three priorities to achieve its overarching objective:
- The team is professional, committed and development-oriented;
- Result-oriented day-to-day operations and cooperation, ensuring the detection of significant impediments to competition and the promotion of competition;
- An innovative and sustainable working environment.
In line with these three lines of action, the Competition Council has set several priority tasks for 2024.
- Strengthening of fair competition in public procurement
According to the 2022 public opinion survey and the practice of the Competition Council, the most important problem for the competitive environment in Latvia is prohibited agreements in public procurement. Therefore, in 2024, the Competition Council will target the most serious infringements of competition law in public procurement in various sectors with a significant impact on the national economy.
In 2024, the Competition Council will also devote significant human resources to preventing distortions of competition in public procurement, e.g. by preventing collusion between undertakings and by monitoring public procurers, educating them on both the possible signs of an infringement and on competition neutrality issues so as not to unduly restrict competition in procurement. The Competition Council will support contracting authorities by providing opinions and advice on possible infringements in tenderers’ offers. If a contracting authority suspects that tenderers have colluded, it has the right to consult the Competition Council and obtain an opinion within 10 working days on possible indications of an infringement. If the suspicion of unfair conduct by market participants in procurement is confirmed, the contracting authority will be able to exclude the tenderer from participation in the procurement in question, thus avoiding the negative consequences of collusion at an early stage.
In cooperation with the Ministry of Economics, the most effective solutions will be sought so that public procuring entities that have been victims of competition law infringements can receive methodological support in recovering damages. Thus, amendments to the Competition Law are planned for 2024 to enable the Competition Council to support public procurers in identifying, assessing and calculating damages.
- Achieving more effective competition between market players in markets of public interest
The Competition Council will complete its ongoing market surveillances and plans to carry out an in-depth market investigations and preventive measures, including in food retail, waste, healthcare, accommodation, heating, to improve the competitive environment and increase public welfare. Proposals to policy makers to remove unjustified barriers, restrictions to competition and to promote a more competitive business environment and restrict unfair trade practices in the in-depth studied areas will be prepared, and preventive measures and amendments to laws and regulations to remove restrictions to competition and to enable consumers to buy goods and services offered under fair competition conditions will be implemented.
To ensure the development and monitoring of a fair and equal competitive environment in cases of anti-competitive behaviour by non-dominant undertakings with significant market power, proposals for amendments to the Competition Law will be developed and proposed, which would extend the market surveillance powers of the Competition Council over undertakings with significant market power, thereby preventing their negative impact on competition and consumers.
- Improving the regulatory framework for the introduction of new functions
In 2024, the Competition Council also plans to monitor markets that are undergoing rapid development or innovation, such as digital markets.
At the European Union level, new rules for a fair and competitive digital sector were adopted, i.e., the Digital Markets Act. The new rules regulate and restrict the activities of large digital platforms, ensuring fair competition with users and consumers. Given the planned amendments to the Competition Law in 2024 and the powers of the Competition Council to monitor the Digital Markets Act, the Competition Council plans to devote significant resources this year to examining the competitive conditions in this area in cooperation with other EU member States, the OECD and the European Commission, assessing how to further improve the existing regulation and address the restrictive conduct of digital platforms (gateways) and their negative impact on their customers and consumers.
At the EU level, a regulation on foreign subsidies was also adopted in 2022, which aims to ensure fair competition for all undertakings operating in the EU internal market by preventing foreign (third country) subsidies that distort competition in the single market. The foreign subsidies regulation gives the European Commission the power to investigate and prevent distortions of the internal market caused by foreign subsidies and imposes on undertakings notification obligations on foreign subsidies granted to them in certain cases, in particular concentrations of market players and participation in public procurement. The amendments to the Competition Law pending before the Saeima provide that the Competition Council will be the responsible institution in Latvia to assist the European Commission in monitoring the foreign subsidies regulation.
In close cooperation with the Ministry of Economics, further progress is also foreseen on proposals for changes to the regulation on the introduction of personal liability of officials for competition law infringements and exemption of certain vertical agreements from the prohibition of agreements under the Competition Law.
- Improving and modernising internal and external processes to improve the efficiency and quality of the institution’s work
By strengthening the technical and technological IT capacity of the institution to ensure more effective investigation of competition infringements, the implementation of an IT laboratory for processing e-evidence obtained during procedural activities is planned to be completed in 2024, enhancing the knowledge and competence of the employees to use the latest IT technical equipment for more efficient acquisition and processing of electronic evidence.
In 2024, in cooperation with the Ministry of Environmental Protection and Regional Development, the State Regional Development Agency, the Ministry of Economics and other partners, special attention will be paid to the development of an automated cartel screening tool, applying the advantages of artificial intelligence to the detection of infringements. The institution will also continue to devote resources to the implementation of a single e-case to modernise and improve the progress of investigated cases. Thus, in 2024, the Competition Council plans to prepare the procurement for the development of the e-case concept and the specification for the handling of big data.
To strengthen the institution’s economic analysis in competition matters, the post of data scientist / analyst is planned to be added in 2024. To facilitate the submission of merger reports and to promote a customer-oriented service, the tasks planned for 2024 are the launch of a technical solution for the implementation of the merger e-report, the update of the guidelines for the preparation of the merger report, the development of amendments to the rules on the submission and examination of merger reports.
- Developing an effective competition culture in the interest of the Latvian national economy
In 2024, the Competition Council plans to promote competition not only to market players, but also to procurers and other public entities, existing and future competition law practitioners and future undertakings through events, seminars, webinars, and consultations.
At the same time, for minor infringements, market participants will be warned and educated through the Consult First principle. Inviting undertakings and public persons to self-assess the appropriateness of their own conduct and to contribute to the prevention of competition infringements, the Competition Council will continue to develop new and improve existing self-assessment tools, including a self-assessment tool on misuse of dominant position.
To learn and exchange best practices of competition law experts in competition monitoring and competition culture building, effective market analysis and investigation tools, the Competition Council will intensify its cooperation with other competition 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.