During the market study the Competition Council (CC) established that the operation of private waste collectors are limited on the market as a result of activities of Jekabpils City Municipal Capital Company SIA Jēkabpils ūdens and thus, possibly, SIA Jēkabpils ūdens may use the advantages in the provision of waste collection services, not being available to private service providers. In order to prevent the infringement of neutrality in competition the CC has initiated the negotiation procedure with SIA Jēkabpils ūdens.
The CC commenced the market study on the possible infringement of neutrality in competition in the activities of public administrative bodies, based on the complaint received about the draft contract prepared by Jekabpils City Municipal Capital Company SIA Jēkabpils ūdens that the waste collector needs to conclude, in order it would be able to register in the register of waste collection service providers maintained by the municipality and to deliver the collected waste waters to the waste water treatment plants of the town. The draft contract provided that the price for waste waters acceptance is twice a higher as in the previous contract, the validity period of which has expired, besides the waste collector may deliver to the waste waters treatment plants, being in the possession of SIA Jēkabpils ūdens, only those waste waters, which were collected from decentralized sewerage systems in the territory of Jekabpils town. Meanwhile, the capital company SIA Jēkabpils ūdens itself delivers to the treatment plant the waste waters, which are collected also outside the municipal territory.
Besides, it was determined in the draft contract that a private waste collector should submit a report to SIA Jēkabpils ūdens, which is the keeper of the register of decentralized sewerage system, about the volume of collected waste waters and addresses of provision of services every month, as well as each time, when delivering waste waters, a print-out from the global positioning control system (GPS) should be submitted. At the same time, the Cabinet Regulation stipulate that a waste collector shall have an obligation to submit to the keeper of the register the information about the volume of waste waters and deposition once per year until 1 March, in turn, the binding municipal regulation stipulate the obligation to provide such data once per quarter, therefore, the monthly report included in the draft contract is disproportional.
According to the opinion of the CC, for the municipal capital company, which not only maintains the register, but also provides the waste collection services, regularly obtained data of possible competitors about customers may cause unreasonable advantage, for example, the information of the register may be used for acquisition of new customers. Therefore, the CC recommends the register to be maintained by the municipality itself or delegate to supervise it by the person, which is not at the same time the waster collection service provider.
Negotiations with the municipal capital company are commenced in order to eliminate the risk of infringement of neutrality in competition. Already during the investigation SIA Jēkabpils ūdens reviewed and reduced the price for acceptance of waste waters, as well as changed the practice of operations and offered a possibility for private merchants to enter into a contract on waste waters collected, which are collected also outside the boundaries of the town.
Within the framework of negotiations, SIA Jēkabpils ūdens has already showed the readiness to eliminate the possible infringements of neutrality in competition. The CC will be able to decide on termination of further investigation, when SIA Jēkabpils ūdens will submit to the CC for review a clarified draft contract as well as will confirm that it is publicly available to all interested waste collection service providers.
Regardless of the change in the way of acting of the capital company SIA Jēkabpils ūdens, upon accepting waste waters collected outside of the territory of the town, the territorial restrictions included in the initial draft contract arise from the binding municipal regulations, providing to deliver the waste waters from decentralised sewerage systems, collected within the administrative territory of the municipality, right to the waste waters treatments plants of the particular municipality. The CC presumes that the set territorial restrictions would not be in force as of implementation of the administrative territorial reform and establishment of Jekabpils region. However, in case it will be established after the implementation of the administrative territorial reform that such territorial restrictions will continue to unreasonable restrict competition not only in Jekabpils, but also other municipalities, the CC will resume the investigation of the issue, including by commencing discussions with the Ministry of Environmental Protection and Regional Development (VARAM) about the regulation covered by regulatory enactments, inviting the VARAM to facilitate establishment of a common understanding of the normative regulation with regard to inclusion of such kind of territorial restrictions in the binding municipal regulations.
Public administrative bodies - state and municipal authorities as well as capital companies owned by them - are prohibited from hindering, restricting or distorting competition. The prohibition comes into force as of 1 January 2020 and is stipulated in Section 14.1 of the Competition Law.
In order to ensure compliance with the requirements of law, the Competition Council shall negotiate with the public administrative bodies of a capital company owned by it. In case of failure to achieve compliance with requirements of law during negotiations, ensuring beneficial result for competition, the Competition Council may continue investigation of the infringement case with regard to the capital companies owned by public administrative bodies, adopting a decision regarding establishment of infringement, imposing the legal obligation and a fie.
A fine in the amount of up to 3% from the net turnover of the last financial year, but not below 250 euros, may be imposed on the capital company, owned by a public administrative bodies.