The judgement adopted by the Constitutional Court on 22 December recognizes the current degree of administrative court review regarding fines imposed by the Competition Council of Latvia as compatible to the Satversme (the Constitution) and rights to fair trial. It means that also in the future when reviewing a fining decision by the Competition Council the court will not be able to change the amount of the fine by setting the fine itself or increasing it.

The case was initiated by the Constitutional Court based on two applications by the Administrative Regional Court contesting the legal provision stating that in cases provided only by law a court may amend an administrative act and determine specific content thereof. The applicant held that neither Competition law or any other legal provision of competition law directly provides for the rights of administrative court to amend the decision adopted by the Competition Council. Therefore the contested provision restricts the jurisdiction of the administrative court and prohibits from ensuring a person’s right to fair trial.

The Constitutional Court, upon evaluating the compliance of the contested provision with the Constitution, referred to the principle of separation of powers between the executive power and judicial power. According to this principle the initiation of the administrative case and issuing the administrative act or decision shall be under the competence of the Competition Council, whereas decision on the legality of the act shall be under the competence of a court.

Besides, the court also emphasized that the use of discretionary powers is more suitable in administrative proceeding by the authority rather than in administrative proceedings of a court. Namely, the authority may obtain more information and consider broader context rather than a court in order to apply the necessary legal obligations and a fine appropriate for the established factual circumstances. Also the case law of the European Court of Human Rights states that the decisions by authorities shall be respected as the decision-making process often requires a measure of professional knowledge or experience and the exercise of administrative discretion pursuant to wider policy aims.

At the same time the Constitutional Court indicates that, in accordance with the European Convention of Human Rights, it is not the role of the Convention to give access to a level of jurisdiction which can substitute its opinion for that of the administrative authorities. In  the particular case it means that a court doesn’t necessarily need a jurisdiction in competition cases to set the fine itself or increase it for such a court review to be compatible with the Constitution or the rights to fair trial. Court shall have the right to decide on the key issues of the dispute and, if necessary, to forward the case for reassessment to the same or other authority.

Māris Spička, Executive Director of the CC: “The judgement of the Constitutional Court and considerations set forth in there are significant for further work of the Competition Council. Upon confirming that the Competition Council is the only authority entitled to decide on the appropriate amount of a fine in case of infringement of competition law, is a significant step for united, balanced and effective competition policy.”