By its 14 May decision not to initiate cassation proceedings, the Supreme Court upheld the decision of the Competition Council (CC) by which in 2018 the institution established a prohibited agreement between Ltd. “LIMBAŽU MELIO”, Ltd. “Bauskas meliorācija” and Ltd. “MELIORĀCIJAS EKSPERTS” in project procurements of the administered fund. Thus, the decision of the CC has entered into force, and companies must pay a fine in the amount of more than 70,000 euros to the state budget for the violation of competition law.
In the 2018 decision of the CC, it was established that three amelioration system builders – Ltd. “LIMBAŽU MELIO”, Ltd. “Bauskas meliorācija” and Ltd. “Meliorācijas eksperts” – they had prohibited agreements in four price inquiries from 2015 to 2016 by electronically exchanging the respective price estimates to be submitted to the survey and agreed on actions for the specific company to win the tenders. As a result, there was no competition between the companies and bids were made that did not occur in conditions of genuine competition.
Although companies interpret concerted action and communication on procurement as a mandatory requirement from the organizers side for to provide a certain number of offers in price inquiries. The Court recognized the desire to increase the number of tenders in a given procurement does not justify the exchange of information restricting or even excluding competition in procurement, including by reducing the likelihood that a genuinely competitive market participant will submit a proposal. The requirement to submit more than one tender is directly aimed at promoting competition and cannot justify submitting coordinated offers. Thus, any exchange of information between potential competitors as to whether and at what prices they intend to participate in certain procurements is inherently aimed at restricting competition, which the Competition Law prohibits.
Chairman of the CC Juris Gaiķis: “While investigating the specific infringement, the Competition Council established that the victory of certain companies in procurement was achieved not only by violating the competition norms. For instance, several significant discrepancies were identified in relation to the activities carried out by the project managers involved in the specific support program, whose task was to professionally organize procurements following the legislation. Many projects were organized by only two project managers, whose actions in price inquiries artificially contributed to the victory of certain companies. However, companies need to remember that, regardless of the activities of the project managers or any other external circumstances, the responsibility for the infringement lies with the companies themselves that have participated in the cartel.
Director of the CC’s Legal Department, Valentīns Hitrovs: “The Senate's decision is significant, among other things. It clarifies the division of responsibilities between the institution and the court, ensuring that the participants in the administrative process become acquainted with the competition case materials. Complete and timely access to the file is an essential component of the rights of the defence, especially in competition cases, which are usually complex in terms of both evidence and economic and legal assessment. The findings made in the Senate's decision will be useful for market participants, as they address the practical aspects of the exercise of the rights of defence. ”
For cases of infringement the CC imposed a fine on Ltd. “LIMBAŽU MELIO” in the amount of 15,702 euros, Ltd. “Bauskas meliorācija” - in the amount of 28,376 euros and Ltd. “Meliorācijas eksperts” - in the amount of 26,399 euros.