On June 26, the Government supported the amendments to the Competition Law, which provides for efficient powers to the Competition Council (the CC) to take actions against distortion of competition caused by public administrative bodies - the State and local governments.

The amendments to the Law are necessary because one of the business environment problems in Latvia is non-compliance with the competition neutrality principle in conducts of public administrative bodies, which manifest as undue advantage to capital companies of public administrative bodies.

This is confirmed by the results of business survey conducted by the Competition Council in 2017 – almost 64 % of respondents have admitted that competition restrictions caused by public administrative bodies are a topical problem of the industry. Also, the OECD has recommended to grant the CC the power to take actions against such conducts of public administrative bodies.

The amendments to the Law drawn up by the Ministry of Economics provide for the following: in order to avert competition restrictions by public administrative bodies, the CC shall negotiate with the specific authority or capital company but, if the competence restriction cannot be averted through negotiations, the CC shall be entitled to adopt a decision, which imposes to the capital company a legal obligation to terminate the competition impediment.

The Ministry of Economics submitted the amendments to the Law to the Government in 2016 already. The discussions and reconciliation process were time-consuming due to the lobby of local governments – the Latvian Association of Large Cities and the Latvian Association of Local and Regional Governments was against the referred to amendments.

The amendments to the Competition Law have yet to be approved by the Parliament.