On 22.12.2025., the Senate of the Supreme Court of the Republic of Latvia adopted a decision refusing to initiate cassation proceedings in the case concerning the Competition Council (CC) decision of 07.08.2014, which found an infringement of the Competition Law by AS “KIA Auto” (KIA) and its parent company AS “Tallinna Kaubamaja”. As a result, a joint and several fine in the amount of EUR 134,514.43 was imposed on both companies. Consequently, litigation lasting more than 11 years has been concluded, and the CC decision has become final. The decision concluded that, during the warranty period, KIA unjustifiably required its customers to carry out technical maintenance exclusively at KIA-authorised representatives and to use only original spare parts.
The Senate’s decision is significant for the practice of competition law enforcement, as it confirms the interpretation of the Competition Law provided by the CC and brings clarity regarding vehicle maintenance and repair during the warranty period.
The CC emphasises that the findings set out in the CC decision are applicable to any official car dealer or distributor, providing that competition must not be unjustifiably restricted even during the vehicle warranty period, ensuring consumers greater freedom of choice and lower service costs.
By a decision adopted at a Senate preparatory hearing, it was refused to initiate cassation proceedings brought by KIA against the judgment of the Administrative Regional Court of 04.06.2025., by which the applications submitted by KIA and TKM Grupp AS seeking the annulment of the CC decision were dismissed.
The Senate recognised that the Administrative Regional Court had correctly assessed the CC’s conclusions regarding a prohibited vertical agreement within the KIA network. The Court indicated that the agreement on warranty conditions, which provided that, during the warranty period, vehicle maintenance had to be carried out only by KIA-authorised representatives and that only original spare parts had to be used, resulted in higher repair costs for vehicle owners. This hindered competition both in the market for repair and maintenance services and in the spare parts distribution market. In the view of the Senate, the circumstances established by the Regional Court indicated a sufficiently significant impact on competition.
Accordingly, the Court recognised as prohibited a practice whereby vehicle owners are required, in order to retain the manufacturer’s and/or importer’s warranty, to carry out all regular maintenance during the warranty period exclusively at service centres authorised by the respective manufacturer/importer (rather than at independent repairers), and to use only original spare parts (rather than equivalent-quality alternative spare parts). Such warranty conditions restrict competition by excluding independent repairers from the market, hindering access to the market for distributors of alternative spare parts, and depriving consumers of the ability to freely choose service providers and spare parts based on the price–quality ratio, thereby reducing competitive pressure on prices.
The Senate also rejected objections regarding the application of joint and several liability to KIA’s parent company. The Court indicated that, taking into account the 100% shareholding (including indirect ownership), the CC had sufficient grounds to recognise the decisive influence of the parent company over the conduct of the subsidiary.
Given that the arguments raised in the cassation complaint did not give rise to doubts for the Senate as to the lawfulness of the judgment of the Regional Court, and that the case is not significant for the development of case-law, the Senate refused to initiate cassation proceedings. Consequently, the CC decision of 2014 is final and has entered into force. The Senate’s decision is not subject to appeal.
On 07.08.2014., the CC adopted a decision finding that KIA had infringed the Competition Law by unjustifiably restricting, for more than 10 years, vehicle owners’ ability during the warranty period to carry out repairs and maintenance at independent service centres and to install spare parts manufactured by other producers.