2022 is the last year of the Competition Council's three-year (2020-2022) operational strategy. One of the priorities for this year will be to develop a new operational strategy as an independent body. This year, the Competition Council will continue to operate in three main directions defined so far:
- Detection and prevention of significant distortions of competition and market distortions, as well as prevention of adverse effects of market concentration.
- Strengthen and grow the capacity of the Competition Council.
- Promote awareness of free and fair competition among market participants and public administrative bodies, developing competition policy and culture at the national and international levels.
In accordance with the directions of activity mentioned in the strategy, the Competition Council has set several important tasks for 2022.
Detection and correction of significant competition infringements
According to the results of the Competition Council's practice and public opinion survey – in Latvia, there are two significant competition issues: prohibited agreements and distortions of competition caused by the state and local governments or public administrative bodies, which often manifest themselves in the creation of unequal conditions of competition, discrimination, or exclusion of undertakings from the market.
The Competition Council will ruthlessly address the most serious violations of competition law in public procurement in various sectors with a large impact on the economy, including the continuation of case investigations already started in 2021.
The Authority will also devote significant resources to the supervision of public administrative bodies, which has been particularly relevant to the Competition Council's agenda since 2020, when amendments to the Competition Law entered into force, giving the Authority stronger powers to address distortions of competition caused by public administrative bodies. In order to prevent violations of competition neutrality, it is important to ensure immediate changes in the behaviour of a public administrative body, which also provides immediate benefits to the society therefore, the Competition Council intends to use negotiation procedures as the most effective tool for preventing possible violations. At the same time, however, in 2022, the Competition Council will not refrain from imposing fines in cases if public administrative bodies do not want to change behaviour that distorts fair competition. Furthermore, for advisory purposes, the Competition Council has initiated and will continue to compile sectoral summaries, based on analysis of public administrative bodies involvement in various markets, for example, in the fields of health, public transport, housing management, etc. areas.
To identify barriers to free and fair competition in a timely manner, the Competition Council intends to focus on sectors with a significant impact on the economy and markets with rapid development or innovation. Among other things, the Authority will pay attention to the conditions of competition in the field of trade, considering the obligation to monitor the new Prohibition of Unfair Trading Practices Law and the need to educate market participants in the food supply chain. Attention will also be paid to insurance and financial markets, considering past supervision and signals from market participants and industry supervisors. The Competition Council will also focus on digital platforms and their impact on their customers and competitors.
In markets that are not functioning effectively, the Competition Council will monitor and address abuses of market power by dominant companies and prevent concentrations in markets that are harmful to competition. The institution will also participate in the identification and elimination of unjustified restrictions on competition in laws and other regulatory enactments and in the process of improving the regulatory framework of competition law. It will remain relevant to assess the business restrictions and support mechanisms imposed by state to reduce the spread of the Covid-19, providing an opinion on unjustified business restrictions imposed by the state.
Strengthening the Competition Council as an independent institution
In order to ensure the detection of possible infringements and the promotion of competition in all sectors of the national economy as efficiently and qualitatively as possible, the Competition Council needs to continuously develop and strengthen the capacity of the institution.
In 2022, with the implementation of the so-called "ECN + Directive", which provides the Competition Council with the necessary guarantees of independence, resources and enforcement powers to effectively investigate and prevent antitrust infringements, it is planned to strengthen the institution's capacity to fight the most significant distortions of competition - involvement of entrepreneurs in cartels, abuse of a dominant position, unfair trade practices, as well as distortions of competition caused by the state and local governments, which hinder the development of the economic environment in Latvia.
Amendments to the Competition Law aimed at transposing the provisions of the Directive were approved by the Cabinet of Ministers on 14 December 2021, and the draft law has now been submitted to the Parliament for consideration. The draft law provides for the harmonization of the powers of competition authorities at the level of EU Member States for the effective investigation and detection of antitrust infringements. Among other things, the Authority's status will change to become an independent institution under the supervision of the Cabinet of Ministers, and the amendments will have a positive impact on the institution's investigation processes and decision-making procedure.
One of the most important priorities of the Authority in 2022 is to implement the changes in the legislation in the institution's internal processes and to explain them to the market participants.
Also, in 2022, it is planned to strengthen the information technology capacity of the Authority by establishing an IT laboratory and training staff to use the most modern IT technical equipment for more efficient acquisition and processing of electronic evidence, paying special attention to the development of a digital cartel screening tool. In addition, it is planned to strengthen the institution's capacity for economic analysis, which will provide more in-depth and economically accurate investigations in merger cases, market surveillance and abuse of a dominant position cases, etc., with additional attention to the economic impact assessment of the competition.
Creating an effective competition culture in the interests of the Latvian economy
For entrepreneurs to understand the benefits of fair and free competition and act in good faith, the Competition Council needs to implement extensive communication activities both at the national level and in the international environment.
The Competition Council has defined the education of market participants on fair competition as one of the Authority's main priorities; therefore, in 2022, the Competition Council will continue the active education of market participants by organizing seminars, webinars, and providing consultations. At the same time, in the case of minor infringements, market participants will be warned and educated using the "Consult first" principle rather than being fined with severe fines. Furthermore, the Authority will continue developing tools that encourage businesses and public administrative bodies to control their actions and contribute to the prevention of anti-competitive practices, for example, by developing easy-to-use self-assessment tools, incl. it is planned to start the development of a digital merger notification tool for businesses.
In order to get acquainted with and exchange the experience of the best competition law experts in competition supervision and competition culture, as well as to adopt it in Latvia's practice, in 2022, the Competition Council plans to organize with OECD the workshop for competition experts on Hub and Spoke theme and as well the Baltic Competition Authority Conference.