On June 7, the Senate of the Republic of Latvia, while considering the side complaint of the Competition Council (the CC) regarding the decision of the Administrative District Court of March 23, 2022, approved the arguments of the CC regarding the need to ensure special legal protection for the settlement offer submitted by the market participant to the CC and the communication that took place within the framework of the Leniency Program.

One of the so-called participants of the "Builders' cartel" case requested the CC the copy of the settlement concluded between the CC and another market participant. The CC provided information about the settlement included in the decision, however, the company went to the court. In addition to the subject of the applicant's application - the issuance of a settlement - the Administrative District Court in the case also wanted to request a market participants’ settlement offer.

Examining the CC's complaint, the Senate established that in competition cases the cooperation of market participants with the competition authority (communication both within the Leniency Program and communication about possible settlements) is usually evaluated, and it includes voluntary admission of facts and violation by the violator or self-incriminating testimony. Such admissions may expose companies that cooperate with the authority to civil or criminal liability and companies be placed in a worse position than co-infringers who do not cooperate with the competition authority.

The Senate concluded that, in order to ensure the willingness of companies to voluntarily cooperate with the competition authority within the framework of the Leniency Program and settlement, the testimony given by the market participants cannot be subject to the request for evidence. Analysing the terms of the Damages Directive, the Senate concluded that it is the communications and settlement offers within the Leniency Program that have the greatest legal protection. Therefore, such communication is excluded from the range of information that could be made available to other persons.

The Senate explained that the issuance of the testimony would affect the effective application of competition law - the institution's ability to effectively implement the Leniency Program, detect and investigate violations of competition law. On the other hand, a person who has given self-incriminating testimony, after handing over this testimony to another person, there is a risk of being in a worse position, because he has to start protecting himself against the use of such information.

Valentīns Hitrovs the Director of the Legal Department of the CC: "In the decision, the Senate drew attention to the aspects of the effective application of competition law, confirming that the Leniency Program and the settlement procedure are important tools in the effective detection of the most serious violations and the prosecution of market participants. The Senate's decision creates legal certainty about the settlement offer and the special legal protection of the communication that took place within the framework of the Leniency Program, preventing the risk of its being sued. Therefore, the decision of the Senate will positively affect the motivation of market participants to cooperate with the CC and reveal their participation in the violation within the framework of the Leniency Program, as well as avoid complex legal proceedings if the market participant chooses to enter into a settlement with the institution."

More information about the CC’s Leniency Program, which specifies what to do if a market participant has information about a violation and wants to take advantage of the Leniency Program, can be found here: https://www.kp.gov.lv/en/leniency-programme.

Anyone who has information about possible violations of the Competition Law can report to the Competition Council by writing a submission or using the anonymous reporting form on the website: https://www.kp.gov.lv/en/reporting-violation.