The Competition Council (the CC) has summarized the results for 2022 and calculated that the average public benefit from the implementation of competition policy in Latvia in the period 2020-2022 exceeds EUR 51.5 million per year. Taking into account the budget of the institution during this period, each euro allocated to the institution generates on average a public benefit of €26.73.
To calculate the public benefit, the CC relies on the methodology recommended by the Organisation for Economic Co-operation and Development (OECD), adapted to the specific features of the Latvian economy and supplemented by the recommendations of the European Commission and the practical findings of other highly-regarded competition authorities of the Member States of the European Union.
The public benefit calculation assessed the decisions taken by the Authority in the period 2020-2022, assessing the immediate benefits to the affected undertakings and consumers from the CC's actions in the public interest in preventing cartels and abuse of dominance. At the same time, the calculation includes merger control, preventing the concentration of market power to the detriment of undertakings, and the Authority's preventive actions, i.e. warnings and negotiation procedures with undertakings that have committed minor infringements of cartels or abuses of dominant positions. Fines imposed by the CC and paid by undertakings are not included in the calculation, as their primary purpose is to deter undertakings from committing similar infringements in the future.
In 2022, not only the markedly increased willingness of market players to merge, strengthening their market positions, but also the significant preventive work of the CC in alerting market players and conducting negotiation procedures, made an important contribution to the public benefit. In cases of less significant potential infringements, 11 preventive actions were implemented, alerting a total of 16 legal entities to potential infringements of the Competition Law, thus implementing the "Consult First" principle.
J. Gaiķis, the chairman of the CC: "Neither the number of infringement cases initiated nor the fines imposed, which act as a preventive tool, show the effectiveness of the Authority's activities as clearly as the public benefits from the activities of the Competition Council. Over the three-year strategic period, this has significantly exceeded previous expectations, amounting to more than €51.5 million per year. It is a pleasure to know and to be reminded once again that the work we do carries responsibility to the whole Latvian society."
In order to reduce the variability of the public benefit indicator resulting from the different number and amount of infringements detected each year, the public benefit is calculated as a three-year average. The three-year period analyzed coincides with the period of the CC's operational strategy.