Priority tasks of the Competition Council in 2020
Having assessed the trends and challenges detected in sectoral and entrepreneurship environment during the previous 3-year (2017 - 2019) strategic cycle, as well as fulfilment of work plans and available resources of the authority, the Competition Council of Latvia (the CC) has formulated two main priorities for the following period:
- the first priority: to make more efficient and modernise competition surveillance and investigation of infringements in sectors significant for the national economy,
- the second priority: to promote high competition culture, raising awareness of public benefits brought by fair competition.
Fulfilment of these priorities should facilitate development of sectors and entrepreneurship under conditions of unimpeded market economy and should create public benefits, available only under conditions of free and strong competition.
Five main tasks are set for the authority according to the said main priorities in 2020.
1. To conduct investigation of the most severe infringements
This refers both to identification of new infringements, and already commenced cases, incl. the broad-scale case regarding alleged prohibited agreements in significant procurements of construction objects, the initiated case on alleged abuse of dominant position on the market of railway freight transport, continuing the case of city waste management or the so-called “Tīrīga”, etc.
In cases of indications of minor infringements, the CC will continue the already successfully established practice and will use other preventive measures – warnings. Such methods of “Consult first” principle are and will be used only in cases, when market participants have come to attention of the CC for the first time and the competition restriction has not caused significant consequences in the market.
2. To implement efficient surveillance of activities of public administrative bodies
On 1 January 2020, amendments to the Competition Law came into force, which prohibit public administrative bodies - the state, local governments and their capital companies – violate the principles of equal competition by groundlessly restricting the possibilities of private entrepreneurs to operate on the market.
By introducing this new legal framework, the CC will have two types of instruments. Firstly, instruments of consultative nature, intensively continuing the informative activities commenced in 2019 - meeting officials of state authorities and local governments, and explaining the principles of ensuring competition neutrality, as well as having discussions on solutions in cases of possible market shortcomings and restrictions. And secondly, instruments of disciplinary nature, if action of public administrative bodies in bad faith will be confirmed on a basis of substantiated complaints, CC will apply full severity of the law to restore conditions of equal competition.
At the same time, the CC will actively monitor the impact of decisions and activities of public administrative bodies on the entrepreneurship environment, assessing regulatory enactments or their planned amendments.
In addition, intense work of provision of consultations and opinions regarding application of Section 88 of the State Administration Structure Law is expected in 2020. This means that, if the state and local governments intend to establish a new capital company, continue their entrepreneurship activity or plan to extend it, the CC has to give its assessment. We remind that such assessment, including from the perspective of the impact on competition, has to be carried out at least once every five years for state and local government capital companies regarding validity of their commercial activity. Majority of these capital companies have carried out their last assessment in late 2015.
3. To participate in improvement of regulatory enactments and markets
Waste management and pharmacy – these will be the priority markets, where involvement of the CC will be required throughout the year in order to prevent competition distortion in the sectoral legal framework, assess draft future regulatory framework or give assessment of the effective regulatory framework, promoting development of competition.
Considering the fact that digital economy plays an increasingly more significant role in development of markets, the CC will analyse the impact of various trade platforms on the competition during surveillance of certain markets.
In 2020, the CC will finish surveillance of financial services, glass packaging management, heat supply services and other markets.
4. To educate, inform, consult
The CC will continue open communication with all groups of society. The opportunities are different: offering to participate in educational seminars “upon request”) (seminars can be applied via phone, e-mail or on the website www.kp.gov.lv), organising meetings with representatives of various sectors, and willingly participating and taking the floor in sectoral forums that concern the problem of the competition law. We invite to use all these opportunities, especially in case of any uncertainties regarding compliance with the principles of fair competition.
5. To strengthen the capacity of the CC
In 2020, Latvian national laws, incl. the Competition Law, shall integrate the so-called ECN+ Directive 2019/01, which determines that all competition authorities of the European Union shall be provided with instruments required for efficient application of the competition law. Already in 2019 the CC commenced the work, preparing the necessary amendments in order to strengthen the powers of the authority. At the same time, the CC expect that real action will finally follow by the responsible state institutions to strengthen the capacity of the authority.
To fulfil the main tasks set for 2020, the CC plans to improve its internal processes, continue development of resource-efficient, socially responsible and active work environment, also starting transition to fully electronic case management, look for possibilities to recruit professional employees, and attract external experts. Conducting of studies and attraction of experts is a particularly topical issues in assessment of most complicated merger notifications, for example, to assess them primarily and as fast and competent as possible, preventing increase of market concentration and overpayment for consumers.
A significant role in the operation of the authority in 2020 will be given to international cooperation, implementing exchange of experience, primarily solving issues topical in the day-to-day work with colleagues from competition authorities of the Baltic states, and actively engaging in international forums and networks.