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Competition Authority fines 11 Tenderers of Logging Procurement



On 14 July, the Competition Council (CC) of Latvia took a decision to fine 11 undertakings for coordinating their tenders with one or several other tenderer in a public procurement of timber preparation. For such actions, the fine was imposed in the total amount of EUR 70 003.44.

The prohibited information exchange was carried out by 11 participants of the procurement of timber preparation and transportation to the road in damaged tree felling. The procurement was organized in 2014 by the state owned forest property and management company AS “Latvijas valsts meži”. Information on participation in the procurement was exchanged by following undertakings in four distinct groups: (1) SIA “Amils” with  SIA “Oga G”; (2) SIA “RT Kadiķi” with SIA “AN Priede”; (3) SIA “Eko burkāns” with SIA “Davos”, SIA “Riveros”, and SIA “Consultation Office”; (4) SIA “Roluks” with SIA “LK Forest” and IK “LUUX”.

If undertakings replace genuine competition with imitation of the competition, organizer is deceived about the real market situation, as well as does not receive benefits which are usually provided by the true rivalry of market participants. Due to both exchange of information about participation in procurement and terms of this participation, genuine competition between undertakings is impossible. Therefore, such actions are to be considered as cartel agreement, which is a severe competition law infringement.

During the investigation, SIA “Consultation Office”, SIA “Davos”, SIA “Eko burkāns” and SIA “Riveros” pleaded guilty under Leniency program, as well as disclosed implementation process of the prohibited agreement. Accordingly, the calculated fine to the first undertaking that turned to the CC – SIA “Consultation Office” – was reduced by 50%, while for SIA “Davos”, SIA “Eko burkāns” and SIA “Riveros” – reduced by 25%. Furthermore, mentioned undertakings will be exempted for a one year long exclusion form public procurements.

Slight reduction of the fine was applied also to SIA “Oga G”, SIA “Amils”, SIA “RT Kadiķi”, SIA “AN Priede”, SIA “Roluks”, SIA “LK Forest” and IK “LUUX”. During the investigation, these undertakings cooperated with the CC, immediately proved explanations and freely disclosed actual circumstances of the infringement. Fines for competition law infringements are calculated as a percentage of the net turnover of undertaking’s latest financial year. Thus, the calculated fines of the very undertakings were reduced by 0.5 percentage points.  

SIA “Roluks” was imposed with a fine of EUR 20 105.98, SIA “Oga G” – EUR 14 599.60, SIA “RT Kadiķi” – EUR 14 275.46, SIA “Amils” –  EUR 1 030,82, SIA “AN Priede” – EUR 8 865.20, SIA “Eko burkāns” – EUR 2 169.75, SIA “Davos” – EUR 700, SIA “Riveros” – EUR 1 193.36, SIA “Consultation Office” – EUR 2 316.62, SIA “LK Forest” – EUR 2 884.28, and IK “LUUX” – EUR 1 862.37.