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Public Bodies involvement into commercial activities is named as the Most Significant Competition Issue



Public bodies’ involvement into commercial activities is named as the most significant competition issue by more than half of respondents of public opinion poll carried out by the Competition Council of Latvia (the CC). Meanwhile, the most frequently detected competition law infringement in Latvia – bid-rigging – ranks in the second place.

The CC carries out public opinion poll every two years since 2012 to assess awareness of competition issues in various social groups and thus the CC can improve its performance as the competition policy enforcer. This year, the CC besides entrepreneurs, associations, law offices also included municipalities as a respondent group.

As the most significant competition concern, 61 % of entrepreneurs and 50 % of associations named involvement into businesses by public bodies – state and municipality undertakings. Meanwhile, 68 % of entrepreneurs indicated that the main issue which should be averted by the CC are competition distortions crated by decisions of public bodies. Such opinion expressed 80 % of associations and 57 % of municipalities.

Currently, public bodies are obligated to consult the CC before they get involved into commercial activities and the CC gives recommending opinion. In order to prevent competition distortions created by public bodies, amendment project to the Competition Law has been drafted.

Furthermore, 73 % of municipalities as the most significant competition issue name bid-rigging cartels. Similar opinion expressed 49 % entrepreneurs and 30 % of associations, ranking bid-rigging in the second place.

When assessing the most effective influence on the competition situation in markets carried out by the CC, 62 % entrepreneurs mentioned decision on competition infringements, while 59 % named fines imposed by these decisions. At the same time, 59 % of respondents expressed that amount of fines imposed by the CC are proportionate.

Concerning the Leniency Programme, 76 % respondents admitted that they have not information on opportunities to report a cartel and thus receive exemption from penalties.

Comparing to previous public opinion polls, this year there is a significant increase of the number of respondents believing that the CC’s decisions influence markets positively – 82 %. This year, similarly as previous years, respondents who have faced the CC, most appreciate the fact that the CC is easy to communicate with and employees of the CC are responsive. In 2016, entrepreneurs more often has given the higher ranking to aspect that "Employees of the CC listen to and take into account the views of entrepreneurs."

Similarly to the previous public opinion polls, this year respondents have named energy, construction, medicine, finances and insurances as the industries which the CC should pay more attention to.

The Chairwoman of the CC says: “Lessons learned from the public opinion poll are significant not only to the Competition Council of Latvia, so that it is able to plan and prioritize its operation in accordance to public interests more effectively, but also it provides a valuable insight into the societies view on competition issues. Therefore, the results of the public opinion poll should be taken into account by everyone who cares for economic growth and competitiveness of Latvia.”

The CC express its gratitude to all the respondents who participated in the research – 287 Latvian undertakings, 30 associations of different industries, 53 municipalities and 25 law offices.

Research on behalf of the CC was carried out by the research provider Factum from 1 September to 7 October, 2016.

Public opinion poll (Research available in Latvian)

 

For media inquiries

Mr Toms Noviks
Head of Communication Unit of the
Competition Council of Latvia
Phone +371 67365210 
E-mail: toms.noviks@kp.gov.lv