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Saeima passes Amendments to the Competition Law



On 12 May, Latvian Parliament – Saeima – adopted in final reading amendments to the Competition Law that significantly modernizes competition protection in Latvia.

Amendments to the Competition Law provides the Competition Council (CC) of Latvia with rights to improve the effectiveness of its operation, prioritising cases and assessing whether an official case investigation or other methods for aversion of possible infringements are the most effective. Thus, the CC will be able to focus its resources primarily to disclosure of infringements that cause the most damage and affect the most part of society.

Amendments to the Competition Law specifies opportunities to the CC to carry out unannounced inspections or dawn raids. Hereafter, if during the dawn raid representatives of the CC obtain information that evidence on the alleged infringement can be found in the possession of other persons, the authority in accordance with urgent procedures will apply to the court, which in two hours will issue a permit to carry out the inspection.

During the case investigation, after the decision by the judge or with a consent of the data subject the CC will be granted with rights to require electronic communications operator to detect and provide data to be retained. Based on the decision of the judge, the CC will be able to request credit institution undisclosable information at its disposal. Investigation activities mentioned above will prevent gathering of evidence.

Amendments provide for presumption that cartels have caused damage and in the result of such violation price has been increased for 10 per cent unless it is proven otherwise. The CC expresses the hope that such provision will promote damage actions, thus, reducing preventively number of cartels.

Furthermore, the amendments expand the number of cases when infringer may apply for an exemption from penalties – a fine and the prohibition for a year to participate in public procurements. Such opportunities will be offered to market participants, which, for example, are first providing the CC with evidence on implementation of other cartel agreement.

Amendments also concern merger control. To ease a preparation process of a merger notification and to approach the international best practice, there have been excluded threshold of 40 per cent market share as a criterion of submitting the merger notification.

In case of a merger of competing undertakings when the transaction does not exceed the notification threshold but may negatively affect the market and consumers, the CC will be entitled to request for a merger notification in accordance of execution of statutory criteria.

Additionally, for an evaluation of merger there will be introduced a fee to be paid into the state budget. The amount of such fee will be determined by regulations of the Cabinet of Ministers, and will be differentiated by the total turnover of merging parties.

For an unnotified merger the CC will be able to impose a fine to a newly established undertaking or the acquirer of a decisive influence up to 3 per cent from the net turnover for the last closed financial year. Thus far, the fine imposed for such infringement was up to EUR 1400 per day until the date of aversion of the violation.

Furthermore, amendments provide for a fine imposed for a failure to provide information during the investigation, a failure to correct the information due deadline, and for a provision of false or misleading information. The fine for such breaches will be set up to 1 per cent from the undertakings’ or associations’ from the net turnover for the last closed financial year, but not less than EUR 50 to each. Persons who are neither market participants nor associations will be imposed with a fine from EUR 50-1400.

Amendments to the Competition Law will enter into the force on 15 June, 2016.

 

For media inquiries

Paula Vilsone

Communications Officer of the

Competition Council of Latvia

E-mail: paula.vilsone@kp.gov.lv

Phone: 00 371 67365210