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The CC fines the companies involved in bid-rigging in price quotations on supply of nanotechnology chemicals



On 12 April, the Competition Council of Latvia (the CC) detected a prohibited agreement implemented by six applicants and supported by the municipal passenger carrier SIA “Rīgas satiksme” on supply of nanotechnology chemicals. The CC imposed a total fine of 2.4 million euros on the organizer SIA “Rīgas satiksme” and the applicant SIA “Sava arhitektūra”.  The other five bid-rigging participants – SIA “RS Baltic”, SIA “Alchimica-Latvia”, SIA “UKT Serviss”, SIA “Vialeks” and SIA “HRM” – have been liquidated, therefore, no fines were imposed on these companies.

The CC initiated case investigation after receipt of information from the Economic Crime Combating Board of the State Police. During the case investigation, the CC detected, that in total six market participants, supported by the organizer, have coordinated their tenders in two price quotations, implemented from 2012 to 2014 with the total contract sum exceeding 800 thousand euros.

The applicants coordinated participation conditions and documentation to be submitted in both price quotations, and also agreed on the planned winner. The CC concluded, that all applicants were aware of their involvement in prohibited activities and the competition imitating nature of such activities.

The information obtained by the CC shows, that the official of the organizer – SIA “Rīgas satiksme” – who was responsible for purchase of the specific product, actively engaged in the preparation and coordination of tenders, and preliminary determination of the winner. The involvement of SIA “Rīgas satiksme” is also confirmed by the fact, that the applicants were mutually informed about participation in price quotations before announcement of these procedures.

The Chairwoman Ms. Skaidrīte Ābrama: “Competition imitation and no management whatsoever – this is how price quotations organised by SIA “Rīgas satiksme” in this already notorious nano-water case can be described. The official appointed by the organizer, and six applicants abundantly wasted money of residents of Riga worth almost one million euros during these bid-rigging transactions. This is very rude and negative conduct not only from the perspective of the competition law, but also in terms of the attitude of the municipal company towards public funds entrusted to it.”

For deliberate competition distortion, the CC imposed a fine of 2 417 000 euros on SIA “Rīgas satiksme” and 700 euros on SIA “Sava arhitektūra”. Since other bid-rigging participants have been liquidated, no fines are imposed on these companies.

This is the second decision adopted by the authority concerning prohibited agreements, involving the municipal company SIA “Rīgas satiksme”. In 2017, the CC imposed a fine of 2.3 million euros on SIA “Rīgas satiksme” and PS “Rīgas mikroautobusu satiksme” for unlawful coordination of fare rates.