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The CC warns the security sector about the high bid-rigging risk



In this year, the Competition Council of Latvia (the CC) has warned five security companies for alleged prohibited agreements in public procurements. To reduce bid-rigging risk in the future, the CC in cooperation with the Procurement Monitoring Bureau (PMB) in a seminar has also educated representatives of security companies, including from two associations of the sector.

The security sector has been noticed by the CC several times due to alleged non-conformities of activities of security companies with the competition principles. Since 2013, the authority has detected two bid-rigging agreements, imposing fines in total of almost 92 thousand euros on eight security companies.

Considering market signals, including anonymous and official applications, the CC sent informative notices to security companies early in the year, at the same time drawing attention to the possibility of using the Leniency Programme. Additionally, this year, the CC had warned fine companies of the sector for alleged coordination of their activities.

To draw attention of market participants to the bid-rigging problem in procurements in the sector and compliance with competition principles, on 13 April representatives of the CC and the PMB educated companies of the sector, incl., members of the Association of Security Companies and the Latvian Security Business Association. At the same time, the CC acquainted participants with benefits and application principles of the Leniency Programme.

The CC informs, that during the first quarter of the year the authority warned 27 companies for alleged bid-rigging, which is the most widespread infringement of the Competition Law in Latvia. By doing so, the authority prevented non-conformities to fair competition principles through an alternative way instead of initiating three formal infringement cases. It has to be emphasized, that six of these warned companies were related to training of vehicle driver's, and 13 companies – to provision of funeral services.

The CC warns companies without formal case investigation in the instances, when the alleged prohibited agreement is relatively small, the company commits not to repeat such an infringement, and when resources of the authority, which are required for the case investigation, may exceed the public benefit.