In the late 2013, the Competition Council (CC) of the Republic of Latvia took a decision to fine SIA „Transporta telemātikas sistēmas”, the operator of the national database of public transportation, for abusing its monopoly and delaying market entry of competing ticket cash registers.
SIA „Transporta telemātikas sistēmas” hindered competition between enterprises that develop, sell and service ticket cash registers and telematics equipment for public transport.Having sole control of the access to the national database, the company gained competition advantages in the market. As a result of the infringement, the expenses of the intercity public bus transport operators were increased, and thus also the subsidies from the state budget, as the state covers the intercity public bus transport operators’ losses.
SIA „Transporta telemātikas sistēmas” has developed and operates the database of the Road Transport Administration, storing and tracking information on the operation of local and intercity bus operators. All bus operators are obliged to use ticket cash registers and telematics equipment, compatible with the database.
Putting in use the knowledge of the database structure and the fact that the Road Transport Administration does not have in-house IT experts, SIA „Transporta telemātikas sistēmas” did not provide competing suppliers with the technical information, necessary to programme and make compatible their telematics equipment with the national database. Thereby, opportunities for competitors to operate in the market of distribution of telematics equipment were foreclosed; hence, SIA „Transporta telemātikas sistēmas” was able to hold a monopoly position in this market.
Furthermore, SIA „Transporta telemātikas sistēmas” conduct delayed distribution of a next generation cash registers that would be compatible with the national database without additional devices. Thus, the incumbent abused its market power, gaining an advantage to develop and sell its own new generation cash register.
SIA „Transporta telemātikas sistēmas” illegal conduct raised strategic barriers to entry for new market participants on the market of distribution of telematics and cash registers. This decreased competition pressure to innovate and lower prices. The state has suffered losses, as well, as it covers the increased losses of the intercity public bus transport operators.
The investigation of the case was started after SIA „Nordeka serviss” complaint, which claimed that conduct of SIA „Transporta telemātikas sistēmas” has considerably weakened SIA „Nordeka serviss” opportunities to successfully operate in the distribution of the next generation ticket cash registers.
The infringement took place from September 2009 to August 2012, and the CC imposed SIA „Transporta telemātikas sistēmas” a fine in the amount of 2275 € or 1,6 per cent of its net turnover for the year 2012.
In the meantime the Road Transport Administration has procured a uniform data exchange gateway, which will allow access to the national database to all suppliers of cash registers and telematics systems.