For any companies operating in the Latvian market, it would be very important that they understand the Latvian competition law and the antitrust laws. That is in place so that they do not end up on the wrong side of the law.  

The following is a comprehensive overview

Competition Law: The main laws of Latvia concerning competition are the laws on competition, which conform to the EU competition legislation with the title of the Competition Law (Konkurences likums). 

Regulatory authority: The Competition Council of Latvia (Konkurences Padome) is the main authority responsible for the legislation and regulation of competitions and the behaviours of markets. 

Some of the crucial provisions of the Act

They consist of:

Prohibition of Anti-competitive agreements

Vertical restraints that refer to contracts between companies that regulate the resale of products are prohibited. This includes:

Price fixing

Cross-sectional collaboration is where sellers or buyers coordinate some form of cartel for instance fixing prices or other trading terms. 

Market sharing

This is a situation where the market or customer is split between two or more competing firms. 

Collusive bidding

Other tender or auction-related work may include coordination of multiple bids. 

Production control

 Concerning decreased production, markets, and technical progress. 

Abuse of dominant position

It is also worth noting that any firm that operates in the market and occupies a dominant position within the market must not misuse such a position to the detriment of its competitors. Abusive practices include:

Unfair pricing

Specifying any buying or selling prices of the inventory. 

Limiting production

Restricting product versions, markets or technology progressiveness only for the sake of it and to the detriment of the consumer. 

 Discriminatory practices

 Enabling the application of other conditions to similar transactions will put certain of the competitors in the market at a disadvantage. 

Tying and bundling

Contracts with provisions which are subject to be performed on the occurrence of some condition with other ancillary conditions. 

Merger control

Mergers and acquisitions that may lead to a significant disruption to the competitive forces are reviewed and granted by the Competition Council. 

Notification Thresholds: Some legalities dictate that when the turnover of the merging entities exceeds certain thresholds, the businesses need to notify the Competition Council. 

Assessment: The Council decides on whether the merger would create or strengthen a dominant position or else, significantly distort competition. 

Investigation powers

The Competition Council has powers to investigate possible infringements of competition law; for instance, search and seizure powers and power to seek production of requests for information from the companies. 

Sanctions

Penalties for non-compliance with the competition law may involve paying off hefty cash, cancellation of restrictive covenants and stopping unlawful practices. 

Leniency program

It also should be noted that firms which engage in anti-competitive agreements can apply for amnesty. In this respect, they can be punished with less severe penalties than those that can be inflicted on them in case they refuse to cooperate with the Competition Council.   

Exemptions and block exemptions

Individual Exemptions: Some kinds of degrees of exemption can be claimed by the firms. Provided that the agreement assists in improving the production or distribution or if it promotes technical or economic development and allows the consumers the same chances of benefiting from the probable gains that are likely to be realized. 

Block Exemptions: It should be noted that some contracts may be exempted under the foregoing conditions without further scrutiny. For instance, those contracts which come under the EU Block Exemption Regulations. 

Practical tips for businesses

They include:

Compliance programs

The CEOs should ensure that they establish and implement good and proper compliance programs to be used in observing the competition laws. This entails staff orientation and also the application of internal control mechanisms. 

Legal advice

It is recommended that one seek legal advice before engaging in any contractual agreements particularly those that may contain elements of restraint of trade because they are illegal. 

Monitoring

Keep abreast with the current practices and competition so that you are aware of any changes in the rules and their enforcement. 

Summary

The legal requirements are quite stringent and to complement this, businesses should also have proper compliance measures in place and seek legal advice where needed. 


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