Competition in Latvia is governed by the Law On Competition. It determines whether anyone has entered into unlawful agreements or has created a dominant position for themselves in the market.
Violations of competition rights
Under the Law On Competition, agreements that are anti-competitive, whether by design or effect, are prohibited and null and void. In particular, the prohibition applies to price fixing, exchange of information relating to prices, agreements on production volumes, allocation of markets, participation in tenders, and exclusion of market participants from the market.
The Law On Competition also prescribes what kind of agreements are permitted and do not materially influence competition.
Violations of competition rights are governed by the following legislation:
Abuse of dominant position
A market participant is in a dominant position, if he has the capacity to distort competition by acting independently of competitors, suppliers or consumers. The law prohibits abuse of dominant position providing also an unlimited list of violation types identical to the EU competition legislation.
The Competition Law also contains a special concept of a dominant position in retail trade and a prohibition of the abuse of such a position, providing an exhaustive list of possible violations. The Competition Council has developed guidelines for the application of Section 13(2) of the Competition Law.
The abuse of a dominant position is governed by the following legislation:
Company mergers are governed by the following regulations:
- Company mergers - Latvia
Other types of unfair competition
The Competition Law prohibits unfair competition. Unfair competition takes the form of a violation of the principles of honest business practice, including imitating another trader's trademark, spreading false information, obtaining his commercial secrets or influencing his employees.
The Law On Advertising provides the requirements for comparative advertising and prohibits misleading advertising. Only such violations of the provisions relating to misleading advertising or prohibited comparative advertising are within the competence of the Competition Council as are potentially capable of inflicting serious harm on the competition.
Other cases of misleading advertising and violations of prohibited comparative advertising, as well as cases of unfair competition come under courts of general jurisdiction.
Unfair competition is governed by the following legislation:
The Consumer Rights Protection Centre is the institution that enforces consumer rights in Latvia, supervises the trade in goods and the provision of services and provides consumers with the information and assistance necessary for resolving conflicts that may arise.
National competition authorities
The Competition Council is the government authority in Latvia responsible for ensuring that competition is protected. It supervises market players to ensure their compliance with the requirements of the Competition Law. The Competition Law provides that information must be provided to the Competition Council on demand. Parties that fail to comply with this demand, or that provide false information, are liable to financial penalties. Persons failing to abide by decisions of the Competition Council or of government officials also face heavy fines.
Strict provisions govern company mergers
Mergers must be notified to the Competition Council in advance and where the total turnover in Latvia of the parties involved in the merger was not less than LVL 25 million in the preceding financial year or their total market share in the specific market exceeds 40%. However, notice need not be given where the turnover in Latvia of one of the two parties involved in the merger does not exceed LVL 1.5 million.
The Law provides for the possibility of giving an abbreviated notice of merger, where the parties involved do not operate in the same or in related markets or where their joint market share does not exceed 15%.
Information to be included in the notice:
The Competition Council may review a case based on a submission or on its own initiative. The submission must be supported by evidence on possible violations of the Competition Law and the person making such a submission must have an interest in prevention of the violation.
The Competition Council reviews only such violations of the provisions relating to misleading or prohibited comparative advertising as are potentially capable of inflicting serious harm on the competition.
Decisions of the Competition Council take effect immediately upon their publication. An appeal against a decision does not stay its enforcement, except in respect of that part relating to the imposition of a financial penalty.