Latvia’s Competition Council has applied a fine of EUR 2.4 million to Riga’s public transport company Rigas satiksme for participating in a prohibited agreement in the so-called nano-water case, as reported by the council on April 24.
The Competition Council uncovered a prohibited agreement in two of Rigas satiksme’s price surveys on procurement of nano-technological chemical substances.
The Competition Council has also applied a fine of EUR 700 to SIA Sava arhitektura company.
Fines for intentional distortion of competition have been applied to Rigas satiksme as the client and Sava arhitektura as the procurement contender.
The remaining five cartel participants – SIA RS Baltic, SIA Alchimica-Latvia, SIA UKT Serviss, SIA Vialeks and SIA HRM – have since been liquidated. This means no fines can be applied to them.
CC launched the case after receiving information from Latvia’s State Police Economic Crimes Enforcement Office. During the investigation of the case, CC concluded that six market participants had coordinated their offers in two municipal price surveys organized between 2012 and 2014 for a total contract amount worth EUR 800,000.
According to information from Competition Council, the official in Rigas satiksme that was responsible for the procurement of specific goods was actively involved in the preparation and coordination of offers, as well as picking the winner in advance.
Participation of Rigas satiksme in the cartel agreement was confirmed by the fact that other contenders were informed of the price surveys before their announcement, the council explains.
Competition Council chairperson Skaidrite Abrama described the nano-water case as “an attempt to imitate competition and zero management”.
Rigas satiksme has already announced plans to appeal the council’s decision. The public transport company notes that CC “has wrongly interpreted regulations” and has made a number of violations in the decision-making process.
“The official entrusted with the procurement and six contenders has cleaned up wallets of Riga’s residents in the cartel agreement. This represents a very negative practice not only from a competition standpoint but also outlines the municipal company’s attitude towards the public finances entrusted to it,” says Abrama.
This is the institution’s second decision in regards to cartel agreement involving Rigas satiksme. In 2017, Competition Council applied a fine of EUR 2.3 million to Rigas satiksme and shuttle bus transport company Rigas mikroautobusu satiksme for illegal coordination of tariffs.
Rigas satiksme plans to appeal Competition Council’s decision regarding the fine in Riga City Vidzeme Suburb Court on May 27. (BNN/Business World Magazine)