The latest survey from Latvia’s Competition Council (KP) reveals a concerning trend: while general awareness of competition law is rising, 10% of Latvian companies would still consider engaging in illegal market manipulation to boost profits. The biannual survey, conducted by Latvijas Fakti, highlights key areas of concern in Latvia’s competitive landscape, including collusion in public procurement, abuse of market dominance, and state actions that distort competition.
While municipalities showed a decline in willingness to participate in anticompetitive practices—only 3% of local government representatives expressed readiness to engage in such behaviors, down from 10% in previous years—the study identified serious obstacles to fair competition. Specifically, public procurement cartels and abuse of dominant market positions emerged as top concerns for over half of respondents, particularly in sectors like healthcare, construction, and energy.
Rising Support for Tougher Penalties
There is growing support for harsher penalties for competition violations. A third of surveyed companies and a fifth of municipalities now advocate for steeper fines, with an increase of 10% and 13%, respectively, since 2022. However, about 52% of businesses and 74% of municipal representatives believe that current fines are sufficient deterrents.
Improved Understanding of Competition Law
Awareness of competition law among Latvian businesses has improved, with 85% of companies recognizing prohibitions on price-fixing and market division agreements. Additionally, two-thirds are now aware that setting prices below production cost to undercut competitors is illegal. The survey found a general increase in public knowledge of competition law principles, reflecting effective outreach by the KP and related entities.
Increased Interest in Seeking Damages
The right to claim damages for competition violations has attracted more interest from businesses, legal offices, and municipalities. Compared to 2022, interest among legal representatives and municipalities has notably increased, with 7% of companies and 18% of municipalities now considering damage claims.
Support for Leniency Program Grows Despite Barriers
KP’s “Leniency Program,” which exempts the first whistleblower in a cartel from penalties, is increasingly recognized, with awareness up by 5% in 2024. While one in five companies acknowledges the program’s benefits, concerns about whistleblower stigma and mistrust of regulatory authorities remain significant barriers to participation.
Positive Perception of KP’s Impact on Market Health
Overall, 80% of municipalities and NGO representatives view KP’s decisions as positively impacting the market, with 63% of business leaders sharing this perspective. Survey respondents rate KP’s legal justifications and application of competition law as clear and well-founded, underscoring the Council’s efforts to uphold fair market practices.
The findings from this survey will shape KP’s future strategy and initiatives, ensuring continued focus on public awareness, regulatory enforcement, and support for a competitive marketplace in Latvia.
