Latvia Competition Law & Policy: Key Developments in 2025
2025 marked a pivotal year for competition law in Latvia, witnessing significant developments that reshaped the enforcement landscape and policy direction. From the conclusion of long-standing litigation to groundbreaking rulings by the Latvian Supreme Court (the Senate), competition law took center stage. This article delves into the key developments in Latvian competition law policy and enforcement throughout 2025.
Legislative Amendments: Holding Officials Accountable
A significant shift is underway with proposed amendments to the Competition Law. These amendments aim to introduce personal liability for company officials involved in competition law infringements, particularly those related to prohibited agreements involving public funding. Currently under review by the Saeima committee, the draft legislation proposes a three-year ban on officials holding positions if they were directly involved in the infringement or were aware of it and failed to take preventative action.
However, exemptions are provided for participation in leniency programs, providing information leading to infringement findings (without encouraging further cartel activity), or if more than three years have passed since the infringement occurred. This signals a clear message from the legislator: silence carries risk, and personal accountability is paramount. The goal is to move beyond treating fines as mere “corporate expenses” and ensure individual responsibility for anti-competitive conduct.
Anti-competitive Agreements: Cartels and Fines
Half-Million Euro Fine for Nationwide Cartel
The Competition Council (CC) continued its focus on cartels in public procurement, exemplified by a case involving five construction companies colluding on tenders for engineering communication network projects. This collusion resulted in a total fine of half a million euros. The case originated from information provided by SIA “Rīgas namu pārvaldnieks,” highlighting the success of the CC’s efforts to educate procuring entities on identifying suspicious bidding patterns – such as the CC’s Signal List.
The investigation revealed a concerted practice over three years, distorting competition in over 30 tenders, despite the absence of a formal agreement or project allocation. All companies ultimately settled with the CC.
KIA Auto Case Concludes After Decade-Long Litigation
The KIA Auto case, reported on last year, reached its conclusion in late 2025 with the Senate refusing to initiate cassation proceedings. This finalizes the CC’s 2014 decision to fine KIA Auto and its parent company 135,000 euros for restrictive warranty conditions requiring exclusive use of KIA authorized service shops and original spare parts.
The litigation involved a referral to the Court of Justice of the European Union (CJEU), which clarified the standard of proof for demonstrating restrictions of competition. The CJEU ruled that demonstrating potential anti-competitive effects is sufficient, even without proving specific actual effects. The Administrative Regional Court upheld the CC’s decision, guided by the CJEU’s ruling.
Landmark Judgment in the “Builders’ Cartel” Case
Just before Christmas, the Senate delivered a landmark judgment in the “builders’ cartel” case, annulling the Administrative Regional Court’s ruling and sending the case back for re-examination. The case, dating back to 2021, involves allegations of cartel activity among 10 construction companies affecting approximately 70 procurements.
The Senate’s ruling significantly impacts the CC’s practice: covert recordings obtained during criminal investigations are inadmissible as evidence in administrative competition law proceedings. This aligns with the European Court of Human Rights’ emphasis on the rule of law, procedural fairness, and fundamental rights. The Senate determined that cartel detection isn’t a justified purpose for covert surveillance under Latvian law, making repurposing such information for competition law infringements prohibited.
The case is now back with the Administrative Regional Court, lacking the key evidence from the covert recordings, making the outcome uncertain.
The Prohibition of Abuse of a Dominant Position
In 2025, the CC imposed a 78,000 euro fine on SIA “Mārupes komunālie pakalpojumi” (“MKP”) for abusing its dominant position in providing water and sewerage services. MKP was found to have charged customers for sewage services even when water wasn’t entering the sewer system (e.g., for garden watering) and restricted access to independent water meter installation.
The CC has ordered MKP to resume installing secondary water meters and allow customers to use qualified third-party contractors. Residents are encouraged to file claims for damages related to overcharges.
Merger Control Overview
The CC adopted 18 merger decisions in 2025, with 4 cases undergoing Phase II investigations. One merger involving fuel retailers and wholesalers was approved with binding conditions. Merger activity slightly decreased compared to 2024, but included notable transactions like Ingka Investments’ forestland acquisition and the merger of ADB Gjensidige and ERGO in the Baltics.
Taking Over a Lease: A Notifiable Merger?
The CC’s practice regarding retail mergers involving lease agreements has been challenged. The Administrative Regional Court ruled that a lease of premises previously used by a competitor doesn’t automatically constitute a merger, emphasizing the need for substantive merger assessment. The CC has appealed this ruling to the Senate, leaving the future of this practice uncertain.
Market Inquiries
In 2025, the CC conducted three market studies: Scrap Metal, Payment Terms in the Fresh Fruit, Vegetable, and Berry Supply Chain, and Public Procurement by South Kurzeme Municipality. A significant development was the first-ever fine for violating the Unfair Trading Practices Prohibition Law, levied against SIA “MAXIMA Latvija” with a fine just shy of 2 million euros for unilaterally changing supply agreement terms. The CC also launched a pan-Baltic project to assess the competitiveness of the retail sector.
Outlook for 2026
The CC is expected to continue prioritizing the food retail sector and the prevention of cartels in public procurement in 2026. Ongoing investigations and market surveillance projects will also remain a focus, alongside efforts to strengthen the supervision of public persons.
© 2025 Wolters Kluwer N.V. and/or its subsidiaries. All rights reserved.
