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Supreme Court fines twenty three firms EUR 3 million for cartel agreement

Photo: pixabay.com
With a verdict from the Supreme Court of Justice of the Republic of Latvia 26 April marked the end of a series of litigations commenced by the Competition Council in relation to an energy construction cartel uncovered in 2013.

As part of the cartel, 26 companies had intentionally distorted competition and increased prices in more than 300 procurements. Companies were applied with fine worth a total of EUR 2,826,187, as confirmed by Competition Council.

The cartel agreement was implemented following this scheme – the contender picked to win in procurements was sent pre-prepared outlines or indications for the price they should provide to coordinate prices among other contenders.

Considering the period of time the cartel agreement was in force and the considerable amount of damage caused by it for clients and other parties, Competition Council has decided to apply a fine to all participating companies. The fine was calculated in interest from each company’s turnover of the previous year, including the severity of the violation and the period of time it was active. Relatively larger fines were applied to companies that took part in several cartel procurements.

Thusly, SIA Daugavpils Energoceltnieks is now obligated to pay 7.5% of turnover from the previous year to the state budget in accordance with the ruling of the Supreme Court. The other 24 penalized companies, except two, which have since become insolvent, have already paid their applied fine amounts. The fine has also been enforced from the liquidated SIA Aiviekstes Energobūvnieks from SIA ENC Latvia, which took on obligations from the company.

Over the course of six years Competition Council was in litigations with 22 out of 26 participants of the cartel, who decided to appeal the institution’s decision regarding deformed competition in 322 procurements organized by AS Latvenergo, AS Sadales tīkls Latvian Railway and other procurements. These clients had procured construction of electrical installations and assembly work in Latgale and Vidzeme between 2006 and 2011.

26 companies have been penalized for participating in a cartel agreement in 2013: SIA Austrumu Energoceltnieks (SIA Būvenergoserviss), SIA RIO, SIA Daugavpils Energoceltnieks, SIA SZMA, SIA Vidzemes Energoceltnieks, SIA Darleks, SIA ELPOLI, SIA ELBRA, SIA Latgales Elektromontāža, Alūksne district’s SIA firma Alūksnes Energoceltnieks, Rēzekne city’s PMK SIA Energoceltnieks,  SIA Farads, SIA «Spriegums», SIA EMPOWER, SIA Aiviekstes Energobūvnieks, SIA DEMP, SIA Rīgas Energo Būve; AS SZMA V, SIA Latvijas Energoceltnieks, SIA OMS, SIA BESECKE, SIA TELMS, SIA INSTEL, SIA MCD, SIA J.E.F., SIA Krāslavas Energoceltnieks.


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