Competition Council claims almost 20-fold return on “pitiful” budget allocation

The Competition Council of Latvia (CC), te public body charged with ensuring fair competition in the marketplace, has calculated that the average public benefit from implementation of competition policy in Latvia from 2017 to 2019 is worth 24.8 million euros a year.

“Considering the Authority’s budget in this period, each euro allocated to the Authority generates average benefit of 19.32 euros,” it said in a clear attempt to demonstrate that it believes it offers good value for money.

The CC explained the methodoliogy by which it had arrived at the figure, based on OECD recommendations.

“The calculation is based on the assumption that by precluding or preventing specific infringements of the competition law the CC protects the public from potential loss, for example restricted competition and groundlessly increasing prices as a result of an infringement. Such precluded or prevented loss represents the public benefit,” it said.

To calculate the generated benefit, the Authority analysed its decisions from 2017 to 2019, the price increase characteristic of the specific type of infringement, as well as the possible duration of existence of infringement. In addition, the positive effect of preventive measures implemented by the Authority were taken into consideration, for example, warnings and negotiations, which were implemented towards specific companies that had committed less severe infringements of prohibited agreements or abuse of dominant position.

The calculation of public benefit does not include fines imposed by the CC.

Skaidrīte Ābrama, the Chairwoman of the CC said: “This calculation, made according to the OECD methodology, shows the high operational efficiency of the Authority, and it is one of the highest among countries, where such calculations are made. Unfortunately, the budget of the Competition Council of Latvia is the most pitiful among all 37 competition authorities listed in the Global Competition Review Rating Enforcement, and we are forced to work on the verge of exhaustion.”

LSM.LV

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