The Administrative Regional Court has overturned the Competition Council’s EUR 2.2 million fine imposed on Riga municipal public transport company Rigas Satiksme, the company’s representative Viktos Zakis told LETA.
Rigas Satiksme previously contested the Competition Council’s decision to fine the company over its agreement with Rigas Mikroautobusu Satiksme (Riga Minicoach Transport, RMS), which stipulated that RMS’ tariffs would be no lower than the tariffs approved by the Riga City Council. The Competition Council had concluded that the agreement restricted competition in passenger transport sector.
In its appeal to the Administrative Regional Court, Rigas Satiksme pointed out that the Competition Council’s decision and fine were unlawful as the Competition Council did not have the right to judge the tariffs in question, and that Rigas Satiksme, as well as RMS, had to observe the Riga City Council’s decisions.
The Administrative Regional Court has concluded that the Competition Council exceeded its authority in reviewing the tariffs of Rigas Satiksme and RMS. According to the court, Rigas Satiksme could not independently agree with RMS on the company’s pricing policies. As a result, the agreement between Rigas Satiksme and RMS was not a cartel agreement but a legitimate action in line with the laws and regulations on the transport industry, explained Zakis.
The court has lifted the EUR 2.2 million fine on Rigas Satiksme, and said that the Competition Council’s decision, that RMS had to independently set its tariffs, was impossible to implement.
As reported, the Competition Council on February 27 last year imposed a fine on Rigas Satiksme and RMS for restricting competition and illegal agreement on tariffs. “The agreement between Rigas Satiksme and RMS on tariffs excluded mutual price competition, protected the companies from competition pressure and restricted opportunities of passengers to receive competitive services,” the Competition Council said.
The Competition Council decided to fine Rigas Satiksme EUR 2.16 million and RMS – EUR 87,948. At the same time, a ban on such an agreement was imposed and RMS was told to set its tariffs based on objective calculation of prime costs per passenger ride.
Rigas Satiksme and RMS in 2013 signed an agreement on passenger transportation services for EUR 36.5 million. The agreement expires this month.