The Latvian Competition Council (CC) has uncovered a cartel involving five construction companies that colluded in dozens of public procurements for repair and construction works in engineering communication networks across the country. The watchdog fined the companies a total of €513,508.08 for violations committed between 2021 and 2024.
The investigation began after the municipal housing manager SIA Rīgas namu pārvaldnieks raised suspicions of bid rigging. Evidence gathered by the CC revealed that two groups of companies had coordinated their bids to distort competition. One scheme involved SIA Adapteris, SIA Alpex and SIA Infrakom, which colluded in at least eight procurements organized by public authorities including the Riga Housing Manager, Ogre Housing Manager and the Riga City Council’s Housing and Environment Department. Investigators found that the firms exchanged commercially sensitive information, prearranged bid conditions and submitted cover offers with no real intention of competing.
A second, larger scheme centered on SIA Siltumtehserviss and SIA Apkure IM, which engaged in a continuous collusive arrangement across 25 procurements, including tenders in Līvāni, Valka, Jelgava and at Riga Technical University. According to the CC, the two companies not only coordinated the preparation and submission of bids but also decided in advance who would win each contract. In some cases, both firms jointly carried out the work regardless of which had been formally awarded the project, effectively eliminating competition altogether.
The fines were calculated as a percentage of each company’s turnover. All of the firms except Infrakom reached settlement agreements with the Competition Council, admitting to the violations and waiving their right to appeal, which resulted in a 10 percent reduction of their penalties.
Deputy Chairwoman of the Competition Council, Ieva Šmite, underscored the seriousness of the infringement, calling cartels “the most serious of competition law violations” because they artificially reduce competition and cause “significant losses to customers and society as a whole.” She also stressed the importance of customer vigilance, noting that the case began with a report from a contracting authority.
The investigation received support from the State Police’s Cybercrime Combating Department and the Tax and Customs Police Department of the State Revenue Service.
In addition to the fines, the Competition Council reminded public authorities of their right to seek damages. Under Latvian law, losses are presumed in cartel cases, with a standard assumption that prices were inflated by at least 10 percent. The CC announced it will inform contracting bodies affected by the collusion of their rights and provide methodological support to help them calculate and recover damages.
