Riga Municipality reaches a settlement with the Competition Council on waste management in Riga

We assisted the Riga Municipality to reach a settlement with Competition Council in the infringement case initiated against the Riga Municipality and Getliņi EKO regarding alleged abuse of a dominant position in the Treaty of the Functioning of the European Union in the Waste Management Sector under Article 102 of the Treaty on the Functioning of the European Union.

Course of the proceedings

The Competition Council initiated the case on 18 July 2019, and on 9 September 2019, it decided to introduce an interim regulation that imposed an obligation to immediately stop the performance of the concession contract and to maintain competition in the market. Considering the target of Riga Municipality to ensure fair competition in the waste management market, we drafted a complex strategy for potential solution of the dispute, with various alternatives ranging from a settlement to variants of litigation. Following the client’s instructions and taking into account their desire to solve the dispute in the most efficient manner and in the best interests of the public, we supported Riga Municipality in intense negotiations with the Competition Council about the settlement options and their content, as well as drafting the administrative agreement.

A case of public significance

This assistance was especially significant because the case was legally complex and critical for the public: Riga produces almost 50% of Latvia’s total waste. We were honoured to assist in finding an optimum solution so that Riga Municipality can focus on developing a better waste management system in line with the fair competition regulations. The settlement reached saved a significant amount of public funds, as the Competition Council subsequently a fine of EUR 885,000 jointly on Riga Municipality and Getliņi EKO; this fine is significantly lower than the option provided in the Competition Law to charge up to 5% of the market player’s turnover in the previous financial year, which could exceed EUR 6 million.

Out involvement and team

For this case, assistance was provided to Riga Municipality by the head of our Competition and Regulatory practice, partner Ieva Andersone; as well as by senior associate Marika Grunte; and the co-head of the Dispute Resolution & Risk Management practice, partner Andris Tauriņš.