Opportunity for Symmetric Approach to the Competition Neutrality – Case of Latvia

The concept of competitive neutrality has risen with the intent to ensure fair conditions for State Owned Enterprises (SOE) and Private Owned Enterprises (POE). Practically there is the shift of that treatment towards protecting POE against excessive support of SOE by owners. The aim of this research is to propose guidelines to achieve balanced competitive neutrality. Applying restrictions, traditionally used for public administration, SOE lost competitivity with the private sector. Among such requirements are excessive openness of SOE decisions, obligatory public procurement procedures, uniform remuneration system, ineffective recruitment requirements for board and supervising council, prohibition of side activities, to increase profit, overregulated fighting conflicts of interest among SOE staff etc. The research methodology includes: 1) analysis of different burdens, which decrease the effectiveness of SOE; 2) interviews and questionnaires of responsible SOE experts 3) finding solutions for balancing competitive neutrality policy. Main conclusions: When the initiative to intervene into the supply of public goods came from the private sector, preference could be given to establishing POE requirements, which are in force simultaneously for public sector institutions. When the initiative to intervene in supplying private goods came from SOE, then preference could be for dismissal of administrative burden in combination with strong control of traditional competitive neutrality rules.