Judgment of the Supreme Court of the Republic of Latvia in the case of KIA Auto AS and TKM Grupp AS
On 22(nd) of December 2025, the Supreme Court of the Republic of Latvia
delivered its judgment in the proceedings concerning the legality of the
decision of the Latvian Competition Council dated 7 August 2014 ((initial
company announcement dated August 21, 2014
(https://view.news.eu.nasdaq.com/view?id=621312&lang=en)) with respect to TKM
Grupp AS and its subsidiary KIA Auto AS. The Supreme Court decided to dismiss
the cassation appeals filed by TKM Grupp AS and KIA Auto AS and upheld the
judgment of the Administrative Regional Court of 4 June 2025 (company
announcement on June 6, 2025
(https://view.news.eu.nasdaq.com/view?id=1367907&lang=en)), which confirmed the
Competition Council's decision to impose a fine of EUR 135 thousand on KIA Auto
AS, of which EUR 95 thousand was imposed jointly and severally on TKM Grupp AS.
The judgment is final and cannot be appealed. TKM Grupp AS maintains its
position that it has not violated competition law; however, KIA Auto AS will
comply fully with the judgment and continue its normal business operations.
The proceedings began in August 2014 when the Latvian Competition Council
notified TKM Grupp AS and KIA Auto AS of its decision to impose a fine for an
alleged infringement of competition law. The Competition Council found that,
under the warranty conditions applicable during the period 2004-2009, KIA car
owners were required to carry out regular maintenance exclusively at KIA
authorised service centres and to use only KIA original spare parts. TKM Grupp
AS and KIA Auto AS disagreed with these findings and appealed the decision
(company announcement dated September 16, 2014
(https://view.news.eu.nasdaq.com/view?id=624596&lang=en)), arguing that the
Competition Council had misinterpreted the warranty conditions and that TKM
Grupp AS could not be held jointly or separately liable, as it is merely a
holding company.
After several years of litigation, on 22(nd) of December 2021 the Supreme Court
of Latvia referred the case back to the Administrative Regional Court for re-
examination (company announcement dated December 22, 2021
(https://view.news.eu.nasdaq.com/view?id=1132056&lang=en)), emphasizing the need
for a thorough analysis of the alleged anti-competitive conduct and its impact
on the market, as well as verification of the Competition Council's assessment
and market analysis. In September 2022, the Regional Court suspended the
proceedings at the request of the Competition Council to seek a preliminary
ruling from the Court of Justice of the European Union (company announcement
dated September 15, 2022
(https://view.news.eu.nasdaq.com/view?id=1180973&lang=en)). The preliminary
ruling was issued on 5 December 2024, clarifying that the Competition Council
must demonstrate potential and sufficiently appreciable anti-competitive effects
(company announcement dated December 5, 2024
(https://view.news.eu.nasdaq.com/view?id=1331878&lang=en)). Following receipt of
the preliminary ruling, the Regional Court resumed the proceedings and, on 4
June 2025, upheld the Competition Council's decision despite extensive
explanations, submissions and additional evidence provided by KIA Auto AS and
TKM Grupp AS. We turned to the Supreme Court for their assessment as we did not
agree with the ruling of the regional court.
The Supreme Court has now concluded that the Regional Court assessed the
Competition Council's decision in accordance with the guidance provided by the
Court of Justice of the European Union and established significant potential
anti-competitive effects and does not need to identify actual consequences. The
Court also stated that the 100% shareholding of the parent company creates a
presumption of decisive influence over the subsidiary's conduct. Consequently,
the Supreme Court found no grounds to initiate cassation proceedings.
Raul Puusepp
Chairman of the Board
Phone: +372 731 5000
[email protected] (mailto:[email protected])