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The Latvian Competition Authority concludes that the restrictions introduced during the COVID-19 pandemic cause competition inequality for beauticians and beauty specialists in cosmetology

Restrictions in the beauty sector during COVID-19 cause competition inequality*

Having examined the application of the Latvian Association of Beauticians and Cosmetologists and the Latvian Association of Beauty Specialists, the Competition Council of Latvia (the CC) concludes that the restrictions introduced during the COVID-19 crisis, which arise from the Cabinet of Ministers Order No.655 “On Announcement of the Emergency Situation” of 06.11.2020, cause competition inequality unfavourable for beauticians and beauty specialists in cosmetology.

Within the framework of the currently effective regulatory framework provision of beauty services is prohibited during the emergency situation. The only exception applies to hairdresser, manicure, pedicure and podologist services, which can be provided starting from 1 March. Also services provided by medical persons – beauticians and cosmetologists – are allowed, if such are justified by medical indications and are provided at a medical institution.

Consequently, medical institutions continue providing beauty services by defining them as medical manipulations, whereas in beauty salons a service provider having an appropriate qualification – medical person – is not allowed to provide such services.

Considering the fact that at both places of provision of services – a medical institution and a beauty salon – it is possible to ensure equivalent compliance with requirements for provision of services in the context of the epidemiological situation, and specialists with an appropriate qualification are working at both places of provision of services, the CC holds a view that an unequal, competition distortive and discriminatory situation is caused.

As a result, separate market participants, who continue providing the aforesaid services, gain double benefits – the provision of services is continued, avoiding competition from medical persons practising at beauty salons, and the demand for a specific service increases at the medical institution, providing possibilities to raise the service prices. Due to this situation, the service recipient will be the suffering party both in a short-term and long-term perspective, being left with less options for choice and increased prices.

Also, distribution of the flow of customers among multiple places of provision of service would reduce the concentration of customers at medical institutions. At the same time, the long-term impact of the selected restrictions on the competition has to be considered in order to eliminate the risk that many small, specialised market participants will not be able to resume their commercial activity after cancellation of the emergency situation.

Respectively, the CC considers that restrictions that allow one market participant to continue its economic activity, and prohibit the other market participant from implementing such activity, where both service providers are comparable, can meet the required epidemiological requirements and ensure appropriate qualification, provide the same services, which can be justified both as medical services and beauty services, are not justified.

Therefore, the CC calls to consider a possibility to revise the restrictions set for operation of beauty salons, in order to ensure equal competition opportunities to all market participants – medical persons – regardless the place of provision of services, provided that these specialists are able to meet the required epidemiological requirements.

*This is the original title of the press release. The title above has been amended in order to match the e-Competitions format. Individual authors are welcome to provide original independent commentaries on the case law. Articles are subject to approval by the Board of e-Competitions Bulletin before publication based on the Editorial Policy (click here).

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Latvian Competition Authority, The Latvian Competition Authority concludes that the restrictions introduced during the COVID-19 pandemic cause competition inequality for beauticians and beauty specialists in cosmetology, 2 April 2021, e-Competitions April 2021, Art. N° 101323

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