International Law

Can Microsoft Be the First Case for the Newly Created Competition Authority

By Alexei Ghertescu

Friday's Logos Press Economic Review comes up with an article called "From whom to protect competition?" The article's author, Irina Covalenco, provided a review of opinions expressed during the round table organized on June 19 by the Economic Council attached to the Prime Minister jointly with the National Agency on Protection of Competition (hereinafter- the Agency).

A lot of doubts were expressed regarding the prospects of the Agency's efficient activity. And it was told that puting aside all those douts we have to wait for the first serious case of anti-monopoly investigation...

The beginning of the story

...About a half a year ago or so the big campaign against software piracy started in Moldova. There were a lot rumors about massive inspections carried out by police and AGEPI (the Agency for Intellectual Property) representatives in order to reveal facts of illegal use of software products. It was also said that this campaign was initiated by the Moldovan representative office of Microsoft Corp. (read more in Russian here and here). And though the state officials stated that the goal was to check the legality of use of all software products, the main product to be controlled was considered MS Windows operating systems.

The basic objection of business structures and individual users against this campaign was (and still is) the price of Microsoft products. It is told to be too high for Moldovan software market.

The case to intervene?..

And here it may seem to be the possibility to intervene for the newly created National Agency for Protection of Competition. There is almost no competition in the market of operating systems in Moldova. Microsoft products hold almost the total monopoly position. Certainly there are other products like Linux, for instance. However, very few ordinary users know about it and are ready to use it. Moreover, many important programs are compatible only with Windows. For example, at the beginning of the year we called to one of the Moldovan banks to know if their system "Client-Bank" (the system providing the possibility to make bank transfers through electronic network by using digital signatures; the system is widely spread among many moldovan companies) is compatible with Linux. The answer was: "No, the system was made only for Windows"...

So, we have a product that takes almost a monopolistic position in the market. And we have a lot of complaints about its price (I'm not asserting whether it is expensive or not for our market, this is the issue to be decided by competent specialists and authorities).

Now let's see what the law says.

Under art. 20, para. (2)-a) of the Law No. 1103 of June 30, 2000 "On Protection of Competition" the Government has the right to regulate prices in order to prevent cases of abuses of the dominant position in the market.

And this gives to the Agency the right to intervene in order to investigate whether there are the signs of an abuse of the dominant position by Microsft corp. or not by etablishing the current prices for its products...

So, do you think this may be the first big case for the Agency, or not?...

Full post as published by LAW IN MOLDOVA on June 27, 2007 (boomark / email).