Wednesday, June 27, 2007

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

Epigraph.

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?...

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7 Comments:

At Friday, June 29, 2007 8:33:00 AM, Anonymous Anonymous said...

Don't know about "first", but no doubt in my mind about "big" .. ;)

 
At Friday, July 06, 2007 3:49:00 PM, Blogger Lucia said...

It probably should be. However, given the nature of Moldovan state institutions - that is weak - it is unlikely anything will happen unless some businessmen & politicians see a particular financial interest in this. Very little in this country is done for the sake of public good/interest.

 
At Friday, July 06, 2007 4:02:00 PM, Blogger Alexei Ghertescu said...

Yes, Lucia, you're right. But, a LOT of businessmen are interested in reducing Microsoft's prices
:)

 
At Tuesday, October 16, 2007 1:56:00 PM, Blogger Estonia in World Media (Rus) said...

In price regulation the question of paramount importance and great difficulty is what is fair price. The price of regulatory work can outweigh the value of regulation unless it is a key sector

 
At Tuesday, October 16, 2007 4:36:00 PM, Blogger Alexei Ghertescu said...

I consider that the market of operational systems IS a key market nowadays. As to a "fair price" I agree that it is the most difficult question to answer. How should it be resolved? Well, perhaps it's not a question for lawyers but for economists...

 
At Thursday, January 14, 2010 9:02:00 AM, Anonymous DUI Attorney Seattle said...

No, it can't . Law is above all.

 
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