Hungarian Competition Office challenges the Microsoft deal

By EDRi · July 30, 2008

The public procurement procedure of 25 billion HUF (approx. 100 million
euro) for the supply of “Microsoft or other equivalent solutions” was
published in January 2008 in the Tenders Electronic Daily, Supplement to the
Official Journal of the EU. After the successful closing of the procedure,
three companies distributing open source software challenged the result.
They argued that the tender was anti-competitive, because Microsoft products
were directly favoured in the procedure.

The Hungarian Public Procurement Authority refused the request to annul the
procedure. This latter decision has been challenged by the Hungarian
Competition Office (HCO) before the court. HCO claims that the tender
infringed the principle of equal treatment and was restrictive on
competition. The first court hearing was held on 8 July 2008, but no
judgement was made. The next hearing will be held this Autumn.

Neither Microsoft nor the open source software companies are directly
involved in the legal dispute; however if the court decides in favour of the
HCO, the judgement may change the current practice on public procurement of
software in Hungary. It has been an established custom in public procurement
of software that some well-known software or software manufacturers are
expressly mentioned in the calling for tenders. The State’s main argument is
that it is merely a practical way to provide the specifications of the
tender. Depending on the final outcome of the ongoing proceedings, this
practice may need to be reconsidered in order to avoid possible legal
disputes based on competition infringement claims.

Simultaneously with the court proceedings, the three companies (ULX Kft.,
Multiráció Kft. and Open SKM) requested the European Commission and
personally Neelie Kroes, the Competition Commissioner, to take the
appropriate steps to put an end to this unlawful situation.

Hungarian companies send complaint to the European Commission on Microsoft’s
monopoly (3.06.2008)

Something Rotten in Hungary (21.05.2008)

EDRi-gram: Microsoft appeals the EC fine but faces even more complaints

(contribution by László Pók – Lexical Lawyers Association – Hungary)