HP alliance 'does not breach competition rules'

The Office of Fair Competition (OFC) has ruled that in its alliance with the computer firm Hewlett-Packard, the government was acting in the country's social and educational interest.

The OFC investigated the alliance following a complaint by Joe Tabone, on behalf of the Malta Chamber for Small and Medium Enterprises - GRTU, against the Ministry for Investment, Industry and Information Technology.

The ministry said it welcomed the decision that the strategic alliance was not in breach of the law on fair competition. The alliance, among other benefits, enabled Maltese students to take advantage of lower computer prices, it said.

The OFC said the ministry was acting in the socio-educational interest and it did not result that there was an agreement between the government and HP over the sale of computers at reduced prices. In fact, this was a unilateral offer made by the company which the government had positively welcomed.

In regard to the claim that the government had not issued a call for "expressions of interest", the OFC felt that activities such as those carried out by HP were accessible to everyone for a long time and anyone interested could have and still could take similar initiatives.

On the accusation of "predatory pricing", the OFC pointed out that a company would not be breaching the law on fair competition when, in a situation where it did not enjoy a dominant position, such as HP, it promoted its products by selling them as reduced prices in order to increase its market share.

The OFC ordered the two distributors of HP products, both GRTU members, to advise students that they were free to buy computers from the shops of their choice.