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USD 39 million antitrust claim against Microsoft in Argentina

19 abril, 2010

Pixart S.R.L, a small Argentine developer of customized Linux operative systems, brought an antitrust claim against Microsoft requesting the Argentine Antitrust Commission (the “Commission”) to determine whether Microsoft has abused its dominant position in the operative systems market, and, if so, to impose a AR$ 150 million fine (approximately USD 39 million) for such infringement, which is the maximum fine allowed by the Argentine Antitrust Law (No. 25,156). According to a newspaper article covering the news, this is the first antitrust claim filed against Microsoft both in Argentina and in Latin America.

Pixart is an Argentine company that develops software and operative systems based on Linux, which, unlike Microsoft Windows, has an open code allowing software developers and users to customize operative systems without infringing copyrights or licenses.

Pixart filed its claim with the Commission back in September 2008, but was not formally admitted by the Commission until recently, which will now start to investigate on the merits of the case.

According to the claim, in 2002 Pixart installed its operative system in 7 out 10 computers sold at Garbarino –one of the main electronics retailers in Argentina- and had around 320,000 users in Argentina. But its financial problems started in 2005 when the Argentine Government launched the so-called “Mi PC” plan, whereby high-school students could have access to subsidized computers that had the Microsoft Windows Starter Edition as a pre-installed operative system. Afterwards, its “strategy was to artificially lower the final price of computers running Windows, and financially strangling Pixart, which could not charge anymore its service for pre-installation of Linux on machines manufactures in Argentina”, according to Roberto Di Cosmo –an open source advocate expert who advised Pixart in its claim-.

Now, the Commission will have to prove the following points: (i) the existence of acts or conducts related to the production and/or distribution of goods or services, (ii) that said acts and/or conducts limit, restrict or distort competition, and (iii) that such anti-competitive behavior has damaged the general economic interest.

Should the Commission conclude that Microsoft has violated the antitrust rules in Argentina the fine would be collected by the Argentine Government. Pixart would not directly economically benefit from the antitrust resolution issued by the Commission, but it will be entitled to start a claim before the courts to recover the damages allegedly caused by Microsoft.

It is worth mentioning that there has been only one case in Argentina (Autogas c/YPF decided by a commercial judge on September 2009) in which a court granted a company compensation based on the infringement of antitrust rules.

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One Comment leave one →
  1. leopoldopagotto permalink
    20 abril, 2010 10:53 AM

    The post is very interesting. However, I would like to make a minor correction: in Brazil, there were two administrative processes and three preliminary investigations against Microsoft. Microsoft won most of the cases – only the TBA/Microsoft was unfavourable to Microsoft. However, it is clear that so far no serious investigation has been carried out in relation to the practices which were investigated in the US and the EU – in spite of the suggestions made by the CADE, no administrative process was commenced.

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