Bill on natural monopolies approved by Government

The Government gave the go-ahead to a new bill on natural monopolies, the aim of which is to ensure a loyal competition among economic entities and secure consumers’ interests. The law will represent a legal support for the activity of the National Agency for Protection of Competition which started to operate recently. After the Wednesday’s Government session, Minister of Economy and Commerce Igor Dodon told reporters that this normative act aims to stop the abuses of the monopolists in those spheres of economy which lack free competition. According to the quoted source, given that Moldova has a rather narrow market, there is room for more producers; more companies could be considered economic entities with monopoly activity or trust agreements in establishing prices. Referring to natural monopolies, we do not mean those created as result of the demand and supply, but those like the Chisinau Airport, whose existence reduces the chances that other new airports would be profitable. The majority of public utilities like “Termocom”, “Apa-Canal” are also natural monopolies, the minister says. According to Dodon, when an economic agent has the possibility to control more than 35 % of the market, this fact allows it to increase prices, sometimes unfoundedly. In these cases, monopolists will be penalised. The minister mentioned that there are cases when monopolists operate price cuts, aiming to eliminate smaller competitors from the market. In the European Union member-states, the sanctions applied to monopolists for violations as those mentioned above can reach USD 40 mln.