I try not to comment on decisions of the Competition Council in cases in which I was involved in some capacity. In this case, however, I am making an exception to this rule, given that I would have written a dissenting opinion in any case, and my former colleagues know my position.
On 29 July 2026, the Competition Council adopted its Decision No. APR-03/25-21 in a case concerning the actions of the National Agency for Public Health (ANSP), the Ministry of Health and a number of medical institutions. In Moldova, the competition authority is empowered to investigate actions by public authorities that distort or may distort competition (as provided for in Article 12 of the Competition Law). This case concerns a public authority that, in addition to exercising its regulatory and supervisory powers, has been providing services on a competitive market and participating in public procurement procedures in direct competition with the companies it regulates.
In this decision, the investigation concerning these institutions was closed without a finding of infringement. In my view, the decision raises serious concerns about the purpose and interpretation of Article 12 of the Competition Law (‘anticompetitive actions of public authorities’) and, more generally, about the way EU case law (which has become binding in Moldova since 2023) is applied in Moldova.
In this particular case, the Council’s decision, although finding no infringement by the public institutions involved, raises even more significant State aid issues and potentially exposes the National Agency for Public Health to the risk of having to repay part of the public funding allocated to equip its laboratories.
The essence of the problem
The National Agency for Public Health (ANSP) is a public authority subordinate to the Ministry of Health and responsible for public health supervision. Among other things, it issues sanitary operating authorisations to medical and healthcare institutions (public or private), including specialised laboratories operating in this market.
At the same time, ANSP periodically provides laboratory services directly in the very same market as other undertakings authorised by ANSP. Moreover, it often participates in public tenders in direct competition with them (and regularly wins contracts). In other words, the regulator directly competes with those it regulates.
In its decision, the Council acknowledged the competition risks posed by such a situation, but closed the investigation without finding an infringement, limiting itself to recommendations for legislative amendments.
In this article, I will explain why I believe that ANSP had no legal basis for providing certain services on this market and why an infringement of Article 12 of the Competition Law should have been found.
What is the position of ANSP, and implicitly that of the Competition Council, based on?
The Agency and the Ministry of Health repeatedly rely on a single legal provision: Article 16(3)(m) of Law No. 10/2009 on State Supervision of Public Health, which allows ANSP to provide services in the field of public health, at the request of natural or legal persons, in accordance with the tariffs set by the Government.
But the law does not confer on the Agency an unlimited right to enter competitive markets and provide any services it chooses.
ANSP and the Ministry refer to two Government Resolutions:
- Resolution No 533/2011 approving the list of paid services and their tariffs in the field of public health provided to natural and legal persons.
This Government Resolution expressly sets out the list of services that may be provided by ANSP. These are not ordinary services that any undertaking can provide. Rather, they are services of public interest, with a “community dimension, aimed at protecting and promoting public health” (see pt. (55) of the Decision), entrusted to a public authority – ANSP.
However, the services for which ANSP competes in public tenders on an open market are not covered by this Government Resolution.
- Resolution No 1020/2011 on tariffs for medical and healthcare services
This Government Resolution lists a number of medical and healthcare services provided for payment by healthcare institutions and sets the corresponding tariffs.
ANSP provided certain services listed in this Resolution (listed in Chapter E of Annex No 3 – “Investigations and Services in Public Health”), entering into direct competition with other economic operators active in the market. These services are the subject of public procurement procedures open to market operators.
All parties involved in the investigation confirmed that the services provided by ANSP in competition with other market operators are those listed in Resolution No. 1020/2011 (addressed to healthcare institutions) and not in Resolution No. 533/2011 (which is specifically addressed to ANSP). The Agency and the Ministry say that because certain services are listed in the former resolution under the heading “Services in Public Health”, the Agency is entitled to provide them.
However, paragraph 4 of the Regulation approved by Resolution No. 1020/2011 expressly states that its provisions apply to “healthcare institutions”. ANSP does not fall into that category. The Agency is not a public healthcare institution but a public authority. Consequently, this government resolution does not apply to ANSP: it expressly lists the institutions to which it applies, and the Agency is not among them. ANSP cannot simply assume the status of a healthcare institution and does not acquire the right to provide these services simply because they are described as “public health services”.
Thus, if ANSP provides the services intended for healthcare institutions, it appears to exceed the limits of its powers.
The Competition Council itself identifies “the existence of a major ambiguity between two legal acts” (see para. (150) of the Decision). However, in my view, there is no ambiguity at all. Resolution 533/2011 governs ANSP’s services, while Resolution 1020/2011 sets tariffs for the services of healthcare institutions.
The Competition Council then recommends, in its decision, removing these “ambiguities”. But if the problem lies in the institutions involved misinterpreting the scope of the legislation, amending the legislation is not the solution.
In my view, ANSP simply has no right to provide the services listed in Resolution 1020/2011, regardless of what ANSP or the Ministry of Health say.
Why this is a competition problem, not merely a question of legality — and why an infringement of Article 12 of the Competition Law should have been found
Article 12(2)(b) of the Competition Law prohibits public authorities from setting discriminatory conditions or granting privileges to undertakings where these are not provided for by law. Article 12 does not sanction every unlawful act of an authority, but only those forms of conduct through which the State grants privileges or sets discriminatory conditions to the detriment of competition.
In the case of ANSP, two such privileges can be identified:
The first is the authority’s participation in a competitive market without a sufficient legal basis. A private operator may do anything that is not prohibited; a public authority may do only what the law expressly allows it to do.
If ANSP provides services for which it has no legal basis, using the laboratories, staff and status of a public authority, the problem is no longer merely one of legality. Through its own activity, the State grants itself the right to participate in the market as an economic operator under conditions not provided for by law, thereby creating an advantage over its competitors.
The Council states in paragraph (120) of the Decision that “the actions of ANSP consisting in the provision of healthcare services not provided for by law on a competitive market […] do not meet the constituent elements of Article 12”. Services not provided for by law, on a competitive market, provided by a public authority – and yet Article 12 does not apply?..
The second privilege is the absence of the sanitary authorisation. The specifications for all tenders in which ANSP participated required a copy of the sanitary operating authorisation as an eligibility criterion (para. (107) of the Decision). These authorisations are issued by ANSP. All other bidders were required to submit one — except ANSP, which was admitted to participate in the tenders without submitting the document.
The Agency justified the absence of the authorisation on the grounds that it is itself the authority that issues such authorisations (which is understandable — how can you issue a permit or authorisation to yourself?). Instead, it submitted a sworn statement and… an accreditation certificate from MOLDAC (paras. (49) and (122) of the Decision) — the National Accreditation Centre, which is responsible for quality assurance systems in Moldova.
But the sanitary operating authorisation and the accreditation certificate are different documents and are not interchangeable! The former is issued by ANSP and confirms that the activity of the undertaking complies with the requirements of sanitary legislation (Article 2 of Law No 10/2009). The accreditation certificate, by contrast, is issued to confirm that a conformity assessment body is competent to carry out a specific conformity assessment activity (Articles 8(1)(e) and 12(4) of Law No. 235/2011 on accreditation and conformity assessment activities).
Thus, these are two distinct documents, governed by different legal frameworks and serving different functions. An accreditation certificate does not replace a sanitary authorisation, nor does it confer new powers on ANSP.
An unjustified justification
The Council justifies the exception for ANSP by reference to Article 19(10) of Law No 131/2015 on public procurement. It refers to this provision at least five times in its decision (see paras. (29), (50), (77), (88) and (123) of the Decision).
According to this article:
“Any bidder/candidate who is in one of the situations referred to in paragraphs (1) and (3) shall provide evidence showing that the measures it has taken are sufficient to demonstrate its reliability despite the existence of a ground for exclusion. If the contracting authority considers such evidence sufficient, the bidder/candidate concerned shall not be excluded from the public procurement procedure.”
However, this provision concerns the grounds for exclusion set out in paragraphs (1) and (3) of that article – for example, convictions, insolvency, failure to pay taxes, other infringements or misconduct, and conflicts of interest, among others – rather than a failure to meet one of the qualification criteria. The absence of the sanitary authorisation required in the tender documents is a different issue.
In other words, the law allows, in certain situations, a bidder that has previously committed certain infringements to demonstrate that it has taken measures to restore its reliability. That is quite different from a situation in which a bidder fails to submit a document that is mandatory for participation in the tender.
In this case, Article 69(6) of the Law provides that the contracting authority shall not accept a bid that does not meet the qualification and selection requirements. The Council cites this very provision in para. (87) of the Decision, and in para. (127) it describes ANSP’s bid as “incomplete”. Yet it does not draw the obvious conclusion.
Did ANSP act as an authority or as an undertaking?
Article 12 of the Competition Law targets anticompetitive actions of public authorities. The Competition Council states that ANSP “did not act in the exercise of public authority but (…) as an economic operator” (para. (96) of the Decision). In other words, the Competition Council considered that ANSP acted as a market operator rather than as a public authority and that its public-authority status was therefore irrelevant in this case. On that reasoning, Article 12 of the Competition Law does not apply to market operators.
However, it was precisely its status as a public authority that ANSP invoked in order to explain why it did not submit the sanitary authorisation. So, on the one hand, ANSP argues that it acts as an economic operator (and should therefore have complied with all the requirements applicable to such operators), while, on the other hand, ANSP invokes its status as a public authority to justify its failure to comply with certain qualification requirements.
What matters is that ANSP has a dual capacity: it is a public supervisory authority and, at the same time, an economic operator in the market for laboratory services. This dual capacity was not examined by the Competition Council. However, the fact that the Agency provides services as an undertaking or market operator does not exclude its public-authority prerogatives.
Acting as a public authority, ANSP allowed itself to participate in the market as an economic operator, but without the required authorisation. As a result, ANSP, as an economic operator, was in a more favourable position than its competitors.
The principle that such situations are incompatible with competitive neutrality is not new. The most recent OECD Recommendation on Competitive Neutrality (2021) expressly provides that adherents should “subject competing activities to the same regulatory environment and […] equivalent transparency with regard to all current or potential market participants”, and “ensure that Enterprises, regardless of their ownership, location or legal form,are not ultimately responsible for regulating the market(s) in which they currently or potentially compete” (see Section II.1(c)(i) and (ii)).
The Council acknowledges the risks, but does not find an infringement
The Competition Council itself admits the risk of market distortion and states that “participation in public procurement procedures alongside private operators authorised by the same institution gives rise to: suspicions of favouritism and unequal treatment; privileged access to information and participation conditions” (para. (140)). Then, the Council adds that:
“A public authority that exercises powers of authorisation, control or regulation over certain undertakings should not participate directly in public procurement procedures involving the operators it supervises.” (para. (141) of the Decision).
“This dual capacity […] may create an unfair competitive advantage and an imminent risk of a structural conflict of interest, where the regulator competes directly with the entities it regulates.” (para. (155) of the Decision).
So, the Council sees and acknowledges the problem. Nevertheless, it does not find an infringement, because it considers that ANSP’s participation in tenders is not expressly prohibited, stating that “this dual capacity is not explicitly prohibited by the current legal framework” (para. (155) of the Decision).
The risk of cross-subsidisation and the discouragement of private investment
ANSP is a public authority financed from the state budget, including for its laboratory activities (para. (61) of the Decision). Private laboratories, by contrast, have to invest their own resources in equipment, premises and staff. If ANSP uses publicly funded capacities for competitive activities, it may gain an advantage unavailable to other operators.
Equipping a laboratory that meets all sanitary, technical and accreditation requirements requires considerable investment: specially fitted premises, equipment, qualified staff and a quality management system. These are therefore significant investments. Under these conditions, what incentive do private companies have to invest in their own laboratories if a public authority comes along and competes with them using a laboratory created and equipped with public money for other purposes?
In such situations, costs must be allocated separately, and separate accounts must be maintained for ANSP’s public-authority functions and its commercial activities. The Competition Council found only that ANSP “keeps accounting records on the revenue side” (para. (60) of the Decision), but the Decision does not show that ANSP also keeps separate records of its costs. Consequently, it has not been demonstrated that cross-subsidisation of commercial activities is being prevented.
There is also a risk of privileged access to information. By exercising its powers as a public authority and conducting relevant controls and inspections, ANSP can observe the operations of private laboratories from the inside: their equipment, staff, activity volumes and, at times, shortcomings. The Council itself recognises the existence of “privileged access to information” (para. (140) of the Decision). No private laboratory has, or can have, access to similar information about ANSP.
How the Competition Council misinterprets EU case law
I now turn to a more technical section, which may be of interest mainly to competition law specialists. But in my view, it is too important to be overlooked. If you are not interested in CJEU case law, you can skip directly to the final section, which addresses other consequences of this case for ANSP relating to State aid.
In recent years, considerable work has been done to integrate the case law of the Court of Justice of the European Union into the decision-making practice of the Moldovan Competition Council. A legislative amendment was even adopted, making that case law binding in Moldova when interpreting and applying the national Competition Law. The correct application of CJEU case law may thus be seen as a test of the authority’s maturity, on which it will be assessed by the European Commission in the EU accession process.
As this case shows, the Competition Council has yet to demonstrate that it meets this test. In support of its position in this case, the Council relied on several judgments of the CJEU.
In concluding that ANSP acted as an “economic operator” and therefore did not fall within the scope of Article 12 of the Competition Law, the Competition Council relied on four judgments of the Court of Justice (see paras. (72)–(74) of the Decision): Höfner & Elser (Case C-41/90), Commission v Italy (Case 118/85), Aéroports de Paris (Case C-82/01 P), and MOTOE (Case C-49/07).
However, the case law relied on by the Council does not support its conclusions.
In para. (110) of the Decision, the Council concludes that ANSP took part in the tenders “as an economic operator, as the European Commission accepts in its practice”.
This is where we see a distorted interpretation of EU case law. The argument is presented in a way that gives the impression that EU practice confirms the right of public authorities to participate in the market as economic operators. But the CJEU judgments to which the Council itself refers address an entirely different question: under what conditions a public entity may be classified as an undertaking and thus be subject to competition rules.
In all the cases cited, the State or certain public or non-profit entities sought to invoke their public status and functions in order to argue that competition rules did not apply to them. The Court of Justice rejected the idea that these characteristics exclude the classification of such entities as undertakings. On the contrary, the Court insisted that, where an entity carries out economic activities on a market, it may be regarded as an undertaking within the meaning of competition law, regardless of its public status or the way in which it is financed.
In other words, these judgments seek to ensure that the competition rules apply to public entities when they engage in economic activities, not to grant them an unconditional right to carry out such activities on the market.
In the present case, the situation is reversed – the Competition Council states that ANSP acts as an undertaking (which is correct!), but infers from this that, in these circumstances, ANSP’s status as a public authority is no longer relevant (which, in my view, is wrong). Thus, simply by classifying ANSP’s activity as economic, the Council excludes the application of Article 12 of the Competition Law, which targets anticompetitive actions of public authorities.
Yet the above case law confirms that a public entity can both exercise public-authority functions and carry out economic activities. Moreover, the Court emphasised the need to examine each activity separately to establish whether it falls within the exercise of public powers or constitutes an economic activity. Consequently, the two capacities can coexist within the same entity, and classifying an activity as economic does not eliminate the entity’s public-authority functions.
In the case of ANSP, this distinction is made only formally. The Council finds that participation in tenders is an economic activity, but it does not sufficiently examine the link between this activity and ANSP’s public-authority functions. The same laboratory capacities are used both to perform public functions and to provide services on a competitive market. In addition, the Decision does not demonstrate the existence of separate cost accounting capable of preventing cross-subsidisation. It therefore remains unclear to what extent the two types of activities are effectively separated or whether ANSP competes on the market on equal terms with other undertakings.
In Aéroports de Paris (C-82/01 P), the Court expressly confirmed that the same entity may exercise both public-authority functions and economic activities. The Court drew a clear distinction (para. 76) between purely administrative activities, in particular supervisory tasks, on the one hand, and the management and operation of the airports, remunerated by commercial fees, on the other.
Even more interesting is Commission v Italy (118/85). In that case, the Italian State refused to provide the European Commission with certain information about the activities of the Autonomous Administration of State Monopolies, which had no separate legal personality. Italy argued that, since this administration was part of the State structure and exercised public functions, it could not be regarded as a public undertaking within the meaning of the applicable EU rules (paras. 3–4 of the judgment).
The Court rejected these arguments, without, however, denying the Administration’s status as a public authority. It explained that the State may act either by exercising public powers or by carrying out industrial or commercial activities by offering goods and services on the market (para. 7). Most importantly, the Court stated that “in order to make such a distinction, it is therefore necessary, in each case, to consider the activities exercised by the State and to determine the category to which those activities belong” (para. 7).
Moreover, in paras. 6 and 8 of the judgment, the Court stressed the importance of financial transparency in the case of public undertakings, which must make it possible to draw a clear distinction between the State’s role as a public authority and its role as owner of undertakings. Where the same entity exercises both public functions and economic activities, financial relations become even more complex, and the need for transparency is all the greater.
The irony is that this very financial transparency, including the effective separation of the costs related to the different activities, has not been demonstrated in ANSP’s case. And yet the Council relies on the Commission v Italy judgment to justify excluding ANSP from the scope of Article 12 of the Competition Law.
The way in which the Council cites the MOTOE case (C-49/07) is also interesting. The Council relies on it only for the definition of the notion of undertaking. But the circumstances of this case are directly relevant to ANSP’s situation. The case concerned an association that had the power to authorise competitions organised by other operators, but which, at the same time, organised similar competitions itself. In other words, the situation was very similar to that of ANSP.
The Court held that a situation in which an association authorises the activities of other operators but is not subject to the same authorisation requirement when it organises its own competitions creates “unequal conditions of competition” (paras. 51–52 of the judgment). In other words, the problem lay precisely in the advantage enjoyed by an economic operator because of its public-authority powers.
So, in the judgments relied on by the Competition Council, the functional notion of “undertaking” was used to ensure that the competition rules also apply to the economic activities of public entities, not to exclude them from the scope of those rules. The Council, however, uses this case law in the opposite direction. In the Decision, classifying ANSP as an “economic operator” becomes a reason to disregard ANSP’s public-authority status and, consequently, to exclude the application of Article 12 of the Competition Law. The result is a paradoxical situation that, in practice, creates a zone of impunity. As a public authority, ANSP is not held liable because it acted as an economic operator. But as an economic operator, ANSP does not have to meet the same qualification requirements as its competitors (including the requirement to submit a sanitary operating authorisation), precisely because it is a public authority.
It is also worth mentioning an older case to which the MOTOE judgment refers – RTT / GB-Inno-BM (Case C-18/88). The Belgian telecommunications authority drew up the technical specifications for terminal equipment, checked compliance with them and granted the necessary type-approvals. At the same time, it marketed such equipment itself, competing with the undertakings it controlled. The Court held that entrusting the power of type-approval to an undertaking that competes on the same market gives it the power to determine at will which equipment may be connected to the network, thereby placing it at an obvious advantage over its competitors (para. 25). Moreover, the Court held that maintaining effective competition and ensuring transparency require that the drawing up of technical specifications, the monitoring of their application and type-approval be carried out by a body independent of the undertakings offering competing goods or services (para. 26).
In other words, the separation of regulator and operator, which the Council formulates in its Decision as a mere recommendation to the Ministry of Health (point 12 of the operative part), may constitute, under EU law, a requirement directly stemming from the competition rules and not just a public policy option.
The Council largely confines its analysis to the question of whether the other operators were able to take part in the tenders, without sufficiently examining the conditions under which they competed with ANSP. Yet the equality of opportunity discussed by the Court in MOTOE means not only that everyone can participate in a competition, but also that no one should enjoy an advantage by acting as both a competitor and a referee.
These examples show once again how important it is, when referring to EU case law, to analyse the context of the judgments relied on and the legal issues examined by the Court, rather than merely quoting isolated paragraphs taken out of context. Otherwise, we risk using EU case law to justify exactly the opposite of what the Court has established.
State aid issues: why ANSP may face more serious financial consequences
At the beginning of this article, I said that, by declining to find an infringement of Article 12 of the Competition Law, the Council has created potentially much greater risks for ANSP. Here is why.
Earlier, I explained why the public financing of ANSP’s laboratories may create advantages over private competitors. But this situation may also have another, potentially much more serious implication: a finding that the public financing constitutes State aid.
One of the central arguments of the Decision is that ANSP acted “as an economic operator” in a competitive market (paras. (96), (110), (116), (132) of the Decision). The Council based this classification, among other things, on EU case law on the notion of undertaking. That classification is correct.
However, the same functional notion of an undertaking lies at the heart of State aid law. And the Competition Council is also the national authority responsible for applying Law No. 139/2012 on State aid.
ANSP claims that its paid services are financed “exclusively from the revenue generated by these activities” (para. (62)). However, in para. (60), the Decision mentions accounting records only “on the revenue side”, without explaining how costs are allocated, including those common to public and commercial activities. In the absence of such information, ANSP’s claim cannot be verified. Who paid for the consumables for the contracted tests? From which budget are laboratory staff paid for the hours they work on commercial contracts? Under these conditions, it remains unclear whether the public funding of ANSP’s activities is also being used to cross-subsidise the services provided on a competitive market.
The Council itself acknowledges, in para. (145), that “mere administrative separation does not eliminate” the risk of distortion of competition.
This is where the problem arises: State aid rules require that, where certain functions or activities are entrusted exclusively to a given entity (such as ANSP in our case), and that entity also carries out activities in a market open to competition, cross-subsidisation must be excluded in order to avoid distortion of competition.
“This requires that separate accounts are used, costs and revenues are allocated in an appropriate way and public funding provided for the service subject to the legal monopoly cannot benefit other activities” (para. 188(d) of the Commission Notice on the notion of State aid).
“Where the same entity carries out activities of both economic and non-economic nature [such as ANSP], the public funding of the non-economic activities will not fall under [the State aid rules] if the two kinds of activities and their costs, funding and revenues can be clearly separated so that cross-subsidisation of the economic activity is effectively avoided” (para. 19 of the Commission Communication — Framework for State Aid for Research and Development and Innovation).
In the absence of separate cost accounting, compliance with this standard cannot be verified. The portion of public funding that benefits the economic activity could constitute State aid. If it was not notified and authorised, it could be classified as unlawful State aid under Law No 139/2012 https://www.legis.md/cautare/getResults?doc_id=152604&lang=ro.
And if the Council finds State aid unlawful and incompatible, the consequences are entirely different from those under Article 12 of the Competition Law. Whereas under the Competition Law the Council can issue only prospective orders, even when it finds an infringement, in the case of unlawful and incompatible State aid the Council may order the recovery of amounts granted over the past 10 years, with interest! (Article 13(3) and Article 15(1) of Law No 139/2012). Without separate cost accounting, ANSP would find it difficult to demonstrate what portion of the public funding was used for activities carried out on the market. In that case, the amounts at risk of recovery could be considerable.
The paradox is that all the arguments that “saved” ANSP and the Ministry in the Article 12 case are precisely those that put them in a difficult position under State aid rules. ANSP acted as an economic operator. ANSP operated on a competitive market. ANSP won tenders on the basis of the lowest bid. ANSP does not keep separate accounts of its costs.
Each of these findings, made by the Competition Council to close one investigation, effectively opens the door to another. Whether that investigation will actually be opened remains to be seen…