New Study: Public Sector Breaches EU Directives when Procuring Software

This is mind-boggling stuff. Public sector officials across Europe regularly breach EU Directives by mentioning brand names like “Microsoft” that are in fact trademarks in procurement documents, according to a study (press release, full study) by the not-for-profit organization Openforum Europe. Shame on them!

Strasbourg 22 October 2008 - OFE has monitored public procurement notices for computer software published on Tenders Electronic Daily. 136 contact notices were scanned for trademarks in the period from February 1 to April 25, 2008. OFE's monitoring exercise shows that in 34 tender notices out of 136 (25 percent), company brand names were mentioned in procurement documents effectively preventing competition from alternative products. In 17 cases (12.5 percent), tender notices mentioned Microsoft or one of Microsoft’s products.

How can this happen? Are they swayed by the software logos they look into every morning when they switch on their PCs? Do they prefer particular software brands? Are they completely unaware that this is an unfair practice?

Graham Taylor, Chief Executive of OFE commented in the press release:

Frankly we were shocked at the likely extent of the problem. Public authorities not only stand accused of wasting potentially billions by inefficient purchasing, but also locking their users and citizens into today's solutions, and being unable to take advantage of new innovation in the future

I would like readers to comment on this study. What should be done about this malpractice? Surely, European consumers, governments and industry deserve better. The best software solution should win, not the one with the best brand recognition! Am I right?

Comments:

Re: This 'malpractice'. I find it somewhat disingenuous that you mention Microsoft in your text. There are plenty of examples of public sector bodies procuring support, implementation and upgrades of Oracle software across Europe. Are you actually suggesting that procuring such services is malpractice and public sector bodies looking to upgrade, say, their existing investment in Oracle E-Business suite should refuse to mention their existing investment and instead purely refer to contracts for the support and maintenance of their ERP system. That contracts for desktop support should ask for tenders for the support of the existing desktop infrastructure but refuse to mention what it is.

Posted by Niall Litchfield on October 22, 2008 at 02:03 PM BST #

Dear Niall, Thank you for commenting my blog post. Always nice to know there is somebody out there reading my ramblings. Now, I am merely mentioning the results of the study, not inventing anything myself. It so happened that Microsoft and its related products (Windows etc.) is the company name that most public procurers include in their tenders. If you read the study yourself, you will find that other trademarks also appear. To your second question: yes, I am saying that no public contract should include a trademark without explicitly stating "or equivalent". Actually, I tend to think the trademark should be omitted entirely and the reference should be made to the technology or ideally the open standard in question. Now, this is just according to EU procurement law, which happens to align with my gut feeling. Do you disagree with me or with EU procurement law? Or do you just find this study's result pedantic? I will try to publish a new blog entry if OFE publishes a follow-up. I assume there will be some kind of reaction from the EU or the public agencies involved. After all, it is not the companies behind the trademarks who are to blame, but the public authorities who let this practice pass. I believe I quoted the study correctly on that point, leaving no confusion. Anyway, thanks for taking the time to comment and have a good day.

Posted by Trond Arne Undheim on October 22, 2008 at 03:26 PM BST #

Directive 2004/18/EC is stating: technical specifications that mention goods of specific make or source or of a particular process or trademarks, patents, types or of a specific origin with the effect of favouring or eliminating certain undertakings or products are prohibited. So it's not that they procure Microsoft products, it's about mentioning them. Futhermore, study shows their findings to only be the tip of the iceberg due to several limitation such as language issues, the Eu threshold ( in 2004 this monitoring would have excluded 83.5% of public procurement contracts) or limiting the scope to trademarks.

Posted by computer software on October 23, 2008 at 05:15 AM BST #

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Trond Undheim, Ph.D, Director of Standards Strategy and Policy at the Oracle Corporation, speaker, entrepreneur, blogger, and author, is one of the world’s leading experts on technology and society. LinkedIn profile

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