Sanctioning Labromed Laborator LLC for abuse of a dominant position through excessive pricing

The Competition Council of the Republic of Moldova has imposed a fine of MDL 683 thousand on Labromed Laborator LLC for abusing its dominant position by charging excessive prices for breath alcohol analysers, compatible mouthpieces and related calibration services on markets where customers had no viable alternatives.

The investigation was launched following a complaint submitted by RED Nord JSC concerning a suspected abuse of a dominant position on the market for the supply of breath alcohol analysers. During the investigation, the Competition Council extended its assessment to the markets for compatible mouthpieces and related calibration services after identifying indications of excessive pricing practices in these markets as well.

The Competition Council found that, between 2017 and 2024, Labromed Laborator LLC held a dominant position on the market for the supply of breath alcohol analysers listed in the State Register of Measuring Instruments, as well as on the markets for compatible mouthpieces and related calibration services.

The company’s dominant position was supported by very high market shares, reaching up to 100%, as well as significant legal and technical barriers to entry that limited customers’ ability to switch to alternative suppliers.

Why were there no viable alternatives?

Under Moldovan legislation, undertakings operating in the transport, public health and public order sectors are required to use only breath alcohol analysers included in the State Register of Measuring Instruments. During the period under investigation, Dräger (Germany) was the only manufacturer registered in the State Register, while Labromed Laborator LLC was its exclusive distributor in the Republic of Moldova.

At the same time, the market is highly specialised, demand is limited, and market entry requires compliance with specific technical and regulatory procedures, which discouraged other undertakings from entering the market.

The Competition Council’s economic assessment, based on a price-cost test, comparisons with comparable markets and an evaluation of the economic value of the products and services concerned, revealed significant and unjustified discrepancies between costs and prices. The investigation identified mark-ups of up to 490% for breath alcohol analysers, 733% for compatible mouthpieces and gross profit margins of up to 1,039% for calibration services, without any objective justification.

The Competition Council concluded that the systematic charging of excessive prices for the products and services concerned constituted an abuse of a dominant position. This conduct resulted in public authorities and public institutions incurring unjustified procurement costs, directly affecting the efficient use of public funds.

Competition Council Decision

By Decision No. APD-05/19-17 of 5 June 2026, the Competition Council found an infringement of Article 11(1) and Article 11(2)(e) of the Competition Law No. 183/2012 and imposed a fine of MDL 683,083.78.

In addition to the fine, the undertaking was ordered to bring the infringement to an end and, for the next three years, submit annual reports on the prices charged and the corresponding costs.

When does the Competition Council intervene in excessive pricing cases?

The Competition Council does not set or approve prices. Its role is to safeguard effective competition, which normally ensures that prices remain at competitive levels. Excessive pricing becomes a competition law concern only where a dominant undertaking exploits the absence of competitive constraints by charging prices that could not be sustained under conditions of effective competition.

The Competition Council intervenes only where all three of the following conditions are met:

1. The undertaking holds a dominant position on the relevant market

An undertaking holds a dominant position where it enjoys substantial market power, allowing it to act, to a significant extent, independently of its competitors, customers and ultimately consumers. In practice, this may be reflected in very high market shares combined with the absence of viable alternatives for customers.

Holding a dominant position is not, in itself, prohibited. It becomes unlawful only where that position is abused. Where customers can switch to competitors or substitute products, competitive pressure disciplines market behaviour. Concerns arise where legal, technical or contractual barriers eliminate effective alternatives, as in this case, where legislation required the use of breath alcohol analysers listed in a single State Register containing only one registered manufacturer represented by a single distributor in the Republic of Moldova.

2. The undertaking abuses its dominant position

In excessive pricing cases, the Competition Council carries out an economic assessment based on price-cost tests and comparisons with comparable markets. Significant price differences may be objectively justified by research and development costs, investments, after-sales services, business risks or superior quality. Where no objective economic justification exists, such differences may constitute excessive pricing.

In this case, mark-ups ranging from 490% to 733% for products and gross profit margins of up to 1,039% for services could not be objectively justified.

3. The abuse has, or is capable of having, adverse effects on competition or consumers’ interests

The Competition Council intervenes where the conduct of a dominant undertaking adversely affects competition or the collective interests of consumers. In this case, excessive pricing primarily affected public authorities and public institutions that were legally required to procure the products and services concerned, resulting in inefficient use of public funds.