The Lithuanian Free Market Institute (hereinafter – LFMI) has examined draft amendments to the Law on the Management of State Information Resources aimed at complementing Section 2, Part 2 of the Law “information systems and registries comprising information resources of moderate and least importance shall be managed by private cloud service providers” with a clause “except for the cases when private service providers are not capable of providing sufficient cloud services” and submitted the following comments and proposals to relevant authorities.
In LFMI’s view, the proposed amendment has no basis, because the project does not specify what would be considered to be sufficient cloud services. The Lithuanian IT sector is advanced, competitive and has an impeccable reputation among EU service providers, so there is no basis for challenging its capabilities of providing necessary services for the public sector.
In addition, it should be noted that the amendment would reduce the legal certainty and create opportunities for misuse. The amendment would bring upon uncertainties in regulation. Due to political pressure and a lack of transparency in public tenders, the institutions might prioritize state-owned providers over the private ones. Also, the expansion of public services in the IT sector could be interpreted as a sign for the private sector to cease or reduce investments into cloud services provided to the state.
Inefficiency is another concern. Large investments into the construction of data centers and the production of cloud services would result in high cost and inefficiency. Consequently, there will be a need to reduce service prices by increasing the demand, i. e. by increasing the scope of users. This could be achieved in two ways: either by providing management services of the state information resources of moderate and least importance or, even worse, by offering state-run IT services on the market. The state will compete with private providers, leading to a potential infringement of the principle of fair competition.
In the light of the aforementioned arguments, LFMI calls for the rejection of the amendment.
The full position paper (in Lithuanian) is available here.