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Two SMEs violated Community law – the GVH imposed a fine because of price fixing

The Gazdasági Versenyhivatal (GVH – the Hungarian Competition Authority) established that Óceán-L Kereskedelmi és Szolgáltató Kft. (Óceán-L Kft.) and Hüperion Kereskedelmi és Szolgáltató Kft. (Hüperion Kft.) had entered into an anticompetitive agreement for the period between July 2014 and April 2015, concerning the fixing of minimum internet resale prices of Laddomat boiler filling units. The GVH imposed a fine of some 1.2 million HUF on the two undertakings for the infringement.

The investigation of the GVH uncovered that Óceán-L Kft., as the importer of the products, had prompted its trading partners via email to utilise its recommended minimum internet resale prices. Hüperion Kft. complied with the incitement and adjusted its prices to the recommended minimum.

When setting the base amount of the fine, the GVH took into account the revenues of the two undertakings which stemmed from the sales between July 2014 and April 2015 of the three types (21-60, 11-30 and 21-100) of Laddomat boiler fillers involved in the proceeding.

When calculating the fine, the GVH evaluated – among others – the following aggravating factors:

  • price fixing qualifies as a hard-core restriction within vertical agreements;

  • the two undertakings did in fact implement the agreement.

The GVH took into account, as a mitigating circumstance, that both operators have small market shares in the concerned market, and that the gains of the infringement could not be quantified.

A successful settlement negotiation with Hüperion Kft. was conducted during the proceeding; consequently, the GVH reduced the fine imposed on it by 25%. The GVH may, within the so-called settlement procedure, reward an undertaking that admits to an infringement and that waives certain procedural rights, by granting a 30% reduction of the fine imposed – instead of the former 10%.

The GVH terminated the proceeding

  • as regards the investigation pursuant to the Hungarian Competition Act, since the exact market shares could not be determined and it was therefore not possible to establish, nor exclude, that the agreement was of minor importance;

  • against Atmos Energia Kft., H+H Com. Kft., K4K-KER Kereskedelmi és Szolgáltató Kft., Szol-Therm Épületgépészeti Kft. and Naturtherm Kereskedelmi és Szolgáltató Kft.-vel pursuant to Community law, given the fact that they did not respond to or openly refuse to comply with Óceán-L Kft.’s call, and that it also could not be proven that Óceán-L Kft.’s call to utilise minimum internet resale prices played a role in the setting of their own internet prices via other means.

Case number: Vj/104/2014.

Budapest, 21 March 2017.

Hungarian Competition Authority

Information for the press:
Andrea BASA
Spokesperson
Alkotmány u. 5., H-1054 Budapest,
Tel: (+36-1) 472-8902
Mobile: +36 30 6186618
Email:

http://www.gvh.hu

Further information:
GVH Customer Service
Tel: (+36-1) 472-8851
Email:
http://www.gvh.hu

 

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The GVH imposed a fine due to the partial implementation of a merger without authorisation

The Gazdasági Versenyhivatal (GVH – The Hungarian Competition Authority) authorised the acquisition by TRANZIT-KER Kereskedelmi Zrt. (Tranzit-Ker) and Tranzit-Food Baromfifeldolgozó és Élelmiszeripari Kft. (Tranzit-Food) of certain equipment and real estate in the possession of undertakings and private persons (Chicken Branch). The GVH imposed a fine of 1 800 000 HUF on the above-mentioned acquiring undertakings for partly implementing the transaction before obtaining the authorisation of the GVH.

Tranzit-Ker and Tranzit-Food, which belong to the Tranzit-group, are mainly active in the field of breeding (partly on their own sites, partly in the form of commissioned breeding), slaughtering, processing, packaging and sale of lean waterfowl of the poultry industry (lean goose and roast duck).

Due to the transaction, Chicken Branch became a part of the Tranzit-group, which deals with waterfowl.

Based on an assessment of the scope of activities and market positions of the parties involved, the GVH established that the merger did not bear anticompetitive effects and therefore authorised it. However, it was later established that Tanzit-Ker and Tranzit-Food had in fact already partly implemented the merger before the GVH’s authorisation had been granted.

Consequently, the GVH imposed a fine on the above-mentioned undertakings for their partial implementation of the merger before the authorisation of the GVH had been obtained, contrary to the prohibition of implementation contained in the Competition Act. The GVH established that certain equipment related to breeding chickens had already come into the possession of the Tranzit-group before the authorisation of the GVH had been granted.

Case number: Vj/13/2017.

Budapest, 14 March 2017.

Hungarian Competition Authority

Information for the press:
Andrea BASA
Spokesperson
Alkotmány u. 5., H-1054 Budapest,
Tel: +36 1 4728902
Mobile: +36 30 6186618
Email: ,
http://www.gvh.hu

Further information:
GVH Costumer Service
tel: (+36-1) 472-8851
e-mail:
http://www.gvh.hu

 


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The GVH did not authorise the acquisition of Central Digitális Média Kft.

The Media Council of Nemzeti Média- és Hírközlési Hatóság (NMHH – National Media and Infocommunications Authority) refused to give its special administrative approval; consequently, the Gazdasági Versenyhivatal (GVH – The Hungarian Competition Authority) prohibited the merger between Magyar RTL Televízió Zrt. and Central Digitális Média Kft.

On 15 October 2016 Magyar RTL Televízió Zrt. submitted an application form for the authorisation of a concentration, in order to be able to gain 30% of the shares and controlling rights in Central Digitális Média Kft., an undertaking operating in the market of online content provision and advertising.

Pursuant to the provisions of the media law (Act CLXXXV of 2010 on Media Services and Mass Communication), the GVH must ask for a special administrative resolution from the Media Council of the NMHH.

The Media Council of the NMHH refused to give its approval in its special administrative resolution of 24 January 2017 regarding RTL Klub, www.rtl.hu/rtlklub, www.rtl.hu/most, which are media products of the Bertelsmann-group; as well as startlap.hu, 24.hu, NLCafé, HaziPatika.com, Vezess.hu, Hírstart.hu, which are media products of CDM. As regards Citromail.hu mailing service and SegmentAd e-mail database, it established that it does not have special administrative competence.

Pursuant to the relevant provisions of the media law, the GVH is bound by the resolution of the Media Council refusing the special administrative approval; therefore the GVH prohibited the transaction.

The special administrative resolution may be appealed via legal remedy against the decision to terminate the proceeding, as the special administrative resolution may not be appealed separately on its own.

Case number: Vj/87/2016.

Budapest, 20 February 2017.

Hungarian Competition Authority

Further information for the press:

Andrea BASA

Spokesperson

Alkotmány u. 5., H-1054 Budapest

Tel: +36 1 4728902

Mobile: +36 30 6186618

Email: basa.andrea@gvh.hu, press@gvh.hu

http://www.gvh.hu

Further information:

GVH Inquiries

Tel: (+36-1) 472-8851

e-mail: inquiries@gvh.hu

http://www.gvh.hu

 

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Sectoral inquiry on the market of accepting bank cards

The Gazdasági Versenyhivatal (Hungarian Competition Authority – GVH) launches a sectoral inquiry on the market of accepting bank cards to explore and assess the market processes.

The GVH noticed that smaller traders faced less favourable service fees than larger traders on the market of cash-substitute payment instruments, i.e. the market of accepting bank cards when initiating and maintaining payment with them.

A trader faces various costs when it allows customers to make payments via the use of bank cards. For example, for each transaction that takes place commission comprising a certain percentage of the value of the transaction must be paid. In addition to this, the trader also has fixed costs. The trader is obliged to pay these commissions and fees to the financial institution which supplies the bank card acceptance service.

The GVH also commissioned a market research to investigate the costs of bank card payment. With the effects stemming from the changes made to the regulation of interbank commissions in mind the market research among others also covered the awareness of traders and the practice of accepting different payment methods. The results of the market research affirmed the need for a sectoral inquiry.

In the inquiry the GVH plans to overview the payment card industry, in particular the bank card acceptors as a downstream market. At the heart of the sectoral inquiry will be an investigation of the competition conditions of the acceptance of bank cards and an evaluation of innovative cash-substitute payment instruments that may potentially put competition pressure on the payment card accepting market; additionally, the inquiry will deal with not only the past and present state of the market but also with possible future changes to competition. The GVH believes that the sectoral inquiry must fully explore every factor that can hinder efficient competition on the acceptor market.

It must be emphasised that the circumstances mentioned above do not necessarily mean that competition problems have occurred on the market. Nevertheless, these circumstances and the potential injury of consumers can only be evaluated within a sectoral inquiry.

As a first step the GVH will consult the supervisory authority of the sector, will request information from issuing and accepting banks the bank card companies and other non-financial acceptors, before finally consulting the traders themselves.

The GVH plans to close the sectoral inquiry by July 2018. A report detailing the findings of the inquiry will then be published.

The adopted injunction on the launch of the sectoral inquiry can be read here in Hungarian.

Case numbers: AL/52/2017.

Budapest, 20 January 2017

 

Hungarian Competition Authority

 

Further information for the press:
Andrea BASA
Spokesperson
Alkotmány u. 5., H-1054 Budapest
Tel: +36 1 4728902
Mobile: +36 30 6186618
Email: ,
http://www.gvh.hu

 

Further information:

GVH Inquiries

Tel: (+36-1) 472-8851
e-mail:
http://www.gvh.hu

 

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The total amount of the fine imposed by the GVH for price fixing, market sharing and exchange of business information on the estate agent sector has been reduced as a result of successful settlement negotiations

According to the decision of the Gazdasági Versenyhivatal (Hungarian Competition Authority – GVH), Duna House Holding Nyrt. (DHH), Otthon Centrum Holding Kft. (OCH), Duna House Franchise Szolgáltató Kft. (DHF) and Otthon Centrum Franchising Tanácsadó Kft. (OCF) had concerted their pricing policies and exchanged confidential business information in the framework of their cross-selling cooperation. The GVH considered the determination of the minimum commission rates and the allocation of areas of operation for members of the franchise network by DHF and OCH to infringe the law. The total amount of the fine imposed for these infringements was 75.68m HUF (cca 245,000 EUR).

In the course of its investigation, the GVH found that the two networks had entered into agreements between April 2013 and June 2014 about

a.       sharing their stock of the real estates to be sold under exclusive commission –thereby significantly increasing the two networks’ incomes and strengthening their market positions;

b.      the commission fees (in fixed amount and in percentage) on the territory covered by the cooperation;

c.       determining the minimum amount and percentage of the commission payable on the seller side, and the amount of discount to be granted under cross-selling cooperations;

d.      the exchange of certain sensitive business information – e. g. data on some of the sales processes and the stock of commissions of DHF and OCF.

In its decision, the GVH stated that the contracts concluded between DHF and the members of its network of real estate agents, as well as between OCF and members of its network of real estate agents - either through the stipulation of prohibitions or the application of sanctions – had hindered the free determination of prices by the franchisees and prohibited the acceptance of commissions on the territory of other franchisees, between 2003 and 2015 in the case of DHF and between 2004 and 2015 in the case of OCF.

When calculating the amount of the fine, the GVH took into account as relevant turnover the prorated amount of fees (according to time) that was collected through the operation of such a franchise-system.

The GVH also considered the fact that the undertakings are currently significant market participants, although they had small market share at the beginning of the infringement.

In the case in question the GVH invited the undertakings to indicate whether they were interested in engaging in a settlement procedure, in order to enable the proceeding to be concluded in a swift and effective manner. The undertakings presented their settlement submissions, in which, among other things, they voluntarily admitted the infringement; therefore the GVH reduced the fine imposed by 30% – based on the new rules of the Hungarian Competition Act applicable after 16 December 2016.

According to the settlement procedure, the GVH reduces the fine to be imposed by 10-30% if the undertaking under investigation admits the infringement on the basis of the revealed evidence; moreover, it must also waive its rights to extensive access to files, to make a statement, to a hearing and to seek a legal remedy. This procedure facilitates the conclusion of the proceeding in a more rapid and less resource intensive manner. The settlement procedure may result in significant cost savings, not only for the competition authority but also for the undertaking. Additionally, the 30% fine reduction can be increased if the undertaking takes part in the leniency programme, which may even result in a 50% reduction of the fine. More information regarding the settlement procedure is available here and other means of cooperation with the GVH is available here (available only in Hungarian).

Case numbers: Vj/57/2014., Vj/74/2014., Vj/75/2014.

Budapest, 10 January 2017

 

Hungarian Competition Authority

 

Further information for the press:
Andrea BASA
Spokesperson
Alkotmány u. 5., H-1054 Budapest
Tel: +36 1 4728902
Mobile: +36 30 6186618
Email: ,
http://www.gvh.hu

 

Further information:

GVH Inquiries

Tel: (+36-1) 472-8851
e-mail:
http://www.gvh.hu

 

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