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Green light authorisation for the concentration of DIGI and Invitel approved by the GVH with an intervention concerning 41 municipalities and with a trustee assigned

The Hungarian Competition Authority (Gazdasági Versenyhivatal, hereinafter GVH) approved, with the imposition of conditions and obligations, the acquisition of Invitel by DIGI. This was the first time in a merger procedure that an on-the-spot inspection without preliminary notification had been carried out.

At the end of August 2017, DIGI, a telecommunication services provider, (DIGI Távközlési és Szolgáltató Kft., hereinafter DIGI) announced its intention to the GVH to acquire Invitel, a telecommunications company (Invitel Távközlési Zrt., hereinafter Invitel). The GVH initiated a competition supervision proceeding based on the merger notification of DIGI/Invitel in order to investigate if the transaction would cause adverse competition effects on a number of concerned markets. Both undertakings concerned are important and active players on the Hungarian market of wired telecommunications, i.e. they provide wired, telephone, internet and wired broadcasting (TV) and other services for hundreds of thousands of subscribers.

Within the framework of a detailed investigation, the GVH assessed the possible competition effects of the transaction. In addition to the usual steps taken in such a procedure (request for information from the parties concerned, from the market players and from the counterparts, analysis of this information), for the first time within the framework of a merger procedure it took advantage of the opportunity that has been provided for in the Competition Act since 15 January 2017 to conduct an on-the-spot inspection without preliminary notification.

There was an overlap between the telecommunication networks of the parties concerned regarding 34 municipalities, from among which in the case of 16 the investigation of the GVH established that the transaction would result in a significant reduction of competition. After becoming acquainted with the preliminary concerns of the GVH, DIGI undertook to sell the networks acquired from Invitel as a result of the acquisition in the case of these 16 municipalities (this also included their infrastructures and existing subscriber contracts at the time of the sale) within 6 months after the closure of the notified merger. Within the framework of the divestiture process, DIGI is obliged to maintain the economic functioning and competitiveness of the networks and at the same time to refrain from bringing over subscribers. In order to ensure that DIGI fulfils the obligations mentioned above, a trustee was assigned by the GVH (as happened in the DDC/Readymix transaction).

Furthermore, the GVH considered it a possible horizontal effect that Invitel is present with its wired telecommunication services provided via its own network in 25 municipalities, while i-TV Digitális Távközlési Zrt., which belongs to the same group of undertakings as DIGI, provides television services via a network leased from another market participant, i.e. as a result of the concentration the number of providers carrying out such services as independent undertakings would decrease. DIGI undertook to terminate its lease contracts relating to wired telecommunication networks (and to refrain from their extension) in the municipalities concerned, and related to this, the prohibition of re-contracting and active marketing for a period of 1 year.

In conclusion, under the supervision of a trustee, DIGI is obliged to sell the networks acquired from Invitel in 16 municipalities within 6 months, and it is obliged to exit from the contracts relating to wired telecommunication networks which are independent from DIGI. The GVH, in its decision terminating the proceeding, prescribed the above-mentioned ex post conditions and obligations, and determined that if these conditions are satisfied any possible significant restriction of competition resulting from the concentration could be eliminated.

Case number: Vj/43/2017

Budapest, 10 May 2018

Hungarian Competition Authority

 

Information for the press:
sajto@gvh.hu
http://www.gvh.hu

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

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Netpincér undertook to modify its contracts signed with restaurants

The Hungarian Competition Authority (Gazdasági Versenyhivatal, hereinafter GVH) accepted the commitments of Viala Kft., which operates Netpincér, an online food delivery platform. According to the assessment of the GVH, the accepted commitments are suitable for resolving the established competition concerns, since they enable restaurants, under certain conditions, to offer lower prices on their own online platforms compared to the prices available on Netpincér.  Consequently, the restaurants are discouraged from continuing to offer more favourable conditions on other intermediary platforms. As a result of the commitments, the GVH expects stronger competition on the market of food delivery services, especially as regards to competition between the intermediators. As a result of the GVH accepting the proposed commitments, no competition infringement was established in the case, and therefore no fines were imposed either.

The GVH launched an investigation against the operator of the biggest food delivery platform, as it had presumably been applying competition restrictive clauses in its contracts concluded with restaurants. The undertaking had prescribed that the restaurants were obliged to offer their services under the same conditions (e.g. prices, reductions, delivery conditions) on Netpincér as applied on their own distribution channels (websites, pre-booking/pre-ordering via phone, leaflets). Although the contractual term did not expand to orders delivered through other food delivery platforms (i.e. the competitors of Netpincér), the GVH identified that unique conditions, especially unique prices, were applied on all the distribution channels. Namely, the restaurants were not interested in offering their services at lower prices through other online food delivery platforms compared to the prices offered on their own distribution channels, as they were afraid that this would result in consumers preferring to make food orders through food delivery platforms instead of through their own distribution channels. Orders made through food delivery platforms, as opposed to orders placed directly through the restaurants’ sales channels, place a greater financial burden on the restaurants, as the restaurants are required to pay commissions for the food delivery platforms.

In the course of the procedure, in order to remedy competition concerns, Netpincér undertook to modify its contracts signed with the restaurants.  Consequently, Netpincér no longer places an obligation on the restaurants to apply unique conditions to non-online channels of placing orders (e.g. pre-ordering via phone) or to unique promotions.

Case number: Vj/89/2015

Budapest, 27 April 2018

Hungarian Competition Authority

Information for the press:

Email: ; press@gvh.hu
http://www.gvh.hu

Further information:

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

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Apple was fined for withholding significant information

The Gazdasági Versenyhivatal (GVH – the Hungarian Competition Authority) deemed it unlawful that Apple Inc. (Apple) did not inform customers about certain significant features of its Wi-Fi-Assistant service. As a result of the ‘WiFi-Assistant’ function, mobile phones automatically connected to mobile Internet networks when the Wi-Fi signal was weak, which resulted in an increase of mobile data traffic and the appearance of additional costs. The GVH imposed a fine of HUF 100 million for the infringement and it also prohibited Apple from the continuation of its unlawful behaviour.

The GVH investigated Apple’s consumer information that appeared from 2015 in connection with the ‘WiFi-Assistant’ when iOS 9 was installed or updated on phones, and the same information in relation to online platforms.

The undertaking introduced, as a default setting, the iOS operating system’s new ‘WiFi-Assistant’ function, which automatically became active when downloading the operating system or updating to it. The main feature of this function is that the device – in order to improve user experience – automatically switches to a mobile data network when the Wi-Fi signal is weak or not sufficiently strong; when previously it only switched to a mobile network – without the direct action of the user – when it did not find a Wi-Fi signal at all. The option for turning off the ‘WiFi-Assistant’ function has to be found by the users, i.e. it requires active action on their part.

The GVH established that Apple had pursued an unfair commercial practice, as it did not sufficiently bring the automatic activation of the ‘WiFi-Assistant’ feature to the attention of consumers when they were installing the operating system or updating to the operating system, despite the fact that taking into account the properties of the platform this would not have been cumbersome. This might have resulted in unexpected excess mobile traffic and consumers unexpectedly exceeding their monthly data quotas prematurely, thereby causing their services to be slowed down or requiring the purchase of additional data in order to allow them to retain their former usage habits.

According to the GVH, the ‘WiFi-Assistant’ constitutes a function of the operation systems of Apple devices (and of Apple devices). Consumers do not have prior knowledge and experience of this 'by default' function, and this might have an unfavourable effect on user-experience (relating to the general positive impression and advantages expected from the trademark). There might have been an expectation that Apple would inform its consumers about the function and its characteristics directly when the operation system was put into practice and updated.

The GVH calculated the fine taking into consideration all of the aspects of the case, in particular the gravity and duration of the infringement, the gains obtained as a result of the infringement, and the market position of the infringer; furthermore, the imputability, the cooperative behaviour of the infringer, recidivism, and the frequency of the violation were also taken into account.

The GVH concluded that Apple must provide information to its consumers, in a manner that is unequivocally clear, that due to certain features of the ‘WiFi-Assistant’ they might be exposed to unforeseen data traffic and even to extra costs. Apple has to inform its consumers about all this information when Apple devices are put into operation, when iOS updates are being made, or when issuing any kind of online information connected to the ‘WiFi-Assistant’ service.

Case number: Vj/32/2016.

Budapest, 18 April 2018.

Hungarian Competition Authority

 

Information for the press
Andrea BASA, Spokesperson
H-1054 Budapest, Alkotmány u. 5.
Tel.: (+36-1) 472-8902
Fax: (+36-1) 472-8898
Mobile: +3630 618-6618
Email: basa.andrea@gvh.hu
sajto@gvh.hu
http://www.gvh.hu

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



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The case of OTP is closed by the acceptance of commitments - consumers will be reimbursed almost 20 million HUF by the financial institution

The Gazdasági Versenyhivatal (GVH, Hungarian Competition Authority) accepted the commitments of OTP Bank Nyrt., which include an obligation to pay compensation to its consumers and the elaboration of a communication campaign for educational purposes. The GVH did not establish an infringement in the case and therefore did not impose a fine.

The GVH investigated whether the undertaking – from 1 January 2012 to 18 December 2013 – provided appropriate information about the possibilities of interest-free reimbursement related to the use of its credit cards, paying particular attention to interest calculation applicable until 20 June 2016, on the basis of which in the case of reimbursements made after the grace period interest must be paid even after purchases made in the next accounting period.

Although the undertaking did not agree with the position of the GVH, it submitted a complex commitment consisting of several elements. After a detailed examination of the content of the commitment statement, the GVH considered that the protection of the public interest could be effectively ensured by the acceptance of the commitments.

The GVH imposed the following obligations on the undertaking on the basis of the submitted commitments:

  • the undertaking shall reimburse approximately 11 thousand concerned consumers a total amount of more than 19 million HUF – charged due to the practice of the interest calculation –  furthermore, the repayment shall not place any expense or any other obligation or engagement on consumers, and the undertaking must inform consumers of the reason and circumstances of the reimbursement;

  • the undertaking shall launch a campaign for educational purposes lasting a minimum of four weeks and primarily consisting of television and online appearances (mini programme on television, online advertising, YouTube videos and website), aimed at improving the financial culture, consumer awareness and responsible decision making, as well as drawing the attention of different consumer groups to the main information regarding credit cards (e.g. accounting period, grace period, as well as the repayment opportunities);

  • in the above-mentioned information channels the undertaking shall promote an educational website that is available for a minimum of two years aimed at different consumer target groups (students, young people, elder persons) on the topic of credit card use, and enabling access to bank neutral information.

The GVH considered, as a circumstance in favour of the acceptance of the OTP’s commitments, the following:

  • the undertaking had already submitted its statement of commitment in the course of the investigation phase of the competition supervision proceeding, thereby enabling a significant amount of time and resources to be saved;

  • the commitments of OTP were also comprised of compensational and educational elements;

  • the GVH had not established any relevant infringement of OTP regarding the 5 years preceding the decision of the GVH that might be relevant for the competition supervision proceeding;

  • the commitments meet the requirements of monitoring.

When deciding on a commitment statement the primary purpose of the GVH is to ensure the effective protection of the public interest. Through the acceptance of commitments it is possible to more effectively ensure that the undertaking in question brings its practice into line with the applicable legal provisions; and at the same time the decision provides guidance to other market participants. When making its decision, the GVH assesses the circumstances for and against accepting the commitments, taking into account the specificities of the relevant market.

Case number: Vj/16/2017.

Budapest, 5 March 2018

Gazdasági Versenyhivatal

Information for the press
Andrea BASA, Spokesperson
H-1054 Budapest, Alkotmány u. 5.
Tel.: (+36-1) 472-8902
Fax: (+36-1) 472-8898
Mobile: +3630 618-6618
Email: basa.andrea@gvh.hu
sajto@gvh.hu
http://www.gvh.hu

Further information:
GVH Customer Service

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



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The Hungarian Competition Authority screened GTCs of online dating services

The Hungarian Competition Authority (GVH) screened the General Terms and Conditions (GTC) of seven popular online dating services in the framework of a global collaboration project between February 7-8, 2018  

In the framework of Sweep Day initiated and coordinated by ICPEN, the International Consumer Protection and Enforcement Network, an umbrella organization of 58 countries’ consumer protection authorities, the participant members investigated the target sectors according to harmonized criteria. The members browsed and searched the Internet in order to unveil misleading or deceptive practices of the web based services.

Through the widescope sweep entitled „Contract terms in digital economy” the GVH screened the General Terms and Conditions of online dating services available on PC, Android- and iOS tools, basically investigating whether the content of GTCs allow the consumer to make informed transactional decisions.

Highlighting the outstanding popularity and widescale use of online dating sites, the GVH warns that the practices of online dating services’ consumer information must meet criteria of fair information providing. It is essential that all basic conditions and circumstances, such as the exact content of services, the service fees, the cases that prompt a change in service fees, the methods of entering and terminating a service contract must be communicated in a clear, transparent and accurate manner to the consumer.

Accordingly, the online dating services shall provide that

  • the cancellation of services is not made technically more complicated than the simple, few-click subscription process;

  • GTCs must be available in Hungarian language;
  • the wording of informative and legal documents such as GTCs is not lengthy and unstructured, without any guiding highlights of essential conditions and interrupted with cross-references - to enhance clarity, comprehensibility and transparency of information;

  • no significant circumstances and conditions necessary for service use are hidden, unavailable or covertly published.

The users of online dating services can make more informed decisions and enjoy the services without unpleasant surprise if

  • they review the integrity and reliability of the selected service website (i.e. users should check if relevant data about the service provides appear on the website: is it an existing company or not; users should also check out user opinions, blogs, feedback about the online dating site – to make sure that the selected dating site lists existing profiles and users are satisfied with the services provided;

  • they devote time to read service conditions in the GTC that can be relevant for their own use, e.g. conditions on membership and related fees;

  • they contact the service provider’s customer service regarding questions on the GTC;

  • they changed their minds following registration and decided to cancel the services within the 14 days deadline;

  • they pay attention whether the contract is temporary or for indefinite duration, and whether a temporary contract is automatically renewed;

  • they check possibilities for contract cancellation prior to registration – it is practical to set up a phone or notepad reminder about the date of cancellation of renewal, to prevent unwanted service renewals;

  • they generate a separate email address for the use of dating sites;
  • hey store correspondence that is related to the cancellation of contract with the Service Provider, or save correspondence by means of print screens

The ICPEN Sweep provides greater insight for the GVH into practices typical in the online dating sector – if needed, such insight can ground the initiation of future competition surveillance procedures.

The ICPEN website provides detailed information on the Sweep Day – a comprehensive analysis of participating members’ reports will be published in the first half of 2018.

Budapest, 14 February 2018

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:
press@gvh.hu
http://www.gvh.hu

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

 

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